CAM’s Compensation Survey is in the mail to you. It is being sent to all CAM members and van line agents across Canada. We hope to offer results that will provide a representative sample of compensation practices that you, the Canadian mover, will find useable and useful. The survey will bring together confidential information that you would normally not have access to and use the data to produce an analysis of pay rates, commissions, benefits and practices for movers across the country and in your area. To ensure the confidentiality of the data, we are using the services of Pete Pedersen of N.K. Pedersen & Associates to gather and analyze the results.
It’s tax time in Canada and much of the information that you will need for this survey is part of what you gather to submit your taxes and your employees’ T4s. We look forward to providing you with the first-ever Canadian compensation survey results for our industry. Please help by completing the form and returning it promptly. The survey was commissioned and reviewed by a special committee chaired by CAM Board member Graham Acreman.
While so far, it looks like an isolated case, the Ontario Ministry of Finance has issued a proposed assessment to one of our members for failing to collect or remit Ontario Retail Sales Tax (OST) on (i) customer claims for damages and settlements and (ii) valuation premiums. CAM President, David Long, sought professional advice on this issue from one of Canada’s leading tax analysts, Irene David of Ernst & Young.
Customer Damage Claims
With respect to the customer claims, we believe that the auditor’s proposal has absolutely no support under the OST regime. Briefly, the auditor is alleging that when a moving company gives a customer an amount to reimburse them for lost or damaged items this is considered a sale and the moving company is responsible for remitting 8% OST on the amount given to the customer. Our advisors, Ernst & Young, have indicated that the legislation that imposes the OST does not tax such damage reimbursements. Additionally, from a common-sense perspective, the auditor should have recognized the fact that the moving company already paid OST to the firm who repaired or replaced the goods.
Concerning the charges for valuation, the auditor is claiming that these are insurance premiums and as such the moving company is making a charge for insurance and should be collecting OST on the charge. While the auditor is correct that charges for insurance are taxable, they are only taxable where they are actually insurance premiums. If all the moving company is doing is making a separate charge for insurance costs that they incurred under their general master policy, then the amounts are not insurance and are not taxable. However, if the moving company’s customers are separately named under the insurance policy then perhaps the charges are flow-throughs of insurance premiums. Regardless, if Ontario pursues this avenue, then the moving company may be eligible to purchase the specific insurance on an OST exempt basis. To determine whether the charges are taxable or not, it will be necessary to review specific situations including insurance policies and contracts.
In the event that any members are faced with these issues, they may wish to contact Irene David at Ernst & Young in Toronto at (416) 943-3062. It will be up to each individual member to enter into their own fee arrangements with Ernst & Young.
CAM congratulates Tippet-Richardson on its 75 years in the moving industry. T-R was founded in 1927 by Basil Tippet and C.A. Richardson in Toronto, and now has branches across Canada in Vancouver, Calgary, Windsor, London, Toronto, Ottawa and Montreal.
Annual Golf Tournament
CAM’s Annual Golf Tournament is scheduled for September 17, 2002, at the Cardinal Golf Club.
2002 Annual Conference
The Annual Conference is scheduled for November 25–26, 2002 (not November 18–19 as previously announced). Please let us know if you have any suggestions for appropriate speakers or programs.
The Spring/Summer 2002 issue of The Canadian Mover has gone to press and will be mailed to you in mid-April.