TORONTO — A new report by Canada’s central bank says Canadians favour cash payments over digital ones, especially for smaller sums of money.
The Bank of Canada report, based on two surveys conducted by the bank in 2015 and 2013, found 51 per cent of transactions were made in cash in 2015, with debit cards coming next at 31 per cent and credit cards last at 19 per cent.
It noted nearly all small businesses (94 per cent) and large businesses (98 per cent) accept cash, and most shoppers carry physical money in their wallets.
The report found the median amount of a cash transaction is the smallest of any method at $8.04, a debit transaction is $28.33 and a credit card transaction is $43.85.
It said most merchants seem to prefer cash and debit card payments, as they are less costly to accept than credit cards. Only two-thirds of small- and medium-sized businesses accept debit and credit cards, it said, while nearly all large businesses do.
In 2014, it cost Canadian merchants $10 billion to accept payments with $6.2 billion of that incurred for credit card payments.
However, the report notes, current innovations in retail payments, like contactless cards, and future ones are likely to compete with cash and even replace it.
WASHINGTON — The U.S. House of Representatives approved a package of tax cuts affecting businesses, individuals and families on Thursday, moving Republicans and President Donald Trump an important step closer to the biggest tax code overhaul in a generation.
The largely party-line 227-205 vote shifted the tax debate to the U.S. Senate, where that chamber’s separate plan has already encountered resistance from some Republicans. No decisive Senate action was expected until after next week’s Thanksgiving holiday.
Trump, who is looking for his first major legislative win since he took office in January, went to the U.S. Capitol just before the vote to urge Republicans to pass the tax measure, which Democrats call a give-away to the wealthy and businesses.
“Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity, to help these middle-class families that are struggling,” House Speaker Paul Ryan told lawmakers before the vote.
Congress has not thoroughly overhauled the sprawling U.S. tax code since Republican Ronald Reagan was president. The House measure is not as comprehensive as Reagan’s 1986 sweeping package, but it is more ambitious than anything since then.
Its path forward in the Senate, where Republicans have a narrow majority, is fraught with political obstacles involving the federal deficit, healthcare and the distribution of tax benefits. Republicans can lose no more than two Senate votes.
Senate Republican tax writers made the risky decision to tie their plan to a repeal of the mandate for people to get healthcare insurance under former President Barack Obama’s Affordable Care Act, exposing the tax initiative to the same political forces that wrecked their anti-Obamacare push earlier this year.
The House bill, which would be estimated to increase the federal deficit by nearly $1.5 trillion over 10 years, would consolidate individual and family tax brackets to four from seven and reduce the corporate tax rate from 35 percent to 20 percent.
It also would scale back or end some popular tax deductions, including one for state and local income taxes, while preserving a capped deduction for property tax payments.
Democrats have pointed to analyzes showing millions of Americans could end up with a tax hike because of the elimination of popular deductions. Repealing or cutting some deductions is a way to offset the revenue lost from tax cuts.
“It’s a shameful piece of legislation, and the Republicans should know better,” House Democratic leader Nancy Pelosi told lawmakers before the vote.
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OTTAWA — The federal government is putting in place the 10 people who will guide a new agency designed to help finance new highways and transit systems across Canada.
The newly unveiled list of directors for the Liberal government’s new infrastructure bank includes lawyers, business leaders, a former mayor of Calgary, Indigenous leaders and the former president of the Montreal airport authority.
The announcement is a key step for the agency, which the Liberals have promised to have up and running by the end of the year.
The board, led by former Royal Bank executive Janice Fukakusa, will help the Trudeau government decide who should be the agency’s first chief executive. Former Calgary mayor David Bronconnier is also a member, as is James Cherry, formerly president and CEO of Aeroports de Montreal.
The bank will take $35 billion in government funding and use the money to potentially leverage three or four times that much in private dollars to help finance infrastructure projects across the country.
Eligible projects will have to generate revenue, meaning roads, bridges, water and transit systems where user fees help to defray costs.
OTTAWA — “Our investments have already yielded results. We are on track to recuperate $25 billion from our efforts against tax avoidance and tax evasion.” — Prime Minister Justin Trudeau.
There are two certainties in life, and one of them the government doesn’t want you cheating on.
The depth of Canada’s tax evasion and avoidance problem erupted in overwhelming detail last week with the release of a trove of documents about offshore accounts and trusts, dubbed the Paradise Papers, that delivered a broadside to the prime minister’s oft-repeated mantra of creating a fairer tax system for the middle class and its hard-working aspirants.
Trudeau responded with a haymaker of his own: The government had identified and was on track to collect $25 billion in unpaid taxes over the last two years. His intended message was clear: Canada won’t turn a blind eye to those who cheat on — or otherwise go to extreme lengths to avoid paying — their taxes.
But did the government cheat on its numbers?
Spoiler alert: The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of “no baloney” to “full of baloney” (complete methodology below).
This one earns a rating of “a lot of baloney.” Here’s why.
The prime minister made two statements on Nov. 6, the first day that the fallout from the Paradise Papers hit the House of Commons. During question period, Trudeau first said the government had “identified $25 billion in unreported income.” A few minutes later, he said the government was “on track to recuperate $25 billion from our efforts against tax avoidance and tax evasion.”
In the 2016-17 fiscal year, which ended March 31, the agency targeted $8 billion in forgone taxes from large businesses, including about $1.8 billion flagged as stemming from tax avoidance or evasion. There was also $2.6 billion identified as unpaid GST and HST, and a further $1.6 billion in possible unpaid taxes from small businesses.
The combined value was $12.2 billion. The agency’s annual report from the previous fiscal year noted virtually identical figures in each category, and a similar total: $12.2 billion, for a two-year total of $24.4 billion — nearly all of the $25 billion cited by Trudeau.
The figure represents the extra revenue the government should have collected, said Ted Gallivan, assistant commissioner of international, large businesses, and criminal investigations branch. It usually crosses multiple tax years and can be calculated upon existing taxpayer balances, he said.
For really high-value balances, the CRA may make accommodations to collect the balance over time so a business doesn’t go bankrupt, meaning the debt lasts for a while, Gallivan added.
The figures for the last two fiscal years are not out of line with the preceding two-year period. Agency reports show auditors identified $20.5 billion in unreported tax between April 2013 and March 2015.
In their 2016 budget, the Liberals gave the Canada Revenue Agency $444.4 million over five years to go after tax cheats, expecting it to result in the collection of $2.6 billion in previously unpaid taxes. This year’s budget added $523.9 million over five years, aimed at recouping $2.5 billion in revenues.
The net result: the government expected to come out of all that spending $4.13 billion ahead.
When the government cites the $25-billion figure, they’re referring to how much auditors have identified as problematic — not how much officials will collect in the end, said Dennis Howlett, CEO of the advocacy group Canadians for Tax Fairness.
It includes years of unpaid taxes that were only recently identified. What’s more, the final figure can change, since the government can settle out of court and discount any penalties without making the details public.
Hussein Warsame, an accounting professor and the CPA Fellow in Taxation at the University of Calgary, said the government will likely collect about half of what it expects, or even less once the cost of employee time, legal fees and other expenses are factored in.
“That $25 billion is not what the government is going to get,” Warsame said.
Well over 90 per cent of the approximately 80,000 appeals of Canada Revenue Agency audits filed each year are settled before they ever go to court, said Geoffrey Loomer, a tax law professor from Dalhousie University in Halifax.
Most of the $25 billion in question would likely be wrapped up in those appeals, he said. Of that amount, overseas tax evaders are a small percentage; most are people like restaurant owners who neglect to collect GST, or contractors who fudge their income on their tax returns, Loomer said
The government is no doubt recouping some of its losses from tax cheats and avoiders who hide their money offshore. But are they going to collect all $25 billion? Unlikely, say experts.
“There is definitely some truth to what they’re claiming, but they’re prone to exaggerating a bit and they are fuzzy about different terms,” Howlett said.
That’s why this statement receives a rating of “a lot of baloney” — the $25-billion number might be accurate, but the chances the government will recoup all of it are remote at best, contrary to Trudeau’s claim the government is “on track” to recover all of it.
The prime minister was largely correct when he characterized the $25 billion as “unreported income,” but he overreached moments later by declaring the government was planning to recover the same sum.
The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:
No baloney — the statement is completely accurate
A little baloney — the statement is mostly accurate but more information is required
Some baloney — the statement is partly accurate but important details are missing
A lot of baloney — the statement is mostly inaccurate but contains elements of truth
Full of baloney — the statement is completely inaccurate
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The answer, at least for Inboard Technology, is to go out and raise $8 million in a new round of venture funding to become the Tesla of skateboards. Read More