The Panama Papers: Canadian Bank Begins Closing Client Accounts Toronto Tax Lawyer discusses a CBC/Toronto Star investigation that looks into Canada’s tax system, specifically the use of Canadian corporations and limited partnerships as part of a complex offshore money laundering and tax evasion scheme. Known as The Panama Papers, this leak exposed 11.5 million documents detailing global tax avoidance and evasion and identified customers of Canadian banks that are connected to this scheme. Recently, the Royal Bank of Canada jumped into action, recently closing a number of accounts. They are the first Canadian bank to publicly confirm it has severed ties with customers who were named in the leak. They closed “about 40” customer accounts. Making matters worse, they also found out from the leak that they had registered at least 429 offshore companies with the Panamanian law firm Mossack Fonseca. Other financial institutions such as TD, BMO, and CIBC have not provided any information regarding their customers, while National Bank and Scotiabank have investigated and found no links to the Papers, and did not close any accounts. In total, 85 Canadians are being investigated by the CRA, with 60 being audited. To learn more about the Panama Papers leak and its connection to Canada, read The Canada Papers series here: Part 1: Snow Washing Part 2: 9203-9619 Quebec Inc. Part 3: Signatures for sale Part 4: Lessons for Canada Also read our previous blog here: Oh Canada, Our Home and “Snow-washed” Tax Haven?? RBC provided The Star with parts of a letter that was sent to one of their clients named in the Panama Papers database, which read: “Due to the operation of your accounts, we feel that we cannot achieve the requisite level of comfort with you. Therefore, after careful consideration, we must advise you that we are not in a position to continue our banking relationship.” Additional communication in the letter advised the client that he had 30 days to close his accounts and repay loans, one of which is a mortgage close to one million dollars. Letters were also sent to the children of the client, stating that their “risk profile has changed substantially” and the bank would not maintain their accounts. The children are under the age of 19. RBC’s spokesperson issued a response to this action, stating that their “decision that an account is outside of their risk parameters or does not meet our own standards does not mean the clients have engaged in inappropriate activity.” If you are in need of a tax lawyer in Toronto, please contact any of our tax lawyers. For any other legal services, please visit our website for more information or call (416) 449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, TaxMarch 10, 2017June 18, 2020
Help! Will My Foreign Divorce Be Recognized in Canada? DSF’s family lawyer was recently asked the following question: If someone gets divorced in Tennessee, is the divorce legal in Ontario if they haven’t registered their divorce in Canada? I am planning on getting married again in Ontario. In the 21st century, it is important that the law keeps pace with the realities of an increasingly globalized world, one of which is the increasing flow of people between countries. In the context of family law, the shifting of families, children and individuals across borders has created a host of challenges for family lawyers, judges and legislators alike. One of the areas that continue to be the subject of focus is the recognition of foreign marriages and divorce. While the traditions, ceremonies and requirements for marriage and divorce vary from country to country, when it comes to recognizing them in Canada, there is only one set of rules. Whether you are divorced in New York or New Delhi, the test is the same. If you want to get remarried in Ontario after obtaining a divorce in a foreign jurisdiction, you have to establish that the foreign divorce is recognizable in Canada. Under s.22(1) of the Divorce Act, a foreign divorce will be recognized where one of the spouses was ‘ordinarily resident’ in that country for at least a year immediately before obtaining the divorce. However, that is only the first step to being able to remarry in Ontario. Before the Ontario government will issue you a marriage license, you have to obtain an authorization from the Registrar-General. To do this, you have to provide the following documents to the Office of the Registrar-General, Marriage Office: A marriage license application completed by you and your new spouse; The original divorce order or notarized copy of the divorce order. If the divorce judgment was written in a language other than English or French, you will have to obtain a court-certified translation of the document; A completed Statement of Sole Responsibility, which is a document that attests that you and your new spouse understand that the granting of a new marriage license does not necessarily mean that the foreign divorce would be recognized by an Ontario Court. A legal opinion letter from a lawyer, addressed to you and your new spouse, giving an opinion that the foreign divorce would be recognized as valid in Ontario and giving the reasons for their opinion. Once you have submitted these documents, the Registrar General will provide an authorization allowing you to obtain a marriage license. Only then will you be free to remarry in Ontario. It is important that you speak to a lawyer before embarking on remarriage. There are a number of legal hurdles to get over, and you will need a lawyer to draft an opinion letter in any event. If you are planning to get remarried in Ontario and need some advice, assistance or an opinion letter, contact a member of our Family Law Team. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawMarch 9, 2017June 18, 2020
Is My Acceptance of a Separation Agreement over E-Mail Valid, Even Without My Signature? DSF’s Family Lawyer John Schuman was recently asked the following question: My soon to be ex-wife proposed an agreement between us concerning business, property, child access etc. She sent me a draft via email for negotiation purposes and I agreed for the most part and sent along with the changes I wanted. She then went to her lawyer and had an agreement drawn up, with the changes I wanted to be omitted of course. She now says my acceptance via email is binding, without my signature! Please tell me this is not true. Domestic contracts of any type (marriage contract, cohabitation agreements and separation agreements) are subject to the same rules about the process that must be adhered to, to have a valid contract and the subject matter that the contracts are legally allowed to cover. While the question as to what subject matter a contract can cover is best left to another day, your question raises important points about executing domestic contracts. Do I Need One at All? A domestic contract is, in my view, the most time-efficient, cost-effective and civil means of addressing the issues arising from a breakdown in a relationship. It is the preferred way to bring predictability, certainty and finality into a situation that, most likely, has been lacking those for some time. The only other means to resolve family law issues is by going to court, which can cost tens of thousands of dollars and take years to resolve. If there is even a remote chance that spouses, with the assistance of competent counsel, can resolve matters without going to court, it is always preferable to work towards a domestic contract. Can’t My Spouse and I Just Write Up an Agreement or Use One We Find on a Website Like Law Depot? Spouses are free to write a domestic contract in any form- they can even use a quill and parchment to do so. As long as it says “Separation Agreement” and is signed and witnessed by both parties, it is technically a valid contract. However, the difference between a valid contract and a contract that will be enforced by a court is stark and, in reality, it is the latter one that matters. I have noticed an increase in the number of people approaching me regarding contracts they plan to make or have made on lawdepot.ca or other contract generators. Every one of these contracts has had provisions or lack of provisions that I (and a number of lawyers consulted) would never consider using. For instance, the provision for waiver of spousal support in a law depot contract is six lines long. Every spousal support waiver clause I have seen drafted by competent counsel has been upwards of a page and a half. Lawdepot agreements do not contain any of the standard references to the governing statutes, which is quite important. These are basic facets of drafting an enforceable agreement – It is clear that a practicing Ontario family lawyer did not write the law depot template. If you need an agreement drafted, retain competent counsel to do so. Investing a bit at the outset in a solid agreement may save you tens of thousands down the road if the agreement is ever challenged. Think of it as an insurance policy against a future disaster – you will want to be well protected. So How Is A Valid, Enforceable Agreement Concluded? For a domestic contract to be valid and enforceable, it must first comply with the general law of contract. This means: Both parties must agree as to the subject matter of the contract; The contract must be in writing; The contract must be signed and witnessed; The contract must not contain any illegal bargains or promises The contract must be made without undue influence or duress. In addition to these terms, s.56(4) of the Family Law Act lays out additional grounds on which a judge can set aside a domestic contract, such as if one party did not make full financial disclosure or if a party did not understand the nature or consequences of the agreement. To ensure that there has been proper financial disclosure, you need to speak to a lawyer. Only a lawyer will be able to accurately tell you what assets need to be disclosed and what is the best way to ensure that the financial information you provide is sufficient. The sufficiency of financial disclosure is a common reason why agreements are set aside, years after they are concluded. Most judges feel that for a party to understand the nature and consequences of an agreement, a layperson needs to hire a lawyer. It is not simply enough that they understand the meaning of the words and have a simple appreciation of the consequences. The case law is clear that the person must understand all the legal repercussions of their agreement, in a variety of circumstances. Once represented parties agree to the terms of the agreement, and each has made full disclosure of their debts and liabilities, they are in a position to execute the contract. At this stage, each party will meet with their lawyer who will explain the nature and consequences of the contract through a process known as Independent Legal Advice. Once ILA has been given, a party will sign the agreement and the lawyer will attest that they have explained the nature and consequences of the agreement to the party. Once all interested parties have signed off, there is a valid and enforceable agreement. If you are moving in together, getting married, separated or just have a question about domestic contracts, please contact one of our Family Law Team. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawMarch 8, 2017July 5, 2023
Open Courts in the Digital Era: Contextualizing the Toronto Star’s Legal Challenge to Alleged Tribunal Secrecy Recently, the Toronto Star has embarked on a legal challenge against what it describes as “blanket secrecy” within Ontario’s administrative tribunal system. At the core of their claim is today’s topic: the open court principle. The Star seeks, inter alia, a declaration that this principle applies to quasi-judicial tribunals in the same way as it does to courts, particularly with regard to tribunal records (namely, “pleadings, exhibits, legal briefs and all other documents on which adjudication is based”; see the Statement of Claim). The case raises interesting questions about the place of open courts in an era where access to information – including the very personal and very private – is more or less instantaneous and all but indifferent to geography. Open courts have long been held up as a fundamental component of not only our justice system but of the very rule of law on which our society is built. Yet when the open court principle was first articulated, its authors could not have foreseen what “openness” would mean in 2017. To the principle’s great advocates, from Jeremy Bentham to Louis Brandeis, today’s world would seem truly alien. So, do the rationales for open courts still hold up? Should we rethink the open court principle? Thinking about these questions requires a closer look at the open court principle, and it’s underlying objectives. The Principle In simple terms, the open court principle holds that court proceedings, “including the evidence and documents tendered,” must be open to the public and that juries’ verdicts and judge’s decisions must be publicly delivered or publicly available (Lukács v. Canada (Canadian Transportation Agency), FCA 2015, at para 27). The principle enjoys a strong legal foundation in Canada. The common law has long regarded the principle as integral to the rule of law. Further, as Michel Bastarache (formerly) of the Supreme Court of Canada wrote, “the open court principle gains importance from its clear association with free expression protected by s. 2(b) of the Charter” (Named Person v. Vancouver Sun, SCC 2007 at para 33). In Ontario, the Courts of Justice Act states that “all court hearings shall be open to the public”, subject to court rules, and unless “the possibility of serious harm or injustice to any person justifies a departure from [that] general principle”. Open courts also get a good press in philosophy circles. Jeremy Bentham famously wrote that, ‘In the darkness of secrecy, sinister interest and evil in every shape have full swing. Only in proportion as publicity has place can any of the checks applicable to judicial injustice operate. Where there is no publicity there is no justice.’ ‘Publicity is the very soul of justice. It is the keenest spur to exertion and the surest of all guards against improbity. It keeps the judge himself while trying under trial.’ (as quoted by the Supreme Court, here) Some, like Patricia Kosseim of the Office of the Privacy Commissioner of Canada (OPC), would argue that Bentham’s emphasis on disciplining the judiciary serves a yet more fundamental societal value: public confidence in the justice system. To Chief Justice Beverley McLachlin, in turn, this value is “a cornerstone … one of the features of all societies sharing a cultural commitment to the rule of law” (see her Honour’s 2012 speech here). Absent this public confidence, she argues, people will neither settle their disputes in courts nor obey court orders. “Practical Obscurity” and the Digital Era This rationale begs the question: what if the openness of a court or tribunal proceeding can, in fact, undermine the public’s confidence in the administration of justice? Especially in the digital era, argues Kosseim, open courts present novel privacy concerns which may discourage the public from asserting their legal rights and remedies in the first place. Consider this example: An employee is considering bringing a harassment claim before the Ontario Human Rights Tribunal. She works in a specialized field with very few potential employers. Some of the details of the incident underlying her claim might prove embarrassing if publicized and easily accessed online and might even affect her ability to secure future employment. She reasons that if pursuing the claim might make public that information, it is not worth the risk. Those advocating a rethinking of the open court principle often raise this type of scenario alongside the concept of “practical obscurity” (see, e.g., here). This concept refers to the “built-in privacy protection” that exists when trying to access court or tribunal records involves considerable effort, regardless of the fact that the records are technically open to the public. Under such circumstances, nefarious uses of one’s information will be less likely. Some view this as a practical compromise between openness and respect for privacy. Today, web-based case law databases have thrown a wrench in the cogs. While these services serve many laudable aims, “practical obscurity” cannot operate the way it used to. Notably, both pay-for-use and free databases – e.g. Westlaw and CanLII, respectively – intentionally prevent direct searches through search engines like Google. But this is a small obstacle, and some less scrupulous entrepreneurs have found ways around. If practical obscurity ever struck a balance, it’s been skewed towards publicity. From this perspective, the Star’s goal of securing easier access to tribunal records might represent a further imbalance. On the other hand, we should be mindful that open courts are not an absolute demand for the justice system. There were always exceptions, something that would appear appropriate in the context of both courts and administrative tribunals. In fact, the legal test applicable to “all discretionary actions by a trial judge to limit freedom of expression by the press during judicial proceedings” expressly requires balancing the harm and benefit of such action (see the “Dagenais/Mentuck” test, here, as affirmed and broadened here). One might argue, then, that the open court principle should apply presumptively to tribunals as well, but subject to a similar test. This is essentially the Star’s position; that this test should be applied to any restriction on access to tribunal records. Whether this is the right approach, and how exactly it might be applied, are questions we’ll have to leave to the courts. The status quo, wherein inconsistent, ad hoc rules apply to access these records, certainly leaves room for improvement. Traditional courts and tribunals are different by design, but they occupy much the same space in Canadians’ lives, and much of the same tension, namely between openness and privacy, would appear applicable to both. How differently should they be treated? Generally speaking, the Star is on to something: there is nothing trivial about secrecy sewing itself into the fabric of our justice system, or even appearing to. If the recent jump in sales of George Orwell’s 1984 is any indication, the public remains very much alive to matters of transparency and public accountability. Whether the newspaper’s position is validated will be interesting to see. In any case, with so many basic values at stake – privacy, openness, the rule of law, freedom of expression, and many others – the courts would do well to tread carefully. An important question has been put to them, and their response will echo into the future. There is a lot to consider in just about any proceeding, and our lawyers know it. If you or someone you know is in need of legal representation, please do not hesitate to contact us at 416-449-1400 in Toronto, 705-812-2100 in Barrie, or 289-638-3171 in Whitby, or send us an email at info@devrylaw.ca. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Criminal LawMarch 7, 2017June 18, 2020
Can I Kick My Abusive Husband Out of the Family Home? One of our Family Lawyers was recently asked the following question: Is it legal to kick my abusive husband out of our house until our divorce is settled? The house is in my name and I am the only one paying the mortgage. Unfortunately, domestic violence and spousal abuse is an all-to-common occurrence and one that often factors into the breakdown of a marriage. While many would think that the answer to this question is a resounding “Yes!”, the answer is actually “No”. Or perhaps more accurately “Not really.” While many of the same laws apply to married and non-married spouses (such as obligations for spousal support, child support and the ability to enter into domestic contracts), the law regarding possession of the family (or ‘matrimonial’) home is very different for common-law and married spouses. While married spouses have an equal right to possess the home (even if only one spouse owns it), common-law spouses do not have any right to possession of the home. A common-law spouse who owns their home can kick their partner out at any time, for any reason (although it’s always recommended you speak with a lawyer before doing so!). Married spouses cannot. Until a divorce is granted or a court orders otherwise, both spouses have a right to live in the matrimonial home. While paying the mortgage may have an effect on the division of property, paying the mortgage or utilities does not affect the rights of spouses to occupy the home. If a spouse takes any steps to kick their spouse out of the home, they can find themselves in deep legal trouble. In some circumstances, a judge may order the offending spouse to leave the home. Judges are very skeptical of those who engage in self-help regarding their home. The case law is clear – you need to ask the court’s permission to kick your spouse out of the home (or the police if it’s an emergency). If a married spouse is abusive or makes you fear for your safety, you can ask the Court to kick your husband out – in legal parlance, you can ask the Court for ‘exclusive possession.’ Under the Family Law Act, judges are directed to consider a number of factors in determining exclusive possession, such as how it would affect any children, the ability of either spouse to find alternate accommodations and any violence committed against the spouse or any children. Orders for exclusive possession are not common, even in cases where violence is alleged. Litigants face an uphill battle when asking judges to order exclusive possession – judges are hesitant to kick people out of their home for a variety of reasons – they may not have elsewhere to go; if they have to rent, the added cost may put them at a disadvantage in pursuing other rights (such as hiring a lawyer to contest custody); and a general belief that people should only be removed from their home in the clearest of circumstances. If you think you need to pursue exclusive possession of your home, or are facing a claim for exclusive possession, it is important to talk to a family lawyer right away. These are not simple claims, and ones that should not be addressed without legal advice. The consequences of these claims can be huge – you can be removed from your house. It is important to get good advice and counsel from the outset. If you have any questions about exclusive possession, contact a Toronto Family Lawyer. By Fauzan SiddiquiBlog, Family LawMarch 1, 2017November 14, 2020
My Boyfriend Has Been Denied Access to His Son. Can He Fight for More Rights to Him? My boyfriend’s ex-girlfriend had his son in late November 2016. He is unable to see his son often and she won’t allow him to have him alone as she doesn’t think he can care for him. There is no paperwork in place yet but he’s worried she will ruin his life if he does not comply with everything she wants and says. Is there any advice for this situation on how he could get more rights to his son or how he should go about this? Answer by John P. Schuman, C.S. Unfortunately, young mothers refusing to allow their child’s father to be involved in their young child’s life is a very common situation. Young mothers often feel that they need to protect the child and only a mother can provide appropriate care for an infant or young child. That approach is not consistent with the current research in social science and child development. Even at a very young age, children benefit from having both parents actively involved in their lives. Most family court judges recognize this. One parent refusing to allow the other parent to have any contact with a young child is a situation where it is possible to get an emergency family court order. It is very important for children to have frequent, meaningful contact with both parents. That means both parents should be involved in feeding, bathing, and other parenting tasks (not just playing), at a minimum, several times a week. Due to young children’s short memories and perception of time, the frequency of contact is very important – more important than long periods of time. Although young age is not necessarily a reason why a child should not be spending overnights with both parents. What is often best for a young child is to allow that child to develop a secure attachment to both parents through having both parents actively and frequently involved in the child’s care. Denying a child contact with one parent, or exposing the child to a lot of conflicts, especially at a young age, can lead to long term problems. In order to keep tensions and conflict down between parents, because conflict between parents is very harmful to the child, and to provide the best hope for a joint custody situation, it is best for parents to try parenting mediation, with a parenting professional, before going to court. The parenting professional can help the parents understand the children’s needs and help them work out a parenting plan that best suits the child’s needs at each stage of development. If the other parent will never agree to mediation, it is still important to propose it because judges get angry at parents who refuse to try to work out things for the kids without a fight. Before a parent goes to court, it is important for that parent to understand that judges base decisions on what is in the child’s best interest. There are several factors that judges consider when deciding what is in a child’s best interest. Before going to court, it is important for a parent to have evidence that what they want is in the child’s best interest. It is also important for separated parents to understand the difference between different types of parenting arrangements and when each will work best for the child. That will help them come up with the best parenting plan for the child or, if they have to go to court, to know what types of orders the judge will be inclined to make. But, if a parent is not seeing a child at all, or is not having meaningful contact with a child, then that parent should see a family lawyer right away to know your options and how best to ensure the child has the best possible relationship with both parents. You can get a lot more information about Ontario Family Law issues, including a further explanation of child custody and parenting legal issues by downloading this $9.99 e-book for Kindle, Kobo, or iPad/iPhone/Mac or ordering the paperback version. But, to keep out of trouble, it is always best to speak with a good family law lawyer. John Schuman is a Certified Specialist in Family Law. He is the partner managing the Family Law Group at Devry Smith Frank LLP, a full service law firm located near Eglinton and the Don Valley Parkway in Toronto. Learn more about John! Call him at 416-446-5080 or 416-446-5847 or email john.schuman@devrylaw.ca Listen to the Ontario Family Law Podcast! Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For legal advice contact one of our family law lawyers. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawFebruary 28, 2017June 18, 2020
Is Ontario Really the Litigation Capital of Canada? It is a commonly held belief that Ontario is the litigation capital of Canada. With more lawyers than any other province, a greater population and far larger economy, this idea is intuitive and easy to believe. However, the question remains; are individuals and corporations located in Ontario more likely to litigate than those located elsewhere? With no immediate answer at hand aside from anecdotes and conjectures, I decided to investigate. In order to analyze how much litigation is taking place in Canada, I looked at the number of Court decisions there are from Canlii for each province from January 1st, 2014 to December 31, 2016. I chose those years to standardize the input as some jurisdictions do not have data from prior to 2014, while others have not entered decisions for 2017 yet. The data is imperfect as it includes some Court decisions for matters such as cost motions and other non-trial decisions, but for the most part, it provides an accurate picture of the amount of litigation taking place in Canada. This number includes both civil and criminal court cases. Province Court decisions GDP Population Ontario 19,249 763,276,000,000 13,983,000 British Columbia 8,954 249,981,000,000 4,751,600 Alberta 4,349 326,433,000,000 4,252,900 Saskatchewan 2,235 79,415,000,000 1,150,600 Nova Scotia 1,879 40,225,000,000 949,500 Newfoundland 1,106 30,100,000,000 530,100 Manitoba 1,080 65,862,000,000 1,318,100 New Brunswick 819 33,052,000,000 756,800 Yukon 388 2,710,000,000 37,500 Northwest Territories 270 4,828,000,000 44,500 Prince Edward Island 169 6,186,000,000 148,600 Nunavut 114 2,447,000,000 37,100 The numbers are hardly surprising here, the more populous and wealthy a Province is, the more court decisions there are. This is supported by the data indicating that 98.6% of the variation in court decisions per province can be explained by population differences alone. However, after adjusting for population size, the density of a province still provides some information on how litigious the province is. Adjusted for population size, 78% of the variation in court cases across Canada is explained by a province’s population density. The smaller provinces have slightly more court decisions per capita than larger Provinces do. Province Court decisions per 10,000 people Manitoba 8.19 Alberta 10.23 New Brunswick 10.82 Prince Edward Island 11.37 Ontario 13.77 British Columbia 18.84 Saskatchewan 19.42 Nova Scotia 19.79 Newfoundland 20.86 Nunavut 30.73 Northwest Territories 60.67 Yukon 103.47 I then looked to see what other factors might influence the amount of litigation taking place in a province. Aside from population size, both crime and economic activity seem to be good indicators of litigation. The more economic activity there is in a Province, the more money there is to litigate over. Similarly, the higher the crime rate in a province, the more criminal trials there should be. To try and discern how these variables interacted with each other, I ran a multivariate regression on the number of court decisions per province, using population size, economic data, and crime rates as the variables. Together, these factors explain 61% of the variation in the number of court decisions per province. Ontario and Nova Scotia have more court decisions than the model predicts, while Alberta, Manitoba and Saskatchewan have far less. This means that Ontario and Nova Scotia are slightly more litigations than their population size, economic activity and crime rates suggest, while Alberta, Manitoba and Saskatchewan have less legal activity. After investigating the data, it seems as if Ontario has slightly more litigation than the rest of Canada. However, the effect is minor, and the level of litigation remains similar throughout the country. If you are in need of any legal services or advice, please contact Devry Smith Frank LLP at 416-449-1400, or visit our website today. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, LitigationFebruary 13, 2017June 18, 2020
Ontario Government Moves to Dismiss Challenge to Hydro One Privatization Last Tuesday, Ontario’s Liberal government moved to strike a lawsuit challenging the further privatization of Hydro One. If successful, they’ll have removed a major obstacle to the controversial scheme they claim will fund major infrastructure investments. Energy prices in Ontario have been occupying headlines for years. Regardless of where you stand politically, it’s difficult to deny there’s a problem. The impact of hefty hydro bills has been felt by Ontarians across the board. Individuals and families have been forced to allocate more of their scarce income to keep the heat and lights on – so much so that some Ontario families have even been pushed into poverty (as reported here). Businesses, perhaps especially manufacturers, struggle to stay competitive against rivals with much slimmer electricity bills. Just throw the term “delivery charges” around at the dinner table, and watch the sparks fly. “But others pay even more,” you might say. That may be true, but the problem lies not only in the rates themselves but in the pace of their escalation (see, e.g., here). As the Consumer Policy Institute observes, Ontario’s rates are indeed the highest in Canada, but not in North America. Cities like San Francisco, Detroit and New York actually pay more per kilowatt/hour. Crucially, however, these markets have had time to adjust to these costs, meaning the burden is felt more sharply in Ontario, where prices have risen sharply in recent years. Any way you slice it, the average Ontario resident is probably none too pleased with their hydro bill. To the extent that Ontarians blame their government for it, our elected representatives may also stand to lose. They’ve certainly not ignored the issue. The Ontario Liberal government under Kathleen Wynne has been active on this issue since the latter was sworn in in February 2013. What began as a pledge not to privatize Hydro One, morphed into a ‘partial privatization’ whereby 60% of Ontario’s flagship energy company was to be sold into private hands. Half that amount has already been sold, with the remaining 30% slated for the same fate. The goal, says the government, is to raise approximately $9 billion to fund much-needed investment in infrastructure and public transit. Predictably, this (semi)privatization scheme garnered a lot of attention, not least from organized labour. This is a familiar story. Fans of history will remember that this debate over the value of privatization has persisted at least since the UK’s Margaret Thatcher ‘took on the unions” in the 1980’s. It might seem fitting then, that this scheme has prompted a legal battle between the country’s largest provincial government, the Ontario Liberals, and the country’s largest union, CUPE (the Canadian Union of Public Employees). For all its continuity, today’s dynamics are a strange take on history. That we have Canada’s traditionally centre-left mainstay party pushing for privatization while the conservative opposition decries their approach might leave some people scratching their heads – but that’s another blog. Suffice it to say here that the economic and distributive impact of privatization is debated, and it is not obvious that the provincial treasury will benefit from it, even in the medium-term (see, e.g., this article). In short, this issue doesn’t fit neatly into traditional party divisions. Last fall, CUPE’s president Fred Hahn (on behalf of the union) brought the suit against the Ontario government, alleging that the sale of Hydro One shares, and, in particular certain fundraisers, constituted “misfeasance in public office”. While the focus of the suit, technically, is on a December 7, 2015 fundraiser in which party fundraising and government business are alleged to have inappropriately overlapped, Mr. Hahn’s lawyer, Darrell Brown, has candidly acknowledged that “the ultimate objective is to convince the government to stop any further sale” (as reported here). Whether you agree or not, it’s no secret that CUPE, like other labour unions, is ideologically opposed to privatization. Yet the government, for it’s part, certainly doesn’t seem to be looking for ideological debate. Last Tuesday the government notified CUPE it would be bringing a motion to strike – i.e. dismiss – the suit. If successful, the case will be dead in the water. The government claims the suit amounts to an “abuse of process” in that Integrity Commissioner J. David Wake already addressed the matter and found no illegal activity. CUPE, on the other hand, views this strategy as a means of delaying and ultimately avoiding, a public trial. The motion will likely be heard in the spring. Even if CUPE can successfully stave off dismissal at this early stage, they will still need to make their case at trial. It may prove an uphill battle. The Liberal government has little to gain from a public mudslinging match, and a motion to strike is a legally legitimate means of avoiding one. Whether it’s a wise political calculation remains to be seen. * * * * * There are two sides to every story. The talented and experienced lawyers at Devry Smith Frank LLP can help you tell yours, while ensuring your legal rights are protected. If you or someone you know is in need of legal representation, please do not hesitate to contact us at 416-449-1400 in Toronto, 705-812-2100 in Barrie, or 289-638-3171 in Whitby, or send us an email at info@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Human Rights LawFebruary 8, 2017June 16, 2020
Home Prices Continue to Rise in 2017 January has brought yet another spike in home prices as the Toronto Real Estate Board (TREB) reports in the Star that January saw a 22% year-over-year increase in the price for a home. The average selling price was up $140,552 from a year ago, with the average selling price in the region being $770,745 in January. Areas that saw more growth were low-rise, detached, semi-detached and townhomes with 26-28% increases compared to last year. Even condos increased by 14.5% from the year before. It has been confirmed, however, that there still is a relatively low number of listings in the market, half of what was available last year yet, the TREB still believes this year will see gains. Gains between 10-16% and single-family homes with the biggest demand. Is this increase due to the amount of foreign buyers in our market? A question that has been asked for some time now – we now have some data to provide an answer, for the time being. A recent article answers the above question as, no. TREB calculated that 4.9% of transactions involved offshore buyers – further proving that it is the lack of supply in the region, not foreign investors. There are, however, real estate agents that challenge the above number. Some realtors can account that 20-30% of their business comes from foreign transactions. This also causes a comparison of Toronto to Vancouver to be discussed, where they underestimated the amount of foreign ownership – which resulted in the tax that brought sales down 40% in January alone compared to a year earlier. People suspect the “Vancouver experience” is going to happen here. In addition, we now have a new President of the United States, Donald Trump. Take a look at our previous article addressing the Canadian real estate market amid a Trump takeover, where we discuss the market in 2017 and what might happen now that Donald Trump is president. The findings were that Toronto was ranked 13th on the most unaffordable cities in the world list, prices have climbed 22% in Toronto, and Americans flooded the real estate pages in Toronto looking for family homes in the city, not vacation homes. Most importantly, it is too early to tell what will happen to our market now that Trump is in office. With data showing there was minimal involvement with offshore investors, Americans looking for homes in Canadian cities now that Trump is president, and the very limited supply of homes in the city of Toronto – the fear is it will continue to increase because of the lack of supply and increase in demand. All that is occurring in Toronto’s market – the foreign investment, lack of supply, high demand, amount of money home buyers have on hand to initiate bidding wars and the seemingly never-ending rise in home prices – William Strange, a professor of business economics at U of T can only sum it all up by saying, “it’s the craziness of the market.” If you have any real estate inquiries or are in need of a real estate lawyer to handle a transaction, please contact the Real Estate Lawyers of Devry Smith Frank LLP today. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateFebruary 6, 2017June 16, 2020
Important Tax Information for Parents with Shared Custody A recent Canadian Tax Court Case has important implications for parents with shared custody and the way child support is paid and collected. The decision in Harder v. The Queen changes the way parents with shared custody must deal with child support. It is likely that most parents with shared custody will have to change their child support arrangements and the Family Responsibility Office will have to change its procedures to prevent running into tax problems. How Shared Custody, Child Support and Taxes Used to Work The Supreme Courts set the rules for child support in shared custody in it decision in Contino v. Leonelli- Contino. At paragraph 49 of that decision, the Supreme Court said that the starting point for calculating child support in shared custody, which persists unless it results in an unfair sharing of the costs of raising the children, is that the parents calculate what each of them would owe under the Child Support Guidelines Tables and set those amounts off against each other. In the majority of shared parenting situations, consistent with the Supreme Court’s decision, parents agreed to use set-off the child support amount such that the parent with the higher income made a child support payment that reflected the set off amount. Part of the basis of this set-off approach is that each parent gets some of the tax benefits associated with caring for the children in a shared custody situation. The amount of child support under the tables takes into account the tax deductions/benefits available to parents for having children. The CRA’s policy on tax credits and benefits for parents in shared custody situations states that when parents share custody of their children, they must rotate the benefits/credits for the children such that each parent gets the tax benefits for the children for six months of the year. That policy was last updated in July 2015. As a result of this policy, parents with shared parenting set off support against each other and each claimed half the tax benefits for the children for whom they had shared custody. The Significant Changes to Child Support to Avoid Tax Problems According to Justice Block in his tax court decision in Harder v. The Queen, the Courts, Family Arbitrators, Family Mediators, Family Lawyers and separated parents did not properly consider the Section 118(5) of the Income Tax Act in making the above-described child support arrangements. That section of the Income Tax Act states that a person who has to pay support for a dependent cannot claim tax deductions or benefits with respect to that dependent. Children are dependents. So, that means that, notwithstanding the Canada Revenue Agency saying that benefits must be rotated in shared custody situations, a parent paying child support may not claim those benefits. Based on the Supreme Court’s decision in Contino about setting off support in shared parenting, and the CRA’s policy that benefits be rotated in shared parenting, it seemed logical to interpret the “set-off support” paid in shared custody situation as parents notionally paying each other, but simplifying the logistics of that by having the payments flow only one way – from the higher-income parent to the lower-income parent. This is how child support orders and agreements were written and how the FRO processed support. However, in Harder v. the Queen, Justice Block stated that interpretation was wrong under tax law. Where parents set-of child support amounts, this resulted in only one parent receiving support and one parent paying support. Under the wording of section 118(5) of the Income Tax Act, the parent paying support could not claim the benefits and credits in relation to the child or children for whom that parent was paying child support. According to the decision in Harder v. the Queen, the correct thing to do is for each shared custody parent to actually pay the full table child support amount to the other parent so that the full table support is flowing both ways. The Family Responsibility Office should collect the full child support amount payable by each parent and pay it to the other parent, essentially having the support between the parents cross paths as doing a “set off” will have negative tax consequences for at least one of the parents. There are some obvious practical problems with the approach set out in Harder v. the Queen. For example, a lower-income parent may not have the funds available to make the support payment until receiving the support from the higher income parent. That would cause one of the support payments to “bounce” and one parent to “overpay” by not getting the support back to which he or she is entitled. It will also dramatically increase the cost for the Family Responsibility Office, and the support collection agencies in other provinces, to enforce child support in shared parenting arrangements. However, as Justice Block points out, this complicated and tedious approach to child support in shared parenting is required by section 118(5) of the Income Tax Act and it is the way things must be done until Parliament changes the law. 32 – How to Change a Support Order Justice Block’s decision in Harder v. the Queen means that most parents with shared custody will have to change what they are doing for child support. It may also mean that they have to change their child support order or separation agreement to reflect how the Income Tax Act requires child support to be paid so that both parents can get the tax benefits related to raising the children. The Ontario Family Law Podcast and this video give some general advice about how to change a support order or agreement. However, the rules for separation agreements require that separated parents and spouses consult with a family lawyer, and they will probably speak to a lawyer who understands both family law and tax law to make sure the agreement or court order does what they expect. Obviously, parents who have just separated and who are planning on sharing custody of their children will want to make sure that their child support order or separation agreement complies with the requirements to maximize the tax relief for them. Again, they should contact an excellent family lawyer to make sure that happens. To learn even more about child support, get a copy of this easy to understand book on the basics of Ontario Family Law as a paperback, or download it immediately as a $9.99 e-book for Kindle, Kobo, or iPad/iPhone/Mac. You may also want to listen to this podcast or watch this video. You can also use the search on the right to find lots more articles about marriage and divorce. Obviously, there can be a lot of money involved in child support cases and only could really help a child with his or her needs (or not). You need to get the help of a lawyer immediately to avoid financial hardship. Contact Certified Specialist in Family Law (and author of the book above), John Schuman, by emailing him or by calling 416-446-5847. We answer all inquiries promptly and we can arrange for you to come in quickly for a consultation (charged at a reduced hourly rate). By Fauzan SiddiquiBlog, Family Law, TaxJanuary 30, 2017June 16, 2020