Del Chatterson

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Margot E. Uson
Del Chatterson
Marco Della Rocca
Terry Fitzpatrick
Michael Hiles Associates Inc. Michael Hiles
Chris Murray
Brett Maclean
Steve Kraml
Morrie Weinberg Associates Inc.
SORELLA, LAHAIE Avocats Simon Lahaie
Robin Whitrod, CA
Vince Santaguida
Morrie Weinberg
Learn more about our members at www.psnetwork.ca
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Strategies for Success in Challenging
Times by Morrie Weinberg Michael Hiles Robin
Whitrod
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THE NEW YORKER, Feb.9, 2009
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• Morrie Weinberg and Associates Inc.
• Business Consultants specializing in
• Government Financial Assistance,
• 1 Training Tax Pay Equity Compliance,
• Business Process Re-engineering,
• ERP software selection and implementation.

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• GOVERNMENT CAN HELP !
• Federal Provincial Government Grants
• Quebec 1 Training Tax Compliance
• SR ED Tax Credits
• Quebec Design Tax Credits

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• Federal Provincial
• Government Grants

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• Federal Provincial Government GRANTS !
• Economic Development Canada
• Emploi-Quebec
• MDEIE
• Investissement Quebec

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• Federal Provincial Government GRANTS
• MOST COMMONLY SUPPORTED PROJECTS
• Training (needs analysis and execution)
• Technology Improvement (soft costs)
• Operational Improvement (consulting, analysis)
• Market Development (new initiatives)
• Human Resource Management (analysis, coaching)
• Hiring (specialized positions, visible
  minorities).

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• Federal Provincial Government GRANTS
• MOST IMPORTANT CONSIDERATIONS
• What exceptional activity are you planning?
• What is the projected amount of your investment?
• What is the timing of your investment?
• How will this investment impact your company?
• How many people do you employ at present?.

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• Federal Provincial Government GRANTS
• TYPICAL FINANCIAL SUPPORT
• 40-75 of eligible consulting expenditures
• Up to 100 of eligible training expenditures
• Up to 10 on major capital investments of
  300,000 or more.

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• Quebec 1 Training Tax Compliance

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• Quebec 1 Training Tax Compliance
• IMPORTANT CONSIDERATIONS
• There are numerous forms of eligible training
  expenditures
• Each type of training expenditure is calculated
  differently and requires specific documentation
  and evidence
• Excess training may be carried forward
  indefinitely and used in future years to offset
  training shortfalls
• Unnecessary payments are recoverable for up to 4
  years.

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• Quebec 1 Training Tax Compliance
• THE ULTIMATE GOALS ARE TO
• Ensure you capture and properly document every
  eligible dollar of training investment every year
• Show continuity in training philosophy
• Ensure that your historic training declarations
  are properly supported and documented and that
  you do not have any unknown financial exposure
• Ensure recovery of any training taxes paid
  unnecessarily.

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• Morrie Weinberg and Associates Inc.
• THANK YOU.
• Questions?

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• A. Michael Hiles Associates Inc.
• Advising clients on their
• Compensation and Total Rewards programs.

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Compensation Strategies for Tough Times
Your compensation policy carries the loudest
message about what you want your employees to
do. It is also your single biggest expense. It
deserves your attention.
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Todays Agenda

• The Competition intentions, evolution
• Compensation Administration
• Sharpening the pencil
• Variable Pay
• Keeping control
• Non-traditional ideas
• Beyond the numbers

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Cutting Back in 2009

• Intentions (May 2008)
• 2.9 to 3.9 (inflation 1.5 to 2.0)
• Varies by region, industry
• Intentions (December 2008)
• 2.4 to 3.1 (inflation 0 to 0.6)
• Inflation (Consumer Price Index)
• Total CPI 2.0 / Core CPI 2.4

November
Source WorldatWork, Mercer, Conference Board,
Bank of Canada
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What are Companies Planning?
Latest information Trend continues towards
salary freeze
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Getting This Right Is Important

• Cutting Back Too Much
• Become uncompetitive
• Tougher to higher/retain strategic employees
• Employees have long memories
• Cutting Back Too Little
• Positions you too high in the market
• Very difficult to recover
• Salary costs are too high for too long.

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Performance Appraisals
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Performance Appraisals
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Apply Adjustments Carefully

Average performance produces a COLA adjustment
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Combining The Two

• Using the illustrations
• Savings of 1.205 of payroll
• Requires planning
• Include honest communications
• Collective agreement.

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Variable Pay - Creativity

• Look at bonuses
• Balance employee incentive with Company ROI
• Make bonuses self-funding
• Set objectives carefully
• Make sure objectives are achieved
• Replace base pay increases by one-time bonuses.

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Variable Pay - Creativity

• Annual salary adjustment Profit Sharing
• Share the wealth, share the pain

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Total Rewards Beyond Pay

• Goal retain best employees
• Identify key positions, staff
• Foster partnership environment
• Look for development opportunities
• Creative downsizing
• Selective 3-4 day weeks (better than bye-bye)
• Maybe an opportunity

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Communicate, Communicate, Communicate!

• Tell everyone that
• The economy is affecting the company
• Pay will reflect company performance
• Bonuses, increases etc. are NOT an entitlement
• Goal - fairness in a tough economy
• Working for the good of all stakeholders.

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So, More Than Ever

• Manage your compensation effectively.

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A. Michael Hiles Associates Inc. THANK
YOU. Questions?
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Offering accounting and financial advisory
services to a wide range of small and medium
sized businesses.
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• TAX STRATEGIES INTOUGH TIMES

• Changes to owner/manager compensation
• The new Tax Free Savings Account
• Highlights of the most recent Federal Budget

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Profitable vs. Loss Company
SALARY Comparison SALARY Comparison SALARY Comparison SALARY Comparison
COMPANY COMPANY Profitable Loss
Salary Salary 100,000 100,000
Employer DAS 10 Employer DAS 10 10,000 10,000
Company Tax Savings 19 Company Tax Savings 19 (20,900) 0
89,100 110,000
INDIVIDUAL
Salary 100,000 100,000
Personal Taxes (33,220) (33,220)
QPP QPIP (2,300) (2,300)
NET TO OWNER 64,480 64,480
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Profitable vs. Loss Company
DIVIDEND Comparison DIVIDEND Comparison DIVIDEND Comparison DIVIDEND Comparison
COMPANY Profitable Loss Loss
Profit 110,000 89,100 110,000
Company Taxes 19 (20,900) 0 0
Dividend 89,100 89,100 110,000
INDIVIDUAL
Dividend 89,100 89,100 110,000
Personal Taxes (16,958) (16,958) (24,414)
Health Services Fund (1,000) (1,000) (1,000)
NET TO OWNER 71,142 71,142 84,586
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TAX FREE SAVINGS ACCOUNT
KEY HIGHLIGHTS

• Annual contribution limit of 5,000 for 2009,
  indexed post 2009.
• Only for individuals 18 years or older.
• Unused room for any one year carries forward.
• Withdrawals regenerate room.
• continued

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TAX FREE SAVINGS ACCOUNT
KEY HIGHLIGHTS

• Income/capital gains never taxed.
• Great for interest and capital gains lousy for
  capital losses. Good for dividends when income
  is above 75,000 and great for seniors who have
  their OAS payments clawed back.
• No attribution if funded by spouse.
• continued

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TAX FREE SAVINGS ACCOUNT
KEY HIGHLIGHTS

• Upon death a TFSA transferred from 1 spouse to
  another maintains its tax-free status but no
  additional contributions can be made for the
  deceased spouse.
• Emigrants can keep a TFSA but cannot make future
  contributions. Therefore top it up before you go
  and move to Bermuda

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tax free savings account
Example Example Example Example Example
YEAR AGE Contribution Earnings_at_ 5 Value
2009 40 5,000 250 5,250
2014 45 5,520 1,783 37,438
2019 50 6,095 3,891 81,719
2024 55 6,729 6,751 141,766
2029 60 7,430 10,586 222,302
2034 65 8,203 15,685 329,395
TOTAL TOTAL 168,355 161,040 329,395
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FEDERAL BUDGET HIGHLIGHTS
BUSINESS

• Small Business Limit ? 500,000 from 400,000
  starting 2009
• 100 write-off of computers and software
  purchased to January 31, 2010
• Mandatory electronic filing of corporate taxes
  starting 2010 if Revenues gt 1 million

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FEDERAL BUDGET HIGHLIGHTS
PERSONAL

• Basic exemption increased to 10,320 from 10,100
  (9,600 in 2008)
• Bottom bracket widened by 7.5 to 40,726
• Home renovation credit at 15 of costs over
  1,000 to a maximum credit of 1,350 (i.e.
  9,000 x 15)
• First time home buyer credit of 750

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THANK YOU. Questions?
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Merci et Bonne Journée
Del Chatterson
Marco Della Rocca
Terry Fitzpatrick
Michael Hiles Associates Inc. Michael Hiles
Chris Murray
Brett Maclean
Steve Kraml
Morrie Weinberg Associates Inc.
SORELLA, LAHAIE Avocats Simon Lahaie
Robin Whitrod, CA
Vince Santaguida
Morrie Weinberg
Learn more about our members at www.psnetwork.ca