Insights

The practice of law is changing every day, and the effect of changing legislation on businesses is significant. We write about recent developments in the world of tax & business law, keeping a watchful eye on the changing landscape for our clients. See what we’re thinking about, and what your business should be looking out for.

Business Law

Not your traditional asset

Lawyers need to get up to speed on the risks associated with handling digital assets for their clients. Click here to view this article as originally posted in the CBA National. Love it or hate it, Bitcoin ownership continues to gain steam in Canada and around the world. A 2021 study estimates that 1.2 million Canadians (3.2%) hold Bitcoin. This year also saw the release of several Canadian Exchange Traded Funds (ETFs), allowing Canadians to invest in Bitcoin without the technical difficulty of storing it. Significant price volatility since its inception have not lessened demand for Bitcoin and the new approach to value that…


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Tax & Estate Planning

STEP Canada / Canada Revenue Agency Roundtable (2021)

This year, Katherine Ratcliffe attended the 23rd annual Society of Trust and Estate Practitioners (STEP) Canada National Conference, delivered in a fully virtual format, on June 14th and 15th, 2021. As usual, the STEP Canada/Canada Revenue Agency (CRA) Roundtable was one of the highlights of the conference. During the Roundtable, the CRA provided detailed answers to 15 pre-selected questions posed by trust and estate practitioners across Canada on a variety of topics. In advance of the release of the CRA’s official answers to the 2021 Roundtable questions later this summer, Katherine is pleased to provide her summary of the verbal...

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Estate Litigation

Fair Warning! Recent Judicial Treatment of No-Contest Clauses in Wills

One of the more controversial clauses that a testator can place in his or her will is a “no-contest” clause, the purpose of which is to deter any would-be challengers to the will and discourage fighting amongst beneficiaries. This objective is accomplished by wording to the effect that a beneficiary will be automatically disentitled to any distribution or gift contained in the will if he or she challenges the will or commences litigation in respect of the will. These clauses have often been challenged as being “in terrorem” – a category of unenforceable forfeiture clauses that includes restraints on marriage…


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Estate Litigation

Addressing the Problem Child: The Efficacy of Placing Limits on Testamentary Bequests

A recent case decided by the Court of Queen’s Bench of Alberta dealt with a rare, yet not unheard of, set of circumstances where a beneficiary survives the testator but passes away before a grant of probate is obtained. What made this case especially unique, however, is that the beneficiary in question (one of the testator’s four children) was designated to receive only a monthly income from an annuity that the trustee was directed to purchase with the beneficiary’s share of the estate. A dispute resulted about what, if anything, the deceased beneficiary’s estate was entitled to from her late…


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Tax Law

Netflix and Vaping: Budget 2021 Imposes Indirect Tax Measures

In Budget 2021, the Federal Government proposes a wide array of spending programs and few material tax increases for Canadians. While Budget 2021 may not appear to impose significant direct tax increases, in this article we highlight some of the indirect tax measures that could affect Canadians or even non-Canadians who own Canadian real estate. Unproductive Use of Canadian Housing Budget 2021 proposes a new 1% tax on the gross value of Canadian housing owned by non-Canadians considered to be “vacant” or “underused”. This tax will be imposed annually starting in 2022. More details on this new tax will come…


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Tax Law

Federal Budget 2021: Consumption Tax on Luxury Goods Favoured over Wealth Tax

“It is fair to ask those who have prospered in this bleak year to do a little more to help those who have not. That is why we are introducing a luxury tax.” – Federal Finance Minister, Chrystia Freeland, April 19, 2021. Tax initiatives targeting high-net-worth individuals have been rumoured for almost as long as Prime Minister Justin Trudeau’s Liberal government has been in power. Speculation was further fueled by the Prime Minister’s mandate letter to newly minted Federal Finance Minister, Chrystia Freeland, to “identify additional ways to tax extreme wealth inequality.” That was January 15, 2021. As of April…


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Tax Law

Canada’s 2021 Budget: A Sigh of Relief?

In light of the ongoing COVID-19 pandemic and increased government spending over the last year, tax advisors anticipated that the Federal Government’s 2021 budget (Budget 2021) would include significant tax increases aimed at the wealthiest Canadians who should, in the government’s view, shoulder the financial burden of the pandemic. Instead, Budget 2021 has taken a less obvious approach to achieving its stated objective of fairness in tax policy, focusing its messaging on new or extended spending measures to provide support for families and businesses affected by the pandemic. In the words of Deputy Prime Minister and federal Finance Minister, Chrystia…


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Litigation

Purchasers Issued Expensive Reminder to Respect Closing Obligations

On January 12, 2021 the Alberta Court of Appeal issued its decision in H&C S Holdings PTE Ltd v Pengrowth Energy Corporation, 2020 ABCA 473, upholding the 2019 decision of Justice R.A. Neufeld of the Alberta Court of Queen’s Bench. This decision issues a stark reminder to purchasers of the consequences that can flow from failing to adhere to their contractual closing obligations. The purchaser was a start-up energy company formed by veteran oil executives. It entered into a contract to purchase certain oil and gas assets from the vendors for $180,000,000 and provided an $18,000,000 deposit under the purchase...

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Litigation

Dissolution Not a Shield to Oppression Claims

Our article focuses on the recent Alberta Court of Appeal decision of 698829 Alberta Ltd. v Elite Homes (1998) Ltd. et al., 2020 ABCA 154 ("Friesen"). This case serves as a reminder of the liabilities of a dissolved corporation and that dissolution does not protect a directing mind from claims of oppression. This decision is of interest considering the current economic conditions due to the COVID-19 pandemic and the increased number of struggling businesses. Background 698829 Alberta Ltd. ("698") and Elite Homes (1998) Ltd. ("Elite") entered into a joint venture agreement ("JVA") wherein 698 contributed $692,626 to assist in the...

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Litigation

An Important Update on Employee Bonuses

Supreme Court ruling entitles employees to bonuses after termination if within reasonable notice period Our focus in this article is the recent decision of the Supreme Court of Canada in Matthews v Ocean Nutrition Canada Ltd., 2020 SCC 6 (“Matthews”).  Being touted a landmark ruling in employment law, Matthews should be of interest to Canadians who receive any kind of bonus or commission.  We carry on below to address the interplay between Matthews and the important Alberta Court of Appeal decision in Styles v Alberta Investment Management Corporation, 2017 ABCA 1 (“Styles”), which clarified the law with respect to how...

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