Investors and Capital Gains

Investor applicants for permanent residence take note: section 128.1 of the Canada Income Tax Act can provide substantial tax relief but it can also cause tax headaches once you become resident in Canada.

Section 128.1 deems a new resident to have disposed of (and re-acquired) all capital assets at fair market value. The accountants among you will immediately recognize the benefit here. Any assets that had accumulated an unrealized capital gain now have a new cost base equal to the fair market value at time of residence. This is a significant benefit: unrealized gains do not have to be realized in Canada, as their cost base is "stepped up" to fair market value.

The downside of course is that loss properties will not necessarily generate capital losses (which can offset gains). A loss property (i.e., an asset that has decreased in value since purchase) will also be "stepped up" to fair market value. At the time of sale, no losses will be generated, and likely a gain will be realized and taxable.

Bottom line? Investors should have all assets properly valued just before establishing residency in Canada. In addition, investors should dispose of loss properties before establishing residency. This loss may be able to be carried forward in the investor's home country to offset any future gains in that country for which the investor may be liable for tax.

No Work Permit Required

Every year, thousands of foreign nationals work in Canada without a work permit. Below I've identified a list of circumstances when an individual can work in Canada without first obtaining a work permit (subject to any medical or criminal issues), depending on his or her activities in Canada. As always it is always a good idea to get legal advice that is specific to your situation:

Volunteers

If a foreign national in Canada engages in an activity and is not paid wages or commissions, he or she is not considered to be "working" in Canada and no work permit is required.

However, if an unpaid foreign national engages in activities that are in direct competition with activities of Canadian citizens or permanent residents in the labour market, this is considered to be "work" and a work permit would be required. For example, if a foreign national engaged in an activity that would normally be a paid position for a Canadian citizen, then a work permit would be required.

The courts have held that visitors who occasionally help out relatives at their place of business over a short period of time are not usually engaging in work, whereas regular attendance at a workplace over a longer period of time can be considered "work" for which a permit is required.

Business Visitors

A range of business visitors are permitted to work in Canada without a work permit, however, every business visitor must receive his or her pay from outside Canada, and the principal place of business and profits must remain predominantly outside Canada:

(a) Buyers

Individuals in Canada for the sole purpose of purchasing Canadian goods or services for a foreign business or government, or receiving training or familiarization in respect of such goods or services do not require a work permit.

(b) Trainees or Trainers

Individuals in Canada to provide familiarization or training services of installation of specialized equipment purchased or leased outside Canada. Also included are intra-company trainers and trainees. Such training does not include "hands-on" training, but only classroom training.

(c) Sellers

Individuals who represent and sell goods (not services) for a foreign business or government are exempt from obtaining a work permit, provided that they do not sell to the general public in Canada. Generally, individuals under this exemption sell to wholesalers, retailers and institutional buyers.

Military Personnel

Military personnel of foreign armed forces (along with civilians who are also a part of the armed forces) do not require work permits, so long as they are from a country that is designated under the Visiting Forces Act.

Government Exchanges

Officers of foreign governments who work for a federal or provincial agency pursuant to a formal government exchange agreement do not require a work permit.

Full-Time University or College Students

A foreign national student studying in Canada at a university or college under a valid study permit can work on the campus where they are studying for the duration of their study permit.

Performing Artists

Performing artists, groups, and staff members can perform in Canada without a work permit for a performance other than one that is primarily for film, television or radio. In addition, the performers must be part of a foreign production or guests in a Canadian production in a time-limited engagement and not in a employed by a Canadian contractor. No performance in a bar, restaurant or similar establishment is permitted under this exception.

Athletes and Coaches

Athletes and coaches with foreign-based teams can compete in Canada without a work permit. However, professional and semi-professional members working for Canadian-based teams require permits, but the HRSDC confirmation is often waived.

News Reporters and Crews

An employee of a foreign news company who is in Canada for the purpose of reporting on events in Canada does not need a work permit. Although crew members are covered by this exemption, managers and clerical staff are not (the latter two requiring a work permit).

Public Speakers

Individuals coming to Canada for the sole purpose of making a speech or delivering a paper at a function which may include colleges or commercial events or seminars lasting no longer than 5 days do not require a permit.

Convention Organizers and Support Staff

Executive members and administrative staff of an organizing committee for a convention or meeting in Canada do not need a work permit for this function.

Clergy

People working for a spiritual congregation and responsible for assisting a congregation in the achievement of its spiritual goals, and whose main duties are to preach, perform functions related to the gathering, or provide spiritual counseling. Any work regarding management or finance of a congregation would require a work permit. In addition, an individual who wishes to take advantage of this exemption must provide proof that that are assuming spiritual duties, and that the congregation will be responsible for financial needs during his or her stay.

Judges or Referees

Judges, referees, and similar officials do not require a work permit to officiate at international events hosted by a Canadian organization such as amateur sports, cultural, animal or agricultural competitions.

Academic Examiners

Examiners or evaluators of research proposals, academic projects, or university theses do not require a work permit to perform these functions.

Expert Witnesses

Individuals in Canada to conduct surveys or analysis or to testify for the purpose of an administrative or judicial hearing are exempt from a work permit requirement. However, such individuals would have to be expert in their field where no Canadian experts are available. Like most exemptions, this exemption does not permit these individuals to engage in other sort of work in Canada.

Medical Students

Medical students can work without a work permit at a medical teaching institution in order to obtain training, but only if approved by the relevant medical regulatory body.

Aviation Personnel

Civil aviation inspectors are exempt from obtaining a work permit while inspecting a commercial air carrier operating international flights.

Aviation accident investigators are exempt from obtaining a work permit while participating in an investigation under the Canadian Transportation Accident Investigation and Safety Board Act.

Crew members of foreign airlines are exempt from obtaining a work permit if they are predominantly engaged in the international transport of cargo or passengers.

Crew Members of Foreign-Owned Transportation Companies

Crew members of foreign-owned transportation companies are also exempt from obtaining a work permit if they are predominantly engaged in the international transport of cargo or passengers, but does not include earth moving equipment, oil rigs, or similar items. In addition, this exemption does not apply if an individual in international transportation picks-up and delivers from one location to another within Canada.

Emergency Services Providers

Individuals providing services for the protection or preservation of life or property are exempt from obtaining a work permit. Typically such services are in response to a major natural or industrial disaster.

Renewal of Work Permit

If an individual is in Canada and his or her work permit expires, he or she can continue to work in Canada only if he or she applied for a new work permit before the old one expired, and only if he or she are still in compliance with all the conditions of his or her expired permit.

NAFTA Business Visitor

The North American Free Trade Agreement allows certain business visitors from the U.S. or Mexico to work in Canada without a work permit. Such business visitors must fall within the definition of Appendix 1603 A.1 of NAFTA and includes activities such as:

-Research and design;
-Growth, manufacture and production;
-Purchasing and production management personnel;
-Marketing;
-Sales;
-Buyers;
-Distribution;
-After-sales service; and
-General service.

Visitor's Visa

Do you need a visitor visa to enter Canada? That depends on your citizenship. If you are a citizen of one of these countries, then you will require a visa prior to entering Canada for a visit or holiday. That means you have to apply for a visitor visa at the Canadian consulate responsible for geographic location before you can come to Canada. You should enquire at the consulate because each one often has different procedures and different document requirements.

Why do people from the above countries require a visitor visa? Simple - history has shown that visitors from these countries tend to stay in Canada after arriving and CIC requires a method for tracking the in flow of people from these countries.

What does the Visa officer consider when considering an application for a visitor visa? The primary question is this: "Is the applicant seeking admission to Canada for a temporary purpose?" In other words, is the applicant a bona fide visitor, or does the applicant have other intentions to remain in Canada after the visitor visa expires?

Generally, an applicant must show that he or she:

- is not criminally or medically inadmissible

- has a valid travel document or passport valid for the length of the visitor visa

- will return to his or her country at the expiry of the visa.

How do you show that you will not overstay your visa in Canada? You should supply as much documentation as you can showing your ties to your country including:

- sufficient funds for your stay in Canada (or a letter from a relative if you are staying with family in Canada stating they will be responsible for your living expenses)

- return airline tickets

- evidence of employment in home country

- proof of assets such as a property or bank accounts

- evidence of family in your country

- any other evidence which helps to show ties to your country

Canada immigration law does recognize a dual-intention to visit and to apply for permanent residency. Such a dual intention will not prevent a visitor visa from being issued, so long as the applicant can convince the Visa officer that he or she will leave Canada once the visitor visa expires.

Nearly all rejected visitor visa applications are rejected because the applicant could not show an ability and willingness to leave Canada once the visa expires, or could not show sufficient funds to support himself or herself once in Canada.

You should always remember that a misrepresentation or failure to disclose material facts could lead to an immediate refusal of a visitor visa and remaining inadmissible to Canada for the following 2 years.

Canada Gets Top Marks

Here's an interesting article from the Globe and Mail that reports Canada to be the #2 place in the world in which to live and do business, according to a survey of country reputations around the world:

A great place to do business

By CAROLINE ALPHONSO
Monday, August 1, 2005 Updated at 9:30 PM EDT
From Tuesday's Globe and Mail

We're No. 2! We're No. 2!

Canada has elbowed its way in front of Britain and the United States as one of the world's best places to invest and live, according to a survey of 25 countries' brand reputations released Monday.

But despite its top marks over all, the country didn't fare well in the culture category.
Indeed, the survey showed that popular icons, such as Sarah McLachlan, or even the game of hockey, are doing little to bolster people's perceptions of Canada's culture and heritage.
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The Anholt-GMI Nation Brands Index, an analytical ranking of the world's nation brands, placed Canada just behind Australia in terms of brand power.

The group's second quarterly report surveyed 10,000 people on their perceptions of a country's cultural, political and tourist appeal, as well as investment potential.

Canada, a new country in the survey, bumped Britain out of the second place.

It was the second choice among countries for investment, immigration, people and governance, and third in the tourism category.

“The value that Canada communicates or is believed to embody are the values that most people subscribe to in the world today,” Simon Anholt, co-author of the survey and a nation brand expert, said in an interview from London.

“They think it's the second most attractive nation brand in the world, which means right across the spectrum of business, livability and landscape,” he added. “It's second only to paradise, and paradise appears to be Australia.”

The survey found that unlike the United States, which ranked 11th, Canada's government is seen as neutral.

But a large part of the world's perceptions of Canada was attributed to how people feel about Canadians.

The survey ranked Canada second in the hospitality category, just behind Australia.
While there are no awards that come with this ranking, Mr. Anholt said that it is now up to Canada to capitalize on this international admiration.

A positive nation brand, he said, has a direct impact on selling products and influencing government.

“Canada could be playing a much more significant role in world affairs on many, many fronts,” Mr. Anholt said.

He added: “It's a demonstration of market potential. What [the survey] points to is that there is the potential, the goodwill on the part of consumers around the world to buy a lot of stuff from Canada.”

Mr. Anholt said, however, he was not surprised to see Canada receive a low ranking in the culture category.

Canada ranked 18th in the area of culture and heritage. Mr. Anholt said the culture and heritage of a lot of Western countries is not recognized.

And while other countries, such as Egypt and Turkey, received top marks for culture, they did “miserably” in other areas, Mr. Anholt said.

The survey was conducted in partnership with Seattle-based Global Market Insite Inc.
Mr. Anholt said that unlike other surveys on branding, this one looks at people's perceptions of a country in a variety of areas.

Consumers in the United States, Britain, India, Germany, South Korea, Canada, France, Japan, Denmark and China were polled.

The first survey, released in May, 2005, included only 11 countries

Former Refugee Appointed Governor General

There is no doubt that Canada offers ambitious immigrants endless opportunities for success. This is clearly illustrated by the fact that Michaëlle Jean - who fled Haiti in 1968 with her family to land in Canada - has been appointed by the Prime Minister of Canada as Governor General (the Queen's representative and effectively the head of state).

There are few (if any) other countries in the world that can offer a refugee the chance to become head of state. I've included this great CBC article for more information.

Michaëlle Jean named Governor General
Last updated Aug 4 2005 08:13 AM EDT CBC News

Prime Minister Paul Martin officially named journalist Michaëlle Jean Canada's next governor general on Thursday.

Michaëlle Jean (CBC photo)Jean will be installed as Canada's 27th governor general Oct. 1.
INDEPTH: Governor General At just 48 years old, the award-winning journalist will become one of the youngest governors general ever, the third woman in the job and the first black person to call Rideau Hall home.

Jean's name surfaced after weeks of rumours about who would be replacing the current Gov. Gen. Adrienne Clarkson, who took up the post in 1999 and who is stepping down this fall.
A source close to the governor general selection process told CBC News "Canadians will fall in love with this woman. Her story, her nature and her character are nothing short of inspirational."

Jean is probably best known to English-Canadians as the host of The Passionate Eye and Rough Cuts on CBC Newsworld.

She was born in Port-au-Prince, Haiti. She left in 1968, her family fleeing the oppressive regime of François "Papa Doc" Duvalier, settling in Quebec with her family. She has a six-year-old daughter and is fluent in five languages: French, English, Spanish, Italian and Haitian Creole.
Her television career was launched in Quebec, where she has worked as a journalist, producer and host for the CBC's French language services, SRC and RDI, since 1988.

She has worked as a correspondent for Le Point, hosted Le Monde ce soir, L'Edition quebecoise, Horizons francophones, le Journal RDI and RDI à l'écoute. Currently she is host of the French-language documentary series Grands Reportages.

In an interview with CBC Radio in 2001, Jean spoke of how she sees her role in the public eye, especially as a role model for children.

"Being a black journalist on TV, for many black children and Asian children and, I say, even native children' it's a symbol because when they see me they say, 'OK, something is possible,'" she said.

Jean has received many awards for her own documentary work, including the Amnesty International Journalism Award, the Anik Prize and the Galaxi Award for best information program host.

"It's obviously a very exciting appointment. Here's someone who's quite young, very dynamic, has a rapport with a lot of younger audience," said Paul Benoit, of the Monarchist League of Canada.

Historian David Mitchell says Jean will play an important role, at a critical time in Canada's history.

"She will be a voice for Canada in Quebec and she will represent the new Quebec to the rest of Canada very effectively. She has that potential and that sense, this is an inspired choice."

PEI Wants Immigrants

Here's a good article on Prince Edward Island's plans to attract more people:

Province wants more people
Last updated Jul 11 2005 11:41 AM ADTCBC News

The Binns government is preparing a strategy to encourage a 1.5-per-cent annual increase in the number of people living on the Island, partly through more immigration.
Premier Pat Binns said he is worried about a projected decline in Prince Edward Island's population. Falling birth rates mean there will be fewer working-age people in the future.

"The population decline that could potentially happen would have a devastating impact on the province and we must change the course that we are on," says Binns.

"We have to be aggressive about increasing our objectives and bringing more people to the province."

The new population strategy, to be released later this summer, will include plans to convince former Islanders to return home for good and to prevent people living here from leaving.
However, a large part of the plan will focus on bringing more immigrants from foreign countries to the Island.

The government will be looking to attract more people like Ally Kuo and her daughter Theresa, who moved to P.E.I. three years ago and opened the Interlude Café on Kent Street.
P.E.I. wasn't their first choice when they immigrated to Canada from Taiwan five years ago. They started in Vancouver, and then spent some time in Toronto before finally settling in Charlottetown.

Kuo says it's easier to learn English on the Island, because fewer people speak Mandarin, and she believes it's a better place to raise her daughter.

"She's so happy. When I look at her I know this is the right place. We should stay," said Kuo.
Often it's the other way around. Immigrants move to the Island from their home countries, then leave for larger Canadian cities.

Kuo, who immigrated to Canada as a skilled worker and then started her own business, is exactly the kind of person the government would like to attract.

CAIPS

CAIPS (or "Computer Assisted Immigration Processing System") is where all Canadian government notes are kept about your immigration application as soon as you file it. CAIPS includes a wealth of information, including:

- Initial assessment scores
- Missing documentation
- Interview dates
- Visa officer notes and comments
- Concerns or problems with your file

If you have not heard from Citizenship and Immigration Canada in some time and wish to know the status of your file, or if you've been scheduled for an interview, you may wish to obtain your CAIPS notes which will provide insight into the nature of any concerns or problems CIC may have with your application.

However, only someone present in Canada can obtain these for you. In addition, some of the CAIPS codes are hard to decipher. There are a variety of CAIPS services available (I've included my own website as one reference).