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(November 29, 2007) A new study from the World Bank and PricewaterhouseCoopers says Canada ranks 99th out of 178 for total tax rate, and fares “moderately well in ease of paying taxes and administering taxes.”

The report, Paying Taxes 2008, says there is room for improvement in Canada’s taxation system. “There is a win-win opportunity for governments and firms if governments simplify tax systems, ease the compliance cost on business, and reduce tax rates,” says the study.

The report takes a look at a variety of things, including the number of tax payments made, the time it takes to comply and the cost of taxes, which is measured by the total tax rate.

Last year Canada actually fared better, coming in 77th out of 175, but that doesn’t mean the country is any worse off this year. “Since this year’s report has been written, there has been the elimination of the Canadian Federal Large Corporation Tax, which represents a real savings for many corporations operating in Canada,” says Tom O’Brien, a PwC Canada tax partner.

He adds that with the decrease in federal and provincial corporate income tax rates, and the “harmonization of the Ontario and Canadian corporate tax systems, Canada’s total tax rate ranking is expected to improve in the near future.”

The countries with the lowest total tax rate are Vanuatu, the Maldives and the United Arab Emirates. The highest are Sierra Leone, Burundi and the Gambia. The U.S. lands at the 102 spot, and the United Kingdom at 52.

If there were more tax incentives, especially when it came to the scientific research and experimental development tax, companies would invest more in research and development in Canada.

That’s according to a KPMG survey, which said that 86% of 345 respondents said that they’d welcome SR&ED tax incentives.

At the same time, 36% reported that tax incentives are not a factor in deciding where a company’s R&D activity should take place.

“Canadian companies are telling us they think the R&D tax incentive program is a positive one for R&D in Canada,” says Alan Katiya, national leader and partner for KPMG’s SR&ED Tax Services Group. “However, there is room for improvement in the process; the program needs to be administered in a more effective way to ensure that companies are able to access the benefits available to them.”

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Investeco launches new environmental fund

(November 29, 2007) Another environment-focused fund is hitting the market. The Investeco Global Environmental Sectors Fund, from Investeco Financial, is aimed at providing long-term capital appreciation by investing in the environmental sector.

The minimum initial investment is $50,000 — or $150,000 for investors who don’t qualify as accredited investors.

The company hopes to outperform broad global indexes by investing in businesses that specialize in alternative power, water, natural and organic foods, and environmental technologies.

“Investeco has developed considerable expertise by investing in all sectors of the environmental economy and successfully managing private equity funds in this specialized space,” says Andrew Heintzman, Investeco’s chairman. “Investeco is very pleased to offer Canadian investors a new opportunity to capitalize on the rapid growth of publicly traded global companies in these emerging environmental sectors. We will apply the same disciplined investment strategy to investing in the Investeco Global Environmental Sectors Fund, buying quality businesses and holding them through their development cycle.”

The fund comes with management fees ranging from 1% to 1.5%, while a 10% performance fee will be applied when an investor cashes in his or her units of the fund.

Units are available as A class, F class and I class. The first closing of subscriptions for units will be on January 4, 2008.

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Canada’s productivity growth troubling: CMA Canada

(November 29, 2007) On Thursday the Certified Management Accountants of Canada called on the government to invest in “people, physical capital and innovation” in order to improve the country’s productivity performance.

Richard Monk, chair of CMA Canada, made these remarks to the House of Commons Standing Committee on Finance in response to Canada’s “troubling” record on productivity growth.

According to CMA Canada, from 2000 to 2006, the gap between Canada and America’s labour productivity widened from 17% to 26%.

Monk says that the biggest economic challenge for Canada is getting productivity growth back to at least pre-2000 levels.

To reach this goal, the CMA suggests that the government invest in human capital by establishing a fully Canadian-branded international student scholarship to attract international students, establish incentives to encourage gifted foreign students to stay in Canada following graduation and improve literacy rates.

The government needs to think about physical capital too, says CMA Canada, by increasing efforts to harmonize the GST with the five provinces.

Innovation is also an important part of this process. CMA Canada suggests the government start encouraging greater research and development investment by extending the refundability feature of the scientific research and experimental development tax credit and permitting larger claimants of R&D expenditures to offset the tax credit against other government levies.

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Manulife gets new partner to improve healthcare benefits

Manulife Financial is getting a new partner for its healthcare services. The company has revealed that it is hiring AccelMD to provide plan member healthcare services to the business’s group benefits clients.

“After a broad review of our strategic alternatives, we are delighted to announce this agreement with AccelMD,” says Rick Brunet, Manulife’s executive vice-president, group benefits. “Their expertise and in-depth knowledge of plan member healthcare services complements our existing offerings.”

AccelMD will use Novus Health and Worldcare Inc, two healthcare organizations that the company already partners with, to help create programs and services for Manulife’s plan members.

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Date set to discuss MFDA and Berkshire settlement agreement

On Thursday, the MFDA issues a second Notice of Settlement Hearing related to Berkshire Investment Group’s conduct in investigating Ian Thow.

The settlement agreement says the company “failed to conduct reasonable supervisory investigations” of Thow.

At the first settlement hearing on October 22, the Hearing Panel said they wouldn’t approve an earlier settlement between the MFDA and Berkshire, but the two organizations were allowed to reach a new settlement.

The hearing panel will convene on December 13 to discuss the new settlement.

(11/29/07)