The devil is still in the details

I have lost count of how many clients have asked about the various announcements that have been made recently regarding income repalcement and help for small business.

As of this writing the only finalized programs that are up and running are as follows:

  • Regular EI Benefits-Personal
  • CERB (Canadian Emergency Relief Benefit)-Personal

Still in the works

  •  75% wage subsidy of 15% Month over Month revenue drop
  • BDC small business loan program

Just Now available via your Bank or Credit Unions

  •  40,000 Small Business Loan with the possibility of 10k forgiven (Details differ per bank or credit union)

The best option in my humble opinion, is for small businesses to work with their Bank on the 40k loan option. Banks unlike Governments know how to structure programs and processes, and the details are clearer than what Governments promise versus what they actually deliver.

Try to manage the best you can on your own, become self-reliant and plan for the worst. The best time to fix the roof is when the sun is shinning, not in the middle of a downpour. 

Till next time,







Has “Free Trade” really helped us?

In my humble opinion NO.

Here is what I used to base my answer on. When we lowered tariffs in North America it was meant to encourage a freer flow of goods between nations. Economists tell us that increasing trade creates wealth and was essential to grow economies on both sides of the border or for that sake internationally (TPP, CETA). Free or tariff reduced trade is only a recent trend so we must look at why we had tariffs in the first place.

Tariffs or “taxes” were meant to protect our local and mature markets that were the envy of the world. Our Markets (Canada/US) harbored a healthy working population with disposable income and a robust manufacturing sector. Unlike other parts of the world North America (Canada/US) had made investments for the betterment of it’s population that included:

  • Health and Safety
  • Organized Labor
  • Minimum wage
  • Social Security/Government pensions
  • Workplace or Self-Directed retirement plans
  • Workers Compensation
  • Employment standards Legislation
  • Environmental Protection

Anyway you cut it, these programs increased our cost of production, albeit while producing a higher standard of living. The Tariffs made cheaper goods that were made in countries or states that did not have any of these obligations competitive by increasing their landed cost. In most cases local was cheaper when you factored in tariffs. This drove investment in both countries by companies who wanted to serve these rich markets by making it cost effective to produce locally.

We were told that lowering tariffs would drive competition and innovation because we would be allowed access to their markets on an equal footing in exchange for access into our markets. That did not happen. Restricted or limited access is what we got.

Too often national or state interests fell outside of NAFTA like Health and Safety, minimum wage, and environmental standards. So what in essence happened is that for companies to survive the onslaught of cheaper goods they too had to go offshore to remain competitive. In fact the standard of living has not increased in Mexico, the U.S and Canada. All the wealth that has been created did not raise the standard of living in any developed country, instead it only boosted the multi-national corporations bottom lines. This came at the expense of blue-collar and lower level white collar workers.

I am a strong proponent of responsible capitalism and competition. It’s the best system period and one that drives growth and innovation. When Free Trade was introduced and as other European and Pacific agreements pop up we must ask ourselves one fundamental question:

Is the playing field really level on  both sides?

Rick Barbosa



Thank Goodness I’m Canadian…when it comes to taxes


With tax season winding down for 2015, it’s time for a little reflection. This year I had an increase in the number of new clients that required both Canadian and American returns prepared. If you reference my site, you’ll notice I don’t actively post prices for my U.S returns. This is because many times I need to explain that because of the various individual circumstances it may be impossible to quote how much work is needed. Many states require filing of annual state taxes as well as federal. Also there is a variety of avenues to take to obtain the taxable income. There is a choice of AMT (alternative minimum tax) or Tax based on where you fall in the IRS Tax Tables. There is also a choice between itemized deductions and taking the standard deduction. And finally, lets not even talk about how many different forms and ways there are to calculate depreciation that are available.

The bottom line is that the U.S system has more tax advantages on many deductible items that cannot be claimed in Canada. This has the impact of lowering the individual tax rate. The trick is spending time and money to research, apply and weigh your outcomes. On a pro rata basis fewer U.S citizens prepare their own taxes than do Canadians. This is because of the complexity involved.  This is also why Warren Buffet and other High Income earners wind up paying lower taxes on a % basis than someone earning 40k.

Taking a balanced approach, I am biased towards our tax system. Our simple and straightforward Tax Code along with our tax credit system provides a more even approach to taxation and shares the public burden more broadly. This means a slightly higher personal income tax but lower aggravation when it comes to tax time. Our Corporate rates are now lower than many combined Federal/State rates in the US, and with the advent of a higher TFSA limit, we are closing the gap on personal rates.

Rick Barbosa