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Canada’s Proposed Tax Changes: Are you “up” on what’s coming?


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Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

Much has been said about the “Gig Economy” over the past couple of years. In today’s frenetic and “instant gratification” society, there are clear data suggesting that short-term contract work is growing in popularity for both workers and businesses who purchase their services. However, recently Canada’s Federal Government has been actively moving towards reforms in the tax laws meant to close “loop-holes” in the system to ensure everyone “pays their fair share”. The problem is that governments have a terrible track record — when it comes to making policy changes, there are often negative, unintended consequences.

The changes proposed will have an impact on independent contractors. There are three areas that the government wants to address:

  • Limiting the potential for income splitting between family members (also referred as “income sprinkling”)
  • Reducing the potential to earn “passive income” on monies that you decide to leave in your businesses vs. paying out to yourself in the form of salary or dividends
  • Stopping the conversion of income to capital gains

Are there people/small businesses that may take advantage in these areas? Most likely. However, the saying “tossing the baby out with the bath water” comes to mind. There are no shortages of commentary online about the potential impact of these changes. I’ve included links to many separate articles to legitimate news sites at the bottom of this blog in the event you would like to read more about this. But suffice it to say, there are likely to be significant consequences to you directly. Reasonable advice is offered in Armando Iannuzzi’s article on KRP’s blog entitled The good, the bad and the ugly of Ottawa’s proposed corporate tax changes where he answers the question: What should business owners do to prepare for these proposed tax changes? He suggests that there is no benefit to paying for legal or accounting work at this time as nothing is written in stone just yet. But you should keep “‚Ķthese developments on your radar” says Iannuzzi, and ensure you have open lines of communication with accountants you trust.

Eagle isn’t a legal firm or accounting company, so we don’t provide specific advice to our contractors. We are watching this situation as it develops and are actively participating in industry organizations such as ACSESS and, as part of these groups, we are lobbying the government on the contracting community’s behalf. We are a bit surprised at how little the IT contractor community is saying about the proposed changes. Certainly, we are hearing from the medical profession, farmers and small business in general.

Are you following this as it develops? Do you have thoughts you’d like to share with our readership? I encourage you to leave your comments below!

Links to news websites that discuss the proposed changes:

What Independent Contractors Need to Know About Canada’s Anti-SPAM Legislation (CASL)


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Dan Gasser By Dan Gasser,
Marketing Specialist at Eagle

What Independent Contractors Need to Know About Canada's Anti-SPAM Legislation (CASL)Canada’s Anti-SPAM Legislation (better known as CASL and often pronounced “castle”) officially came into force on July 1st, 2014 and is enforced by the CRTC, Competition Bureau and the Office of the Privacy Commissioner. Its primary objective is to protect Canadians from unwanted, harmful electronic messages and computer programs or software. What you may not know is, thanks to this legislation, you may be missing out on job opportunities!

What Exactly is CASL?

In its simplest form, CASL requires that anybody sending a Commercial Electronic Message (CEM) must first obtain consent from their recipients. All CEMs sent must then also include their complete contact information and a functioning opt-out mechanism, where opt-out requests must be honoured within 10 days. These CEMs extend beyond email, and include text messages as well as other electronic communication mediums, like a LinkedIn or Facebook message.

Why Now?

As already mentioned, CASL was introduced in July 2014, but it included a transition period that ended on July 1st 2017. During that transition period, companies could continue emailing contacts with whom they had a relationship before 2014 without requiring further consent. In addition, although the government agencies were enforcing the new law, many believe they were still ‘testing the waters’ and now that the grace period has ended, enforcements will become more rigorous.

These two factors (as well as a now-suspended Private Right of Action that would have allowed individuals to sue spamming companies) are why you may have received a high volume of emails from companies this past Spring, asking you to consent to receiving further emails from them. Most organizations have always taken CASL seriously, but with the grace period ending, they wanted to ensure they were doing their due diligence to guarantee compliance.

How Does CASL Affect Independent Contractors?

Although the basic concept of CASL is clear, there are some “grey areas” of the law that is open to interpretation. Perhaps the most subjective piece as it pertains to job searching is when it comes to receiving job opportunities. Depending how you read it, job opportunities sent by recruiters may be considered CEMs and this naturally makes many staffing agencies cautious.

You may have already learned that some recruitment agencies are lenient in their interpretation, whereas other recruiters will push you aside if they do not have your consent to email you. Sure, they’re allowed to call you (but do you really want your phone ringing off the hook from recruiters, especially when you are working on a client site?), but without your consent, you may not receive any jobs opportunities or related material by email or text message.

The simplest way to ensure you’re getting information about jobs when you’re on the market is to provide express consent to all of the agencies with whom you want to work. By applying to a job, posting your email address to a job board or social network, or contacting a recruiter directly, you are giving implied consent; however, this expires over time. If there is an option somewhere to receive electronic communications, or if a recruiter asks for your permission to continue sending you emails, remember to say yes. You can always opt-out when you’re no longer looking for work.

What If You Want to Opt-Out of Recruiter Emails?

Perhaps you’re no longer looking for work, or maybe there’s an agency who you’ve decided is no longer the right fit for you. All companies are required under CASL to provide an opt-out mechanism in all of their CEMs. Keep in mind, though, just as express consent does not expire until you opt-out, opting-out does not expire until you opt back in. If you opt-out today and are looking for jobs again in 5 years, be sure you update your preferences.

If 10 days after you opt-out you’re still receiving what you believe are CEMs, your next step should be to call your recruiter directly to ask to be removed, and escalate as necessary. You may have not realized that opting-out of one thing (for example a newsletter) did not automatically opt you out of their job opportunities as well. Also, if a company’s opt-out mechanism is malfunctioning for any reason, they will appreciate your tip, given the fines for a CASL infraction can get up to $10 million. If after enough attempts, you still feel you’re being harassed with electronic communications, then you can report it at the Government of Canada’s SPAM Reporting Centre.

A plethora of content and documentation has been created about CASL over the last three years by various organizations, and they all have some different interpretations. If you’re unsure about anything, or would like more information you can visit the official CASL information website at fighspam.gc.ca.

Are “Good Politics, Not Good Policy” Driving Ontario’s Labour Laws?


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David O'Brien By David O’Brien,
Vice President, East Region & Government Services at Eagle

Ontario’s “Changing Workplace Review” is Complete — Here’s How It Could Affect Independent Contractors and Temporary Workers

Ontario FlagThe long awaited Changing Workplaces Review, initiated by the Ontario Government over two years ago to review the employment Standards Act, has unveiled its recommendations and Ontario business are braced for the government to adopt changes that many are concerned are based on “good politics, not good policy “.

The expected changes to Ontario’s Labour laws have the potential to be sweeping, wide in scope with 173 recommendations that include everything from minimum sick days, increased annual paid vacation, and workplace unionization. Although there were a number of presentations that proposed potential restrictions around the use of independent contractors, the final recommendations around contract labour were wisely few. Additionally, although not part of the changing Workplace Review, it’s expected the government will piggy back an increase to Ontario’s minimum wage on the proposed legislative changes adopted from the Review either this June before break or this September.

Many employer organizations worked with the Ontario Chamber of Commerce to ensure that there was a focus on the potential economic impact on these policy changes proposed and, although we are not sure what the Government will adopt, there is still uncertainty as to the veracity and thoroughness of what the real effect on Ontario’s economy will be.

We can recall several presentations to the Special Advisers that were focused on the use and definition of temporary labour; however, there was a definite slant towards an interpretation that temporary workers were deemed precarious or at risk workers and were in need of additional legislative protections. Central to this argument were some highly visible cases of situations involving temp workers in general staffing environments being wrongly taken advantage of. Athough a very tiny portion of a large and thriving industry we do have appropriate legislative corrective measures that should be enforced to combat this potential.

To combine the general staffing world with professional or knowledge workers was a dot that the Special Advisers were wisely never able to connect. Many in the Knowledge Worker world make a well thought out career choice to contract and there are many advantages associated with contracting in a necessary and thriving industry. Some of the measures presented and promoted in the 2 year review included limiting contracts to a maximum of 6 months in length, a % limit on the use of contingent labour, and a reverse onus on employee status such that all contract workers were deemed employees unless otherwise proven. These were all solutions for a problem that did not exist. It is very much welcome news that the Special Advisers recognized this and did not move forward with these restrictions.

We do know that legislative attempts making it harder for employers to access workers and workforce options are not a route to increased prosperity or productivity. We have certainly seen in both the UK and undoubtedly Southern Europe (while most of Northern Europe does the opposite and is in much better economic shape) where restrictions in flexibility in labour markets hurts one very important stakeholder: workers.

In a dynamic and highly competitive global market the ability to change, adapt and be flexible are all key components of a growing and prosperous economy. As the world transitions in to a new way of working, efforts to reverse that through policies deemed to appease in an election atmosphere for a tired government will no doubt back fire by making it more difficult for employers to access workers. Organizations will adjust to restrictions by ultimately hiring fewer, automating more or offshoring or expanding in other more competitive markets. The government really needs to understand the economic impact that potential job killing measures may have.

While we don’t know which of the measures will be adopted and ultimately put forward as legislation and no doubt campaign narratives, we do know that without a thorough understanding of labour market competitiveness we, are doomed to repeat mistakes we can’t afford in Ontario. One need look no further than the Governments “fix ” in Energy of the 2000’s and the upside down and and befuddled energy market and extreme costs Ontarioans business and personal are stuck with today.