Category Archives: Tax

Trinity Western University: Your Tax Dollars at Work

By: Saul Templeton

PDF Version: Trinity Western University: Your Tax Dollars at Work

Case Commented On: Trinity Western University v Nova Scotia Barristers’ Society, 2015 NSSC 25

Trinity Western University (“TWU”) claims it is a private religious institution. This is the explanation offered by the courts for denying students, staff and faculty at TWU protection under the Canadian Charter of Rights and Freedoms. This protection is denied even though it is generally accepted, even by supporters of TWU, that TWU’s Community Covenant, “indeed treat[s] LGBT people in a way that would have profoundly negative effects of [sic] their lives.” See Trinity Western University v Nova Scotia Barristers’ Society, 2015 NSSC 25 [NS Barristers’ Society] at para 251).

What does it mean for a university to be publicly funded? I am a tax scholar, so I offer a definition supported by tax policy. TWU is publicly funded because it receives significant tax benefits as a result of its registered charity status. TWU is tax exempt, and therefore underwritten by public funding. The tax exemption is equivalent to a direct subsidy to TWU, since it represents tax revenue forgone, and governments must make up the shortfall elsewhere. TWU also issues charitable tax receipts that allow (and encourage) donors to give more money to TWU than they otherwise could, since the state gives donors a kickback on their taxes for doing so.

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Alberta Flood Relief Payments: Income for Tax Purposes?

Matter considered: Tax treatment of $1 billion of Alberta government flood relief payments

The June flooding of Calgary and other parts of southern Alberta has been described as “one of the largest natural disasters to ever hit the province”. Thousands of Albertans have been displaced from over 10,000 homes, some of which are damaged beyond repair. Personal losses from the floods are beyond calculation, and total financial losses to personal property and businesses are as yet untallied. The Alberta government has pledged $1 billion in immediate financial assistance, but it is unclear how those funds will be allocated.

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The Big Picture – Supreme Court of Canada Sheds Light on Transfer Pricing

PDF version: The Big Picture – Supreme Court of Canada Sheds Light on Transfer Pricing

Decision commented on: Canada v GlaxoSmithKline Inc., 2012 SCC 52

Making Sense of Transfer Pricing

Multinational corporate groups often have entities which are located in various jurisdictions, according to the needs of the business and where different functions of the organization are conducted. In some instances, there is a need to price the products and services provided between the entities (and therefore between jurisdictions) – and this need is often derived from some advantage to performing certain functions in lower tax jurisdictions. For example, some corporations may price products or services at higher rates so that income in higher tax jurisdictions is decreased as a result of higher expense deductions, with these higher amounts being included in revenue of an entity in a lower tax jurisdiction. Some tax planning in this manner is appropriate, and often highly advantageous for competing successfully within our global economy. Transfer pricing rules are designed and in place to address unjustified skewing of profits and revenue toward lower tax jurisdictions.

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