The Lawyers Weekly - March 16, 2012

THE LAWYERS WEEKLY
March 16, 2012 | 21

BUSINESS
CAREERS

The power to tax is a strong economic tool that affects our international competitiveness. The constitutional power to tax in Canada is divided between the federal and provincial governments. Hence, it is the combined impact of taxes that ultimately affects business decisions.

The federal corporate tax rate dropped from 16. 5 to 15 per cent on January 1 this year. Combined with a provincial corporate rate that ranges from 10 to 15 per cent depending on the province, our tax rate is internationally competitive and bodes well for economic growth. It remains to be seen, however, if the provinces will raise their taxes to finance their deficits or stimulate growth through competitive taxation.

The Constitution divides the authority to impose taxes between the federal and provincial governments. The federal Parliament has the power to raise money by any mode or system of taxation. The provinces can impose income taxes only through direct taxation within the province and only for raising revenue for prov-

TAX VIEWS

VERN
KRISHNA

incial purposes. This division of taxing power gives the federal government considerable leverage over the national economy and the distribution of wealth among the provinces.

The lower the federal rate of tax, the more room for the provinces to tax. The dual authority to levy income taxes results in differential income tax burdens in the country. The income tax burden for Nova Scotia residents, for example, was substantially higher (50 per cent in 2010) than the equivalent tax in Alberta (39 per cent).

The rationale for limiting provincial
legislatures to direct taxation is to contain
provincial powers within provincial
boundaries. Thus, the provincial taxing
power is limited to direct taxes, imposed
within the province and for provincial pur-
poses. These three requirements prevent
provinces from using their taxing power
for colourable purposes by concealing
their real objectives. In economic terms,
however, we cannot contain provincial
taxes within provincial boundaries. Tax-
payers can always pass on direct taxes
through prices to others (for example,
consumers) outside the province.

Vern Krishna, QC, FCGA, is tax counsel with Borden Ladner Gervais, LLP, and executive director of the CGA Tax Research Centre, University of Ottawa. E-mail: vkrishna@blg.com

Recognizing In-House Counsel Excellence

The National Post and ZSA Legal
Recruitment are pleased to launch the 2012

Canadian General Counsel Awards to honour
the country’s top In-House Counsel. The
black-tie gala celebration will take place at
the Fairmont Royal York in Toronto on
Monday, June 11th.

Huron-Perth Children’s Aid Society

Has an immediate opening for an

IN-HOUSE LEGAL COUNSEL IN-HOUSE LEGAL COUNSEL

Reporting to Senior Counsel, the candidate will bring to the agency, proven litigation skills, superior dispute resolution techniques and the ability to work co-operatively with agency staff and the local bar. Legal Counsel will assist staff in attempting to first resolve matters out of court, preparing for court and representing the agency in court; participate as a member of our child protection team and be involved in all aspects of planning the service to the child and family through consultation and training to agency staff on matters related to their work within the CFSA.

The candidate will have a L.L.B. and be a member in good standing of the Law Society of Upper Canada, with knowledge of the CFSA, preferably with some years experience in child welfare matters. We offer an excellent benefit package and a competitive salary.

Nominations are now being accepted from the legal and financial communities at www.cgca.ca.

(PLEASE NOTE THE NOMINATION DEADLINE IS APRIL 4, 2012).

Business Achievement Mid-Market Excellence

Please submit your resume by March 26, 2012 to: Shelly Crovetto, Manager of Human Resources, Huron-Perth Children’s Aid Society, 639 Lorne Avenue East, Stratford, ON N5A 6S4, or by fax to (519) 275-2360