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Feds quietly paid $75M settlement for Lac Megantic victims and to avoid lawsuits

By Andy Blatchford

THE CANADIAN PRESS

OTTAWA _ The federal government quietly spent $75 million to settle with victims and creditors affected by the Lac-Megantic rail disaster  a contribution that also shielded it from lawsuits related to the deadly crash.

Former transport minister Lisa Raitt said the deal, which involved 24 other defendants who settled, was under negotiation before her Conservatives lost the October election to the Liberals.

The Liberals have refused to reveal how much the government gave to the $460-million settlement fund, even though at least two parties accused of wrongdoing in the deadly Quebec derailment disclosed their contributions.

But in a recent interview Raitt said the amount was public.

She said it was included in Transport Canada’s supplementary estimates as well as in its quarterly financial report under “out-of-court settlement.” The amount listed is $75 million.

Last week, Transport Minister Marc Garneau said the figure was “classified” when asked how much taxpayer money the government set aside for the settlement.

Garneau also reiterated Ottawa’s denial under both the Liberals and the Tories that it had any legal responsibility for the 2013 oil- train accident that killed 47 people and levelled part of Lac-Megantic.

“We don’t acknowledge that we had any responsibility; however, we did want to make a contribution because of the impact of this terrible tragedy in Lac-Megantic,” Garneau said last week.

Raitt agreed that the government’s main goal behind the settlement was to speed up the process.

“The motivation was simple: this was an opportunity to get money to the victims for wrongful death in a shorter period of time through the U.S. bankruptcy proceedings as opposed to a long, drawn-out, litigious court case,” Raitt said in a recent interview.

The government’s decision to settle may have also been made to avoid the cost of fighting the allegations in court. It would have faced numerous lawsuits related to the derailment on both sides of the border, said the U.S.-based bankruptcy trustee for the company at the centre of the crash Montreal, Maine & Atlantic Railway.

Robert Keach has also said that, contractually speaking, the arrangement explicitly stated the settling parties were not acknowledging any liability with their contributions.

The Transportation Safety Board’s 2014 report on the crash said Transport Canada failed to recognize that the railway had urgent safety problems and was not following the rules. It also said the department failed to audit safety procedures at MM&A and didn’t conduct enough inspections.

Raitt responded to the TSB report at the time by saying the government’s role was to put the rules in place. The companies, the Conservative minister added, were expected to follow those regulations something she said MM&A did not do.

In the recent interview, Raitt reiterated the position that the rules weren’t respected.

“We don’t believe we are liable and it’s not an admission of liability,” said Raitt, who added she would have publicly disclosed the government’s settlement contribution.

Irving Oil has announced it had contributed $75 million to the fund. The train was transporting crude oil to Irving’s refinery in Saint John, N.B.

World Fuel Services Corp., the U.S. company that owned the oil aboard the train, announced a few months later that it provided US$110 million toward the settlement.

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What is National Day of Mourning?

Observed annually on April 28th, the National Day of Mourning commemorates workers who have been injured, killed or suffer illness as a result of occupational accidents and hazards.

This day of observance was instituted upon the passing into legislation of the Workers Mourning Day Act in December 1990. Since that time, various events are organized each year by labour organizations across the country to express remembrance for the family, friends and colleagues who have suffered in carrying out workplace duties.

Since the first National Day of Mourning, there have been many improvements made to occupational health and safety legislation. However, the statistics show that there is more work to be done.

Facts

Nearly 1,000 (977) Canadians died in 2012 as a result of work-related causes. This means that on average, almost 3 workers were killed every day. Approximately 250,000 work-related injuries and illnesses that were accepted for compensation by a workers’ compensation authority and resulted in   time-away from work were reported in 2012.

In addition to the human suffering caused by workplace accidents, the economic costs are excessive. The total cost of injuries and illnesses to the Canadian economy is estimated to be more than $19 billion a year.

The National Day of Mourning focuses our attention on these tragic statistics and reminds us that there is more work to be done in the area of workplace health and safety.

The Government of Canada is committed to continually improving the work environment of Canadians, and responding to the ever changing needs of Canadian workers.

Federal-Provincial-Territorial Ministers responsible for Labour have pledged to work together towards fostering safe and healthy workplaces.

For more information on prevention of workplace accidents please consult the following publications:

Cross-Border Insurance Coverage – Don’t Miss April 30 Deadline for 10% Excise Tax

Cross-Border Insurance Coverage – Don’t Miss April 30 Deadline for 10% Excise Tax

Canadian Tax Adviser | KPMG

Some businesses are required to pay, by April 30, 2016, a federal tax of 10% of net premiums paid or payable if they’ve purchased insurance coverage outside Canada or were covered under a global insurance policy acquired by a parent company in 2015. Generally, the federal tax applies where the business or individual purchases coverage for risks in Canada directly, or where the coverage is obtained on their behalf by a third party. This tax could also apply where a business has insurance coverage with an insurer licensed in Canada but the broker or agent is outside Canada

These businesses and individuals may also be required to self-assess provincial taxes and levies on cross-border insurance coverage or multi-provincial insurance coverage. These provincial taxes and levies have specific rules and deadlines that are different from the ones that apply for the 10% federal tax.

April 30 deadline for 10% federal tax

The Excise Tax Act  requires a person resident in Canada, who enters into an insurance contract (or on whose behalf such a contract is entered into) against risk within Canada with an insurer that is not authorized under the laws of Canada or any province to transact the business of insurance, to pay a 10% tax on the net premiums paid or payable during the preceding calendar year. This rule also apply to a non-resident corporation carrying on business in Canada. For example, a corporation in Canada may be liable to pay the tax where the parent company acquired global insurance outside of Canada on behalf of the entire corporate group. Affected taxpayers must remit the 10% tax to the CRA by April 30

A business may also be required to self-assess the 10% tax on insurance premiums related to an insurance contract that is entered (or entered into on its behalf) through a broker or agent outside Canada with an insurer in Canada.

In general, the 10% federal tax does not apply to certain types of insurance, such as life, sickness or personal accident insurance and insurance against marine risks. The law also provides relief in some cases where a business can clearly demonstrate that the insurance is effectively not available in Canada. To qualify for this exemption, the business must file an exemption application with the CRA and provide specific information and supporting documentation.

Don’t forget provincial sales tax and insurance premium taxes

Buying insurance coverage from insurers not registered in a particular province may also lead to provincial tax liabilities for some businesses.

Three provinces currently apply a sales tax on certain insurance contracts (Quebec, Ontario and Manitoba). Similar to the federal rules, a business that enters into contracts with insurers not registered in the province may be required to self-assess a provincial sales tax on the related insurance premiums. The sales tax rates, remittance deadlines and related non-compliance penalties vary by province.

A business may also be liable to pay insurance premium taxes as the insured person where the coverage is in a territory or a province in which the insurer is not licensed (otherwise, the insurer is generally liable for these taxes). In some cases, the business may be required to pay an increased levy on some of these premiums. For example, Alberta imposes a levy of up to 50% of the premiums and up to 75% if the tax is paid late. Again, the insurance premium tax rates, rules and remittance deadlines vary by province and may be different than the ones for provincial sales taxes.

For more information, contact your KPMG adviser.

Safety is a shared responsibility: a 10-year review of surgical safety incidents in Canada

OTTAWA, April 13, 2016 /CNW/ – The effectiveness and safety of surgery has steadily improved over the last many decades in Canada. There are now over one million surgical procedures performed annually. Nevertheless, despite the significant improvements in patient outcomes, patient safety incidents do sometimes occur.

A detailed review of medico-legal cases in Canada between 2004 and 2013 reveals that a large number are related to surgical care.

This review was conducted by The Canadian Medical Protective Association (CMPA) and the Healthcare Insurance Reciprocal ofCanada (HIROC) who combined their surgical safety incident data collected over that 10-year span to produce a retrospective analysis. The two organizations, along with the Canadian Patient Safety Institute, are using the findings to advocate for extensive system and practice improvements.

In their analysis, the organizations identified 1,583 CMPA and 1,391 HIROC medico-legal cases involving an in-hospital surgical incident. Retained foreign bodies or wrong surgery were identified in 12 per cent of CMPA and 18 per cent of HIROC surgical safety incidents.

System factors – a lack of or non-adherence to a surgical safety protocol – were also found to be key contributors to surgical safety incidents.

“This review clearly shows that we need to maintain our focus and continue to build capacity in surgical safety,” said Polly Stevens, VP, Healthcare Risk Management at HIROC.

The analysis is the result of a request made of the CMPA and HIROC by members of the National Integrated Patient Safety Consortium, an initiative facilitated by the Canadian Patient Safety Institute. The group of more than 50 healthcare organizations is united in their pursuit of safer care for all Canadians.

“Working together on this review provided the opportunity for shared learning about surgical safety,” continued Stevens. “We really benefitted from each other’s unique databases and areas of knowledge.”

The results of their review have renewed the partners’ commitment to pushing even harder for systemic and workplace cultural changes within the healthcare environment.

“As we go forward, this is about building better healthcare systems and encouraging team training so that surgical outcomes are further improved,” said Dr. Hartley Stern, CEO of the CMPA.

“Surgical safety is a key element of patient safety,” said Stern. “This report contains valuable lessons and recommendations that surgical care providers can use to provide the best care possible. The CMPA, through its commitment to contributing to safe care and the prevention of harm to patients, is proud to be involved in this work.”

“Improving surgical safety culture requires the cooperation and commitment of the entire healthcare team in the adoption of safe practices,” said Chris Power, CEO of the Canadian Patient Safety Institute.  “In keeping with the mandate of the Patient Safety Institute we will take these recommendations and work with patients, leaders and providers to achieve a culture of surgical safety with improved patient outcomes.”

A Summary Report and full copy of the Detailed Analysis can be found at: www.patientsafetyinstitute.ca, www.hiroc.com and www.cmpa-acpm.ca.

About the Canadian Medical Protective Association (CMPA)
The Canadian Medical Protective Association (CMPA) is a not-for-profit organization that has delivered medical liability protection in a cost-effective and ethical manner since 1901. CMPA medical-legal protection enables physicians to practise confidently and to make decisions that result in better patient care and a more efficient healthcare system. The CMPA’s mission is to protect the professional integrity of physicians and promote safe medical care in Canada. Our vision is to be valued as an essential component of the Canadian healthcare system.

About HIROC
HIROC (Healthcare Insurance Reciprocal of Canada) is Canada’s leading provider of healthcare liability insurance. HIROC works in partnership with its 600 subscriber organizations to develop cost-effective insurance & risk management solutions that prevent losses, mitigate risk and support safety in healthcare. As a not-for-profit reciprocal, HIROC is owned by its subscribers and is dedicated to giving back – since inception, HIROC has given $120 million back to healthcare.

About the Canadian Patient Safety Institute (CPSI)
The Canadian Patient Safety Institute (CPSI) is a not-for-profit organization that exists to raise awareness and facilitate implementation of ideas and best practices to achieve a transformation in patient safety.  Funded by Health Canada, CPSI reflects the desire to close the gap between the healthcare we have and the healthcare we deserve.

SOURCE Canadian Patient Safety Institute

Earn extra income this year through Uber or Airbnb? Remember to report it

By Craig Wong

THE CANADIAN PRESS

OTTAWA _ People who drove for a ride-hailing service like Uber or rented out their homes through Airbnb last year earned extra income, and that needs to be reported come tax time.

“When you decide to put up the post for a room in your house or your cottage or in fact if you happen to sign up with Uber and be a driver, you’ve got I think an approach to earn income or money,” said Paul Woolford, a tax partner at KPMG.

“As such, there’s a need to report the benefits of those efforts.”

But some costs that were paid to earn the extra cash can be used to offset income and reduce taxes owing.

“In a simple context, anything that you incurred to provide that income … you can take an expense for the related cost,” Woolford said.

The complication comes in the shared aspect.

“There’s property taxes that apply to both personally and the room, there’s heat and electricity, there’s water costs, there’s potentially repairs,” Woolford said.

For example, people who rent out their cottage for one month of the year can take one 12th of the property taxes, insurance, and heating-cooling costs and expense those against the income they receive.

The profit is then rental income that must be reported on a tax return.

For those who worked as a driver for Uber, that means having kept logs detailing how much they used their cars for personal use and when they drove paying passengers to determine how much may be deducted.

“Record keeping becomes very important,” Woolford said.

Earlier this year, Airbnb agreed to email the 11,000 people in Ontario who list their homes or other spaces for rent on its site and tell them to report the income as part of a pilot project with the province.

Dale Barrett, a tax lawyer and principal at Barrett Tax Law, said he was unaware of any instances of the Canada Revenue Agency requesting information from companies like Uber or Airbnb so far.

“However, at any given time this could happen,” he said. “If these companies are American, the information could go from the American company to the IRS, from the IRS to CRA, then all of sudden they’ll know who all the Canadian players are and they can go ahead and reassess.”

Barrett noted that several years ago the agency launched a probe reviewing big eBay sellers and obtained information on its so-called PowerSellers.

“If you’re doing business with one of these sort of new economy-type of websites and you’re earning income, one way or another, the CRA will eventually find out,” he said.

“And if you haven’t declared it, you’re going to be subject to penalties and if the amount is great enough, prosecution.”

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