New 2014 Non-Eligible Dividend Tax Rate

2. New 2014 Non-Eligible Dividend Tax Rate • What are non-eligible dividends? • Payments made from a Canadian controlled private corporation from its profits (under $500,000) to a shareholder

3. Combined 2014 Federal & Provincial Tax Rate for Non-Eligible Dividends (including surtax)

4. 2014 – Combined Federal and Provincial Tax Brackets and Rates (Ontario)

5. Fintrac – New Canadian Anti-Money Laundering Regulations (AML) • New regulations as part of Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act • Aimed to combat the laundering of proceeds of crime and combat the financing of terrorist activities

6. Who are most affected? • Most applicable industries and sectors: • Money service businesses • Financial services organizations • Life insurance companies and life insurance brokers or agents • Securities dealers • Legal counsel and legal firms • Accountants and accounting firms • Real estate brokers or sales representatives • Dealers in precious metals and stones • Real estate developers • Casinos • Departments and agents of her majesty in right of Canada or of a province

7. What does it mean for you? • New regulations reinforced concept of ‘business relationship’ • You automatically establish a business relationship with a client when they open an account with your entity where you conduct financial transactions or provide services related to those transactions.

8. Continued… • Responsibilities • Required to document the nature and engagement of the business relationship from the onset • Perform prior due diligence on the client (ethical issues, criminal history, compliance issues) • Obtain knowledge on the client’s business (owners, branches, executives) • Perform ongoing yearly monitoring for any major changes

9. Monitoring & Reporting • If you detect suspicious activity, you are required to report this to FINTRAC • You can do this electronically at http://www.fintrac-canafe.gc.ca/reporting-declaration/1-eng.asp

10. New 2014 Personal Tax Credits • Changes to lifetime capital gains exemption • For 2014, the limit has been increased from $750,000 to $800,000. Future increases will be indexed to inflation.

11. Adoption Expense Tax Credit

12. Hiring Credit for Small Business • Business owners are eligible for this credit if they meet all of the following conditions. • deducted EI premiums from the compensation they paid to their employees, or they paid the worker's share of EI premiums for barbers, hairdressers, fishers, or drivers of taxis and other passenger-carrying vehicles and they paid these premiums (along with your share of EI premiums) to their payroll program (RP) account; • They reported the income and deductions on a T4 slip and filed this information on their RP account for 2012 and 2013 • The total of employer EI premiums they paid for 2012 was $15,000 or less • Their total employer EI premiums increased in 2013.

13. First-time Donor’s Super Credit

14. Ontario Retirement Pension Plan • Meant to supplement the CPP and provide additional retirement income

15. How will it work? • Workers would kick in 1.9 percent of their annual income up to $90,000 a year; a contribution employers would match. The threshold will increase each year, consistent with the CPP maximum earnings threshold.

16. Is it Mandatory? • The program would be mandatory except for the self-employed, those already enrolled in workplace pension plans, and those in federally regulated industries, such as banking.

17. Am I exempt? What does it mean if I’m not? • Government has stated employers with a "comparable workplace pension plan" will be exempt from participating in the ORPP. However, they have not defined what "comparable" means. Employers who aren't exempt will certainly have increased payroll costs. • Mandatory participation is set to start in 2017

18. Capital Cost Allowance (CCA) • 50% straight line depreciation rate will be extended for two years to include investment in eligible manufacturing or processing machinery and equipment in 2014 and 2015. • Faster write-off of eligible investments means businesses in the manufacturing and processing sector will be able to retool with new machinery and equipment to remain competitive in the current global environment.

19. 2014 CCA Rates

21. CCA for Green Energy • What is it? Income tax system encourages businesses to invest in clean energy generation and energy efficiency equipment by providing an increased rate. How do I qualify? For equipment to qualify, it must be situated in Canada. Green energy equipment includes a variety of stationary equipment that generates energy by using renewable energy sources. Examples of systems that qualify under Class 43.1 are • Systems that generate electricity and reusable heat under 6,000 BTU per kilowatt-hour • Electrical generating equipment including • Control, conditioning and battery storage equipment, transmission equipment, and fixed location photovoltaic equipment • Heat production and recovery equipment • Fossil fuel equipment • Energy systems that produce power from sunlight • Wind energy systems (i.e., wind-driven turbines, electrical generating equipment • Heat exchangers, compressors and boilers • Class 43.1 provides a 30% accelerated capital cost allowance rate