Million Dollar Roundtable
From left to right: Ravinder Minhas, Manjit Minhas, Jennifer Carter, Rich Kruger
On November 6, 2017, Michael and Heather Culbert together with Larry and Gloria Macdonald, co-hosted the annual Million Dollar Roundtable event at the Calgary Petroleum Club.
More than 30 Members joined our Campaign Co-Chairs, Manjit Minhas and Rich Kruger, for an evening buzzing with good energy and festive spirit. A major cause for celebration was the addition of eight new Million Dollar Roundtable Members for the 2017 Annual Campaign. This brings the total number of Members to 63! This exceptional group has collectively contributed an amazing $130,805,330 throughout their lifetimes.
Further cause for celebration was the exciting announcement that Banff has been chosen to host the 2018 Worldwide Million Dollar Roundtable event from October 1- October 3 at the Banff Springs. This is a fantastic networking opportunity for all of our Members and we are so thrilled to have a leading role in this event being hosted so close to Calgary.
United for Life
Planned giving with life insurance may give you the emotional satisfaction of creating a legacy of support to United Way. Policies of many kinds offer unique tax and philanthropic advantages, including the option of donating an existing policy, even when premiums might still be owing.
A recent Globe and Mail article outlined the benefits to both charities and policyholders when individuals donate an existing policy they no longer need to a charity of choice. Read the full article here.
If you have a policy you no longer need or want, you may be eligible to receive a tax receipt for the fair market value of your policy when donated to United Way, plus tax receipts for any future premium payments you owe on the policy. You will also receive lifetime recognition as a United Way Promise Donor. It is an excellent way to achieve both your tax and philanthropy goals.
The following example will help you better understand the advantages of planned giving:
In 2017, Emily donates a policy to United Way that she has owned for ten years. It has a face value of $100,000 and a policy value of $7,500. Emily agrees to make future payments to cover the $1,800 annual premium. In 2017, United Way provides Emily with a tax receipt for $7,500, and from 2018 forward, Emily receives an additional receipt for $1,800 each year she pays the premium.
Emily is recognized annually for her premium payment, and receives lifetime recognition as a Promise Donor for her future legacy gift.
A qualified advisor can help you take advantage of the tax savings that accompany a gift like this. Our Planned Giving Officer Erika Scott would also be pleased to review some of the options with you, please contact her at or by phone at 403-231-6444.
Heather and Michael Culbert: Our Family Fund is Helping Us See Our Values Come Alive
In 2016, Heather and Michael Culbert established the Culbert Family Fund. The Culberts are long-time supporters and advocates for Calgary’s millennials, particularly through United Way’s Gen Next program. Supporting young Calgarians to develop the skills and knowledge they need to become the next philanthropic leaders in our city motivated the Culberts to envision the multi-generational legacy they want to achieve with their children, Lindsay and Sean.
“Philanthropy has always been important to us, and over time we have been involving our kids in our charitable giving,” says Heather. “We wanted to do something long term that we knew would make a real difference, and that we could do together as a family. By including our children in the work we are doing in the community and by involving them in making decisions about the causes we support, as a family we are building a legacy across generations. Ensuring our community has the supports needed today and into the future is why we chose to create the Culbert Family Fund. It’s also why we choose to partner with United Way. United Way provided us with the flexibility to create a fund that helps us meet our goals in the community, and ensures that our gifts are managed efficiently. Together, we identify the greatest needs and opportunities to invest in the community, rigorously evaluate the impact of our gifts, and facilitate donations on our behalf to other organizations we support in health and education. Our partnership with United Way ensures we can focus on what matters to us: the impact of our charitable investments, supporting our community and ensuring our family is a part of the decision making process.”
A Family Fund at United Way of Calgary and Area gives your family the opportunity to customize and advise on your Tomorrow Fund investment. A Family Fund at United Way allows you to create a family gift plan to help you give now, with immediate tax savings and the same funding flexibility as a private foundation. If you are thinking about how you can plan today to support causes important to you over time or looking to build a family legacy, ask us how working with United Way can help you accomplish all your charitable goals.
Making M.O.R.E. of a difference with our life insurance policy
"We have always been passionate about supporting worthy causes, especially around early learning, prevention, and financial stability. As long term contributors to United Way of Calgary and Area, we wanted to find additional ways to support the organization that serves our community so well. After careful examination, we decided to include United Way in our estate plan by purchasing a life insurance policy dedicated to the Tomorrow Fund.
This was our way of contributing to our great city, ensuring that our support for United Way will continue long term, and that our gift will make a difference in our community for years to come."
- Carol and Nolan Blades, Tomorrow Fund Promise Donors
Use life insurance to multiply the impact of your donation, and create a gift for tomorrow.
When the original purpose for a life insurance policy no longer applies—you’ve already assured your future financial stability through other means —your policy can become a powerful and simple way to support work in the community.
With M.O.R.E tax benefit options and recognition opportunities, you can leave your forever mark on our city.
4 different ways you can give M.O.R.E:
- MAKE United Way the owner of a paid up policy you no longer need
- OFFER United Way to assume your policy benefits and premiums
- REVISE an existing policy with United Way as beneficiary
- ESTABLISH a new policy with United Way as owner and beneficiary
- Attend our upcoming Estate Planning Seminar and learn more about gifts of life insurance.
- Contact Erika Scott for more information.
Erika Scott, Planned Giving Officer
United Way of Calgary and Area
Community Hubs Initiative Launched!
What an exciting summer!
On June 26th, we signed a Partnership Agreement with The City of Calgary and Rotary; then formally celebrated our partnership with the launch of Community Hubs.
Four hundred people representing the community and partners joined us as we officially launched this important initiative.
Indigenous drummers opened and closed our formal media ceremony which included Mayor Nenshi, Rotary’s District Governor Neil Berg, United Way’s President and CEO Karen Young, and our emcee from Calgary Neighbourhoods, Katie Black. You can read the media release that was issued for the event here.
The media program was followed by a community celebration featuring a free barbecue sponsored by Rotary, live music, kids activities, storytelling stations from various Hub sites, and live graphic recording capturing residents thoughts on what community means to them. You can view some of the comments on hashtag #yycHubs which trended in Calgary for over two hours during the event.
The diversity of the community members who came to celebrate with us was wonderful to see – kids and youth, team members from the Calgary Rebels Football Club, agency partners, members from various ethno-cultural communities, and a number of folks with developmental disabilities who spend a lot of time at Village Square and were delighted to be included in the festivities.
The launch was a true display of partnership and community. We had great representation from our Board, our donors, a number of elected officials, and our staff teams. Thanks to all who made time to celebrate this significant milestone with us!
Metro article: Six community hubs set to open in Calgary
Register to learn more about Community Hubs at the President’s Breakfast on September 26.
Why you should become a WLC member
As a Major Donor, you have the opportunity to become a member of the Women’s Leadership Council (WLC). The WLC is a strong network of female donors that engage together on social issues impacting Calgarians. The WLC provides meaningful opportunities for women to connect with each other and their communities as philanthropists, volunteers, and as leaders. Membership is open to individuals who contribute $1,200 or more annually to United Way of Calgary and Area.
- Participate in exclusive educational, networking, and volunteer opportunities.
- Learn about social issues impacting women.
- Share and learn from women’s leadership success stories.
- Recognition as a WLC member in United Way’s annual Honour Roll publication.
In March, the WLC hosted Afternoon Tea with special guest Manjit Minhas, entrepreneur, 2017 United Way Campaign Co-Chair, and Dragon from CBC’s Dragon’s Den. The event focused on women in male dominated industries and how they strike a balance between career and family life.
In June, the WLC hosted a panel discussion and networking event. More than 100 members of the WLC attended the panel focused on women and poverty. Panelists included Kim Ruse of the Calgary Women’s Emergency Shelter, Elsbeth Mehrer of YWCA Calgary, and United Way COO Beth Gignac.
Members will come together again in September and early October to lend a hand in the community through several volunteer opportunities. They will also be invited to attend a “Disruptive Dialogue” – an intimate gathering for conversation and perspective on social inclusion on October 25th.
Click here to register as a member of the Women’s Leadership Council or contact us at 403-410-2571.
Private Company Federal Tax Reform – The Big Change
As a Major Donor, proposed measures around private company federal tax reform may impact you. The following has been prepared by our partners at EY to provide a summary of these new measures and their implications:
On 18 July 2017, federal Finance Minister Bill Morneau introduced draft legislation, explanatory notes, and a consultation paper (“the proposal documents”) proposing to fundamentally overhaul the system of taxation for private companies, their shareholders, and family members.
These proposed measures represent the most significant amendment to the taxation of private corporations in Canada since the 1972 tax reform. If enacted, these proposals would generally have broad application including an increased income tax burden on distributions of income among family members, passive income earned on undistributed active business earnings, and the proceeds from the disposition of private corporation shares.
Many of the proposed measures may not extend to public companies or foreign-controlled private businesses.
The measures discussed in the proposal documents are intended to target three specific areas:
Sprinkling of income using private corporations – The government has released detailed draft legislative proposals, generally effective for 2018 and later taxation years, to limit income sprinkling to family members receiving ”reasonable” compensation from a private corporation. If the new rules are enacted as proposed some long accepted tax planning may no longer be effective, including access to the lifetime capital gains exemption (LCGE).
Income sprinkling has been one of the advantages of incorporation. If properly structured, under the current rules, business income may be payed-out by dividends to family members who have relatively lower income and therefore subject to lower marginal tax rates. Existing legislation is already in place to tax dividend payments to minor children at the highest marginal tax rate and to limit the ability to transfer investment-type income to a spouse. These rules are referred to as “kiddie tax” and “attribution”. Other existing legislation also places “reasonableness” requirements on excessive salaries paid by corporations.
The draft legislation that has been introduced expands the income sprinkling and the attribution rules. The sprinkling proposals expand the kiddie tax to include children over 18 or related adult individuals by taxing such payments at the highest marginal tax rate unless certain “reasonableness” tests are met. The determination of reasonable will depend on the age of the individual (more restrictive for those between the age of 18-24) and what contribution (financial or otherwise) has been made by any related individual to a private corporation. The reasonableness test is subjective and the draft legislation proposes that following factors must be taken into consideration:
- the extent of the individual’s labour contributions to the source business prior to the amount being paid or becoming payable (e.g., looking at the quantity of work performed and arm’s length comparables for similar work);
- the assets contributed by the individual, directly or indirectly, in support of the source business;
- the risks assumed by the individual in respect of the source business; and
- the total of all amounts that were previously paid or that became payable, directly or indirectly, by any person or partnership to or for the benefit of the individual in respect of the business.
The draft legislation also limits access to the LCGE. The LCGE will no longer be available on gains accruing in years while the individual as under 18 and/or if the gain realized by an individual is greater than the reasonable value of services or capital provided to the corporation by the individual. Further, the LCGE will no longer be available on capital gains incurred by a family trust and allocated to the beneficiaries. Certain transitional rules can apply, however those transitional rules may cause additional tax costs and risks.
The draft legislation is highly complex and proposed to be effective for the 2018 calendar year. Many family succession planning matters and corporate governance over a family’s assets may be effected. Accordingly, current corporate structures and uses of trusts should be discussed with your advisor.
Holding a passive investment portfolio inside a private corporation – The government is seeking input on possible measures to “neutralize” the tax advantage of investing undistributed earnings from an active business using a private corporation.
Today, private corporations may reinvest their after-tax active business earnings in the corporation that generated the earnings, or distribute such earnings to a holding company shareholder. The latter approach is often used for commercially prudent investing to mitigate assets exposed to business risks.
The perceived advantage results from the fact that corporate income tax rates on active business income are generally lower than personal income tax rates, thereby allowing a greater amount of undistributed earnings to be invested in a passive portfolio. Canadian-controlled private corporations’ passive investment earnings (i.e., not relating to an active business) are taxed at high rates that approximate personal tax rates. When these passive earnings are distributed and taxed in the hands of individual shareholders, the corporation receives a refund of tax approximately equal to what the shareholder pays in dividend tax. The refundable tax mechanism ensures that the overall passive investment income is not double taxed and that an individual is generally indifferent to earning passive investment income directly, or through a corporation.
The proposal documents outline the government’s view that the deferral of tax associated with corporate reinvestment by private companies, namely that a corporation has (on a temporary basis) additional funds to reinvest, is a perceived to be an unfair tax advantage not available to unincorporated individuals. The government has therefore proposed to increase the tax on corporate “passive investments” to level the playing field where such investments are funded from after-tax active business earnings.
The proposals on corporate investment taxation are subject to public input and comment, and draft legislation was not released in this regard. Significant uncertainty remains on how the proposals may be implemented, and what final form will result. While potential tax planning opportunities may remain or be prudent through the transitional period, their effectiveness may be contingent on the final proposed legislation. The proposal documents outline that a transition period would be provided, once the final rules are proposed. No specific timeframe for implementation of the eventual draft legislation was outlined in the proposal documents.
Conversion of a private corporation’s regular income or dividend distributions into capital gains – The government has released detailed anti-avoidance draft legislative proposals, effective on 18 July 2017, intended to prevent a private corporation’s surplus income from being converted into a capital gain. Since taxable dividends and salary are taxed at a higher personal income tax rate than capital gains, a tax benefit may be obtained by the implementation of certain planning to convert corporate surplus into capital gains.
Due to the broad interpretive nature of this draft legislation, the new anti-avoidance rule may apply to seemingly benign commercial transactions, certain transactions that occurred any time prior to 18 July 2017, and estate planning. Any proposed transaction involving a private company and its shareholders should consider these new anti-avoidance proposals.
Family businesses, professionals, and other private business will be significantly affected by all these proposals. Individuals that own private corporations should discuss these proposals with their advisors. The Department of Finance is seeking input on its proposals until 2 October, 2017. Input sought includes any comments on how these rules may affect genders differently.
Hear more from Dean and Tom at the Estate Planning Seminar on September 27.
Dean Radomsky Private Client Services tax partner with EY, Calgary and Tom Flaig Senior Manager Private Client Services EY, Calgary.