On March 29, 2011, the Tax Court of Canada released its decision in Bernard Demeterio v. Her Majesty The Queen 2011 TCC 192.  The case involved Bernard Demeterio, a life insurance agent, who received life insurance commissions in the 2002 and 2003 taxation years.  Mr. Demeterio submitted that the commissions he received should not be taxable in the year of receipt (i.e. 2002 and 2003).  He felt that the commissions were not income that had been earned but instead were loans advanced to him because they were required to be paid back if the life insurance policies that he sold were cancelled within two years. [This is a rather common remuneration feature amongst life insurance sales persons and life insurance companies and is often referred to as “chargebacks”]. Mr. Demeterio submitted that the commission income should be taxable once the life insurance premiums became non-refundable in the two immediate taxation years following the year of receipt.

As you know, Canadian GAAP is being replaced as the required accounting standard for financial reporting in Canada. Effective January 1, 2011 IFRS will now be the new accounting standard for public enterprises.  The Canadian Institute of Chartered Accountants (“CICA”) has created a useful guide for users of financial reports in order to assist in interpreting the consequences as a result of the IFRS convergence.

On July 16, 2010, the Department of Finance released a significant package of income tax technical amendments and explanatory notes.  As I am writing this blog, I have a binder of material in front of me that contains all of the material released by the Department of Finance and it is approximately 2 ½ inches thick.  Oh joy!  Great summer time reading!!

In all seriousness, though, this material is very welcome news given that it contains significant provisions some of which have been outstanding for approximately 8 years.  Let’s hope this package gets passed into law soon.

One of the significant amendments included in the income tax technical package are the restrictive covenant proposals.  Such provisions are horrifically complex.  Our firm wrote a paper on the restrictive covenant draft proposals in 2008.  For those interested in an exercise in complexity, feel free to read the paper.  Such provisions are wide sweeping and will change how most purchase and sale agreements are handled from a taxation perspective.  For further information, take a look at our blog of April 10, 2008.

In an episode of Corner Gas, the main character, Brent, (who is single, has no children and is 40 years old) finds himself overwhelmed by a hot-wheels-tossing 6 year old boy and besieged under a kitchen table while babysitting for a friend.  Brent enlists the help of his mother, Emma, who quickly gains control of the situation and explains her two-pronged philosophy for disciplining kids:

Wow, time flies when you're having fun ....!

May and June are conference months with our firm recently speaking at the STEP Pacific Rim Conference and the Canadian Association of Gift Planners Conference in Edmonton. Our firm will also soon be speaking at the Canadian Tax Foundation Prairie Provinces Conference and the STEP National Conference.  Certainly no shortage of activity.

First off, what an Olympics!  As a proud Canadian, yesterday will certainly go down in the memory banks as one of the most significant days in Canadian sports history.  Vancouver did an amazing job hosting the Olympics and did Canada proud.  Of course, many of us were interested in the Canadian men's hockey team result and watching the game was a "pins and needles" exercise but when Sidney Crosby scored the overtime goal what a rush of excitement!  Oh Canada!!