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(November 12, 2008) Canada’s tax system has fallen from 99th place to 105th out of a total 181 countries , according to an annual study from the World Bank, IFC, and PricewaterhouseCoopers (PwC).

The report, entitled Paying Taxes 2009, shows tax authorities worldwide are overhauling tax systems by reducing taxes, streamlining administrative processes and modernizing payment systems. Over the past year, thirty-six economies made it easier to pay taxes.

The most popular reform was reducing corporate income tax rates (in 21 economies). Five OECD high-income economies reduced corporate income tax rates, including Canada. Canada is gradually reducing the corporate income tax to 15% by 2012.

“Canada has a multi-jurisdictional tax regime and the provincial taxing authorities continue to be concerned about the domestic competitiveness of their tax regime and the ability to attract international investment and raise revenues,” says Tom O’Brien, a partner with PwC Canada’s tax practice.

PwC found in its most recent Canadian Total Tax Contribution survey that corporate income tax accounts for just two of 49 taxes and 18 other payments to government at the federal, provincial and municipal levels that businesses may bear or collect. As such, the 105th ranking signifies changes are still needed in comparison to the reforms being proactively undertaken in other countries.

“It’s worth noting that corporate income tax is only one of many taxes that business has to bear,” O’Brien says.

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PH&N makes advisor-focused changes to fund lineup

(November 12, 2008) Phillips, Hager & North Investment Management Ltd. has filed an Amended and Restated 2008 Simplified Prospectus for 25 PH&N funds. The changes are designed to enhance transparency, align PH&N’s fund series with industry naming conventions, and provide greater accessibility and expanded options for investors and advisors.

PH&N is renaming its Series A fund units as Series D, in order to clarify that this series is not intended for use by third-party advisors. The name change has no impact on the funds’ management fees or the service or advice provided by PH&N to its clients.

Series D fund units will continue to be available for purchase by investors directly through PH&N, as well as through RBC Direct Investing and other discount brokers.

The firm is also introducing Series C fund units, designed for use by full-service advisors. The new series is designed to expand the availability of PH&N funds to investors who deal with third-party advisors. PH&N will pay a trailing commission on assets invested in Series C units of up to 100 basis points for equity, dividend and balanced funds; 50 basis points for fixed income funds; and 25 basis points for money market funds.

There will be lower minimum investment requirements for PH&N funds purchased through full-service advisors. The minimum initial investment for Series C or Series F units will be $1,000 per fund in nominee-name accounts. Previously, the minimum investment through the advice channel was $5,000 per fund.

Advisors will generally be restricted to purchasing Series C and Series F units.

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TMX well prepared for competition in Canada: CEO

(November 12, 2008) The TMX Group is well positioned to serve its global clients and the Canadian market in a dynamic and increasingly competitive operating environment, according to Tom Kloet, TMX Group CEO, who spoke at the Merrill Lynch Banking and Financial Services Investor conference in New York.

“Bringing buyers and sellers together across multiple asset classes is our primary mission,” Kloet said. “We have three priorities to grow our business: to integrate the Montreal Exchange and its derivatives business with the rest of TMX Group and its cash markets; to enhance our product and service offering for our continuously changing customer base; and to innovate by creating new products and services, particularly those in the derivatives area.”

Kloet reiterated that competition is not new to the company and that TMX Group has been competing successfully on a North American scale for orders and liquidity.

“Alternative trading system activity is marginal in the Canadian marketplace today,” he said. “While recently reported competitors’ trading statistics might look impressive on the surface, they are essentially comprised of internal crosses among a very small number of participants.”

Read: Alpha sees volume near 1.7 million shares

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Caution permeates real estate market: survey

(November 12, 2008) The situation is not as bad as in the U.S., but Canadian real estate industry players are still approaching 2009 with caution, according to the annual Emerging Trends in Real Estate 2009 report released by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).

“U.S. housing woes haven’t extended to Canada, where banks and regulators have managed the excessive mortgage lending practices of our neighbours to the south,” says Frank Magliocco, a PwC partner and the national leader for the Canadian real estate practice. “Property markets, including housing, track at or near equilibrium with high occupancies and controlled development. We always get caught up in U.S. trends, but given our strong fundamentals they shouldn’t affect us to the same magnitude.”

Respondents remain positive about sidestepping any serious impacts of a possible U.S. correction. Western provinces showcase the strongest growth trends and lowest vacancies in North America. The report finds all property sectors share positive prospects, especially industrial and retail.

The report notes that best bets for real estate investors for the coming years include a focus on the high-growth energy markets. The report recommends property buyers hold coupon-clipper central business district office, develop infill condos near subway stops in Toronto, buy infill sites wherever they can and invest overseas because domestic opportunities are too limited at current prices.

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Accountant guilty of distributing worthless debentures

(November 12, 2008) A British Columbia Securities Commission (BCSC) panel found that an accountant acted as an undisclosed director and officer of a TSX Venture Exchange company and violated securities laws when he distributed millions of dollars in debentures that are now deemed worthless to Canadian investors.

According to the BCSC, in 2001, Henry Jung, a chartered accountant, became active in the operations of Bright Star Ventures Ltd., a B.C.-based mineral exploration company. Jung prepared financial statements for the company, hired staff, and was active in its day-to-day operations.

Under his direction, Bright Star issued just under $3 million of debentures, now worthless, to about 130 investors in seven Canadian provinces.

Jung denied allegations set out in the notice of hearing that he was a de-facto director of Bright Star. Jung claimed he was an “administrator,” who was merely acting at the behest of the board of directors.

The commission panel found that Jung was a director and officer of the company, and that he had illegally traded in and distributed Bright Star securities. The panel also found that Jung had failed to fulfill his obligation to file insider reports.

The notice of hearing also alleges that Jung’s colleagues, David John Allen and Reginald Clarke Handford, both former presidents of Bright Star, violated securities laws when they signed quarterly reports that omitted Jung’s name as a director and officer of the company. The commission panel found that Allen and Handford did not violate any securities laws.

(11/12/08)