Law Times

September 18, 2017

The premier weekly newspaper for the legal profession in Ontario

Issue link:

Contents of this Issue


Page 1 of 15

Page 2 September 18, 2017 • Law timeS NEWS position to speak out in favour of redistribution and ensuring that those who make more pay their fair share. "That's why I decided to cancel my membership," says Rudnicki. "[I]f you're going to take a posi- tion that is entirely contrary to the spirit of public service that law- yers should have, then I'm done with you as an organization." Rudnicki says he has heard from other lawyers who support his position and that some pro- gressive organizations such as the Law Union of Ontario have been critical of the CBA for tak- ing the position. He adds that for criminal lawyers like him, legal aid sub- sidized by the government helps practices like his. The CBA says it took the po- sition because it is part of the Coalition for Small Business Tax Fairness. "We joined because the changes that were proposed have a negative impact on the ability of all independent businesses, professionals and other small businesses to survive during challenging economic times," says Ray Adlington, vice presi- dent of the CBA. He says he feels the changes will negatively impact the abil- ity of small businesses to fi- nance growth, innovation and job creation, as well as increase the compliance costs for those businesses. He adds that he doesn't feel the 75-day consultation period, largely over the summer, is ad- equate for such a large change to tax policy. Adlington says he hasn't heard any negative feedback to date on the CBA's involvement in the Small Business Coalition, but he admits he hasn't asked. This isn't the first time the CBA has found itself offside with its members. In 2014, it planned to act as an intervener in the Supreme Court of Canada case Chevron Corp. v. Yaiguage 2015 SCC 42, but it ended up dropping its plans after a swath of resignations. "Whenever there's any sort of issue that comes up, there's always going to be in any asso- ciation people that are for and against — that's just the way it goes," says Adlington. "I don't think this one is go- ing to be as divisive as the Chev- ron situation was." The CBA later told Law Times that it had received posi- tive response from members for joining the coalition and that 90 per cent of feedback from members have expressed their opposition to the government's proposed changes. They also stated that hun- dreds of members have sent letters to their MPs against the measures. Other lawyers who represent small business interests aren't buying the position of the Small Business Coalition — or the Canadian Federation of Inde- pendent Business — which has spearheaded the initiative. Grant Buchan-Terrell, a small business lawyer with gbtlaw in Oakville, Ont., says that the pro- fessional incorporation rules for lawyers make most of these pro- posed changes a moot point. "Lawyers, as a group — which is what I thought the CBA was supposed to represent — can't use most of the sprinkling and retained earning provisions that are subject to the proposed tax changes, so I find their position curious," says Buchan-Terrell. He says that, for the past 10 years, he has done the corporate aspect of tax plans, which are legitimate and legal, that create family trusts for the purposes of income sprinkling and con- vert dividends to capital gains, but he notes that he is not a tax- planning lawyer and tends to act on the instruction of a Certified Professional Accountant or tax- planning lawyers. "I've made maybe up to 20 per cent of my gross billings in a given year from the commercial law aspects of these very plans," says Buchan-Terrell. "It's not a moral issue, but as a citizen and a business law- yer who understands this, the rhetoric and misrepresentations that are going on against [the proposed changes] are just non- sense." Buchan-Terrell says many private corporations and fam- ily trusts that have set up with the help of a CPA or tax lawyer have never been used because the person simply doesn't make enough money to see any ben- efit from them. He says that while the nomi- nal level to see any tax ben- efit would be $150,000 per year, practically speaking, a person would need to make $500,000 per year to make it worthwhile. "If you can ever get a true quote from somebody in the legal or accounting profession, they will admit that of course [these rules are] a loophole, and it was never intended to use family trusts in this way," says Buchan-Terrell. He says that, while he doesn't plan on cancelling his CBA membership, he nevertheless questions the value of the orga- nization outside of those mem- bers who are looking to improve their resumé in advance of a ju- dicial appointment application. Eugene Meehan, partner with Supreme Advocacy LLP in Ottawa, who was national presi- dent of the CBA in 2000, says that every representative orga- nization carries a deep need to consult internally before taking public positions, and he wonders whether this was done with the proposed tax changes. "This association is mandated to be a non-political body repre- senting lawyers in Canada," Mee- han says. "Engaging in politics is by definition not its job." LT Continued from page 1 Consultation needed before moving ahead, say lawyers Visit our new website to find the latest in Ontario legal news, opinion, videos and expert commentary. Find the legal content you're looking for faster with enhanced navigation. A FRESH NEW LOOK Join our 55,000 monthly visitors and read respected content on any device. Untitled-1 1 2017-09-13 1:40 PM It's not a moral issue, but as a citizen and a business lawyer who understands this, the rhetoric and misrepresentations that are going on against [the proposed changes] are just nonsense. Grant Buchan-Terrell

Articles in this issue

Links on this page

Archives of this issue

view archives of Law Times - September 18, 2017