PitbLAWg may be AWOL on January 18, 2012.
In a USA Today article “TwitPic, WordPress to go dark for online SOPA protest” Yamiche Alcindor reported that WordPress, along with other websites will not available on Wednesday January 18, 2012 to protest the proposed US legislation, Stop Online Piracy Act and the Protect Intellectual Property Act.
WordPress is the host site for PitbLAWg. If WordPress is not available then PitbLAWg will not be online for the day. However, we expect that WordPress and PitbLAWg with be back up and running on Thursday January 19th.
PitbLAWg takes no position on the proposed legislation or on the blackout. Thanks for following PitbLAWg and we hope to see you back on January 19th.
Voluntary Disclosures Program
Last week the Globe and Mail online had an article by Greg McArthur entitled Tax Officials Find Bonanza of Offshore Income. This is an article on the soaring number of voluntary disclosures made to the Canada Revenue Agency (“CRA”) and one of the possible reasons for this increase. The article does not provide any information on the CRA’s Voluntary Disclosures Program (the “Program”).
Simply put, the Program allows taxpayers to voluntarily come forward and correct previous omissions in their dealings with the CRA. If a voluntary disclosure is made and accepted, the taxpayer will have to pay all outstanding taxes and may have to pay all outstanding interest. The CRA will not apply penalties to the outstanding taxes nor will the CRA seek to prosecute the taxpayer. Depending on the circumstances this may be an excellent option for a taxpayer, however careful consideration must be given before making a request under this Program.
Granting relief under the Program is at the discretion of the Minister of National Revenue or his designate (“Program Officer”). The Program Officer would review the request and decide, based on its merits, whether to grant relief.
For voluntary disclosure to qualify as valid, there are four conditions which must be met:
(a) Voluntary: a disclosure will not qualify as valid if the taxpayer was aware of an audit, investigation or other enforcement actions being conducted against the taxpayer, or a person associated with or related to the taxpayer, including corporations and shareholders.
(b) Complete: the taxpayer must provide full and accurate facts and documentation for all taxation years or reporting periods where there was previously inaccurate, incomplete or unreported information relating to any and all tax accounts the Taxpayer is associated with.
(c) Penalty: the disclosure must involve an application, or potential application of a penalty.
(d) One Year Past Due: the disclosure must include information that is at least one year past due.
If relief is not granted, the disclosed information (the “Information”) would be referred to another area of the CRA. The Information may also lead to an investigation and prosecution.
To take advantage of the Program, a taxpayer must disclose their name. Given that if your request is denied, the information you provided may lead to an assessment or reassessment, penalties, interest and possibly prosecution, you may want to consider initially having your authorized representative making a no-name disclosure on your behalf. Under this option the decision of the Program Officer is non-binding upon the CRA, however it does allow the taxpayer to see if the Information would qualify. Only once the taxpayer’s authorized representative provides the taxpayer’s name would the Program Officer issue their final decision.
Just before posting this I read an excellent article on point in the Lawyer’s Weekly by Adrienne Woodyard and David Nathanson: Voluntary Disclosure : How taxpayers with money offshore can come clean. You might want to check it out.
Commercial Credit for On-Reserve First Nations Peoples
S. 89 of the Indian Act (the “Act”) holds that with certain exceptions, the real and personal property of First Nations people and First Nations situated on a reserve, cannot be pledged, mortgaged, attached or seized.
However, in Tribal-Wi-Chi-Way-Win Capital Corp. v. Stevenson et al., 2009 MBCA 72, the Manitoba Court of Appeal ruled that, in commercial transactions, a First Nations person or a First Nation can sign a waiver that would allow a creditor to seize collateral which is situated on a reserve. This decision can be seen as a win-win for both creditors and First Nations people on reserve. By signing a waiver and allowing creditors to secure their loan, on-reserve First Nations people and First Nations will be able to gain access to credit to start or grow a business.
It is important to note that the parties involved in Tribal-Wi-Chi-Way-Win Capital Corp. v. Stevenson gave informed consent when they signed the waiver. The waiver in this case was signed by Mr. Stevenson in his personal capacity. Further there was an acknowledgment and agreement to honour the waiver signed by Mr. Stevenson in his capacity as Chief of Peguis First Nation, as well as three Peguis councillors.
The courts in the past have drawn a distinction between First Nations people purchasing personal property and First Nations people and First Nations in commercial transactions (for example, see the Supreme Court of Canada’s decision in Mitchell v. Peguis Indian Band et al., [1990] 2 S.C.R 85). The Supreme Court of Canada in McDiarmid Lumber Ltd. v. God’s Lake First Nation, [2006] 2 S.C.R. 846, however, held that provincial credit regimes are an important part of the economy in Canada and that access to credit is very important. The Court also stated that the provincial credit regimes create significant and enforceable rights between the creditors and debtors who are governed by them which allow creditors to take considered risks when extending credit.
Given the importance of the provincial credit regimes, it is possible that one day, the reasons behind the decision in Tribal-Wi-Chi-Way-Win Capital Corp. v. Stevenson could be extended to cover personal loans, provided there are sufficient safeguards in place to ensure that the First Nations people involved give informed consent when signing the waiver. Just to be clear, this is not currently the law in Canada.
Common Law Duty Regarding Competition with Former Employer
If you are starting up a business which may compete with your former employer, you need to consider what duty you may owe to that former employer. Essentially nothing in law prevents an employee from competing with or soliciting customers from his former employer, unless a non-competition non-solicitation agreement is in place, or he is subject to a fiduciary duty.
Employees deemed to be fiduciaries may be subject to a duty not to directly solicit their former employer’s customers. Typically fiduciary relationships are restricted to executives at the top level of the organizational hierarchy who have the responsibility and authority to make decisions about the fundamentals of the firm. Nevertheless, even low or middle managers may be characterized as fiduciaries if their knowledge and experience makes the employer extremely vulnerable to competition by the employee in question after his/her employment ceases. By way of example, see Hudson Bay Co. v. McClockin (1986), 42 Man R. (2d) 283 (Q.B.). In this decision, the manager of the hearing aid department within the Hudson Bay store was deemed to be a fiduciary based on the fact that he managed and controlled the department. The Court found that he was key to the functioning of his department.
It may be said that the Hudson Bay case marked the high water of who would be deemed a fiduciary. The Court seemed to have pulled back slightly from that mark of making a mere department manager a fiduciary. However, lower and mid managers, along with certain employees where they are deemed to be the whole show or the face of the company, have been deemed to be key employees and saddled with a fiduciary duty to their former employer.
Absent of fiduciary duty, employees still owe a common law duty of fidelity, or loyalty, to the former employer. The duty that these employees owe to their employers is significantly lower than that owed by fiduciaries and is generally restricted to unfair competition, such as taking client lists to be used in their new business.
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Authors
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Mark Wallace
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Philip Watts
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Brant Harvey
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Caroline Kiva
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Adam Herstein
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Andrew Buck
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Benjamin Hecht
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Bradley Madison
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Rob Giesbrecht
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Ned Brown
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Candace Everard Grammond
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Lori Dobbie
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Darryl Antel
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Andrew Ogaranko
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Michael Puchniak
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Bill Gardner
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Tracey Epp
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Richard Buchwald
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Ron Greasley
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Administrator
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Douglas G. Ward, Q.C.
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Brian Bowman
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Courtney Chambers
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Bruce King
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newmandavidg
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