Dodge white-knuckle driving this season!

How to prepare your car for our trademark Canadian winters:
In general, Canadian weather is flakey, but winter takes it to a new extreme: snowflake-y.
One minute it will be clear and bright, and the next minute roads turn into a slip-and-slide. Canada: land of snow falls, snow squalls, and full-fledged blizzards. Snowy and icy conditions can test even the most seasoned driver.
Here’s how you can equip your car for safer driving through the winter season:

Winter Tires

Your car should have winter tires as soon as the temperature gets below 7°C. Before you roll your eyes & ignore our advice, consider the fact that in places like Germany when winter tires became mandatory, accident rates decreased by 50%. Plus, having winter tires from November to March will qualify you for a discount on your Auto insurance! When choosing your tires, look for the Alpine symbol and get a set of four for greater security.

Windshield Wipers

Replace worn-out windshield wipers with heavier blades. They will make it easier to remove snow & ice. Ensure that your washer fluid has anti-freeze & always keep a spare bottle on hand in case you run out. Finally, take the time to clean snow off your car, even when you’re running late. Being able to see properly will help keep you & other drivers safe on the road.

Winter Tune-Up

Many mechanics offer a winter tune-up special around this time of year. You should ensure that they check your break pads, fluids, battery, engine, sensors, & lights. This way, you’ll have peace of mind knowing that your car is well-equipped for the road ahead.

Emergency Kit

Anyone who’s ever been stuck in the snow knows that an emergency kit is a necessity in the winter. Stock yours with: a shovel, ice scraper, sand or a mat in case your tires need traction, jumper cables for your battery, blankets, flashlight, first aid kit, inflated spare and enough clothing to keep you warm.

Last but not least: Auto Insurance

Accidents can happen despite your best efforts. And when they do, you’ll want to know that you and your car are fully protected. At PROLINK—Canada’s Insurance Connection, it’s our job to explain your coverages and your exposures, so that you can make an educated decision knowing all the benefits and any risks.

Want more information? Contact us today! 

Call 1 800-663-6828 or fill out the form below:

A dash of income here, a sprinkle of income there: A new recipe for income splitting to please the CRA’s demanding palate

In January 2018, changes to Canada’s “Tax on Split Income” (TOSI) legislation came into effect, introducing more stringent rules for private corporations. Corporations have until the end of 2018 to ensure that they are compliant with the new regulations before answering to the CRA.

We’re sure that we don’t have to tell you that, in Canada, income is taxed on an individual basis, not on a household basis. While income tax can hurt, if you own a small business or private corporation, you’ve likely figured out that you can save on income tax by employing income sprinkling (also known as splitting).

Income sprinkling is when a private corporation pays dividends or other types of income to family members in an effort to reduce a business owner’s overall income tax. Smart. But the government is smart when it comes to meeting its needs too.

We’re sure that we don’t have to tell you that, in Canada, income is taxed on an individual basis, not on a household basis. While income tax can hurt, if you own a small business or private corporation, you’ve likely figured out that you can save on income tax by employing income sprinkling (also known as splitting).

Income sprinkling is when a private corporation pays dividends or other types of income to family members in an effort to reduce a business owner’s overall income tax. Smart. But the government is smart when it comes to meeting its needs too.

The not-so-great-news:

The CRA has implemented changes to limit your ability to use the sprinkling option.

In the past, the CRA’s TOSI rules targeted income splitting with immediate family members who were minors under the age of 18. The new TOSI rules now apply a broader set of regulations to adults as well as minors. If your circumstance falls under the revised TOSI legislation, any split income will be taxed at a top personal tax rate and individual tax credits may be denied.

Split Income,  as defined by the new TOSI rules includes: taxable dividends from private corporations; shareholder benefits; partnership income from related businesses; trust income; debt income; and more. 

The not-all-is-lost-news:

The government has introduced exclusions for certain circumstances—a few of which we cover below. If you fall under one of the excluded scenarios, TOSI will NOT apply. If you are aged 25 or over, and DON’T qualify for any exclusion, a reasonableness test will weigh any split income against your actual contribution to the business.

Notable exclusions from the new TOSI rules include:
  • Retirement Exception:  if a business owner is 65 years or older and is receiving split income from a business where they have made a meaningful contribution (see Excluded Business Exception), TOSI rules will not apply. TOSI will also not apply if the business owner’s spouse receives split income from the same business—regardless of their age.

  • Excluded Business Exception: the TOSI rules should also not apply for income or dividends from a business or for capital gains from its sale, if a family member 18 or over is engaged in the business on a regular, continuous and substantial basis. A family member generally qualifies:

    • If they have worked on average at least 20 hours per week in the business in the current year, during the part of the year in which the business operates; or,

    • If they have worked on average 20 hours per week in the business (again during the part of the year in which the business operates), for ANY five years occurring at ANY TIME in the past; i.e., these five years do not need to be in succession.  In this case, any dividends or capital gains they receive now or in the future from the family business should not be subject to TOSI.
  • Excluded Share Exception:  split income paid to individuals aged 25 or over will not be taxed by TOSI standards if it  is derived from “excluded shares.” For shares to be considered as excluded shares, the following conditions must be met:

    • Shares of the family member must represent at least 10% of the business both by votes and fair market value (these can be separate from the excluded shares).

    • The corporation must earn less than 90% of its business income from the provision of services.

    • The corporation must not earn more than 90% of its income from one or more other related businesses of the individual that are outside of the corporation.

    • The corporation is NOT classified as a professional corporation (that is, it doesn’t belong in a field regulated by a professional governing body like a college).

The clear-as-mud-news:

One challenge is that the government has not explicitly defined every term referenced in the TOSI Act. For example, the Act does not define “services” under the Excluded Share Exception.  Another challenge, for the Excluded Business Exception, is proving that a family member has worked 20 hours per week in the past.  While the government intends to be flexible, they will need some evidence.  Going forward, start tracking working hours.

While the above three exclusions represent notable exceptions, they are not the only ones set out by the government. Additional exemptions include inherited property, capital gain, marriage breakdown, and more.

No set formula:

As a result of the new legislation, uncertainty flooded the small business sector’s tax landscape. To limit your liability with the CRA, and maximize your ability to split income, you will likely need to make changes to the way that you run your business. The government has given private corporations until the end of 2018 to reorganize their shareholder structures.

Need guidance? PROLINK can offer perspectives on what others have done and can connect you to the right resources for your unique operations. Our goal is to build resilient organizations.
Peter McCabe, Risk & Insurance Advisor

Peter McCabe, Risk & Insurance Advisor

Peter has advised public, private, and non-profit organizations regarding their risk transfer of organizational exposure to losses related to professional negligence, bodily injury, and cyber breach. In the face of ongoing disruption and change to the way Canadians do business, Peter strives to build risk management solutions for clients that will allow them to continue to grow and flourish.

Peter McCabe, Risk & Insurance Advisor

Peter McCabe, Risk & Insurance Advisor

Peter has advised public, private, and non-profit organizations regarding their risk transfer of organizational exposure to losses related to professional negligence, bodily injury, and cyber breach. In the face of ongoing disruption and change to the way Canadians do business, Peter strives to build risk management solutions for clients that will allow them to continue to grow and flourish.

Want more information?

Contact us today!

Why insurance rates are increasing and what you can do about it

To own a house in Canada, you need insurance. To drive a car in Canada, you need insurance. But what if no insurer is willing to insure you—or if the price is so high that you can’t afford it?

Are insurance companies just plain mean?

Short answer: no, insurance companies aren’t mean. Insurance is designed as a way to transfer financial risk away from the individual and into a community risk pool. In an ideal world, everyone contributes to the pool by paying a fee and only a few will ever need to make a claim. Unfortunately, we don’t live in an ideal world.

In Canada, climate change has caused more:

Freak-of-nature storms cause clustered property losses where entire communities are affected. Distracted driving, impaired driving, and auto fraud have caused significant auto-related losses. Since most individuals have transferred some or all of the risk onto their insurance, the financial burden falls on the insurer to pay out all of the claims.

Stop and think for a second. You pay a couple of hundred dollars a month in premium to cover potential losses of millions of dollars. This works well in our ideal scenario. But in a world where a tornado can cause you—and others like you—to make claims worth millions of dollars, it becomes clear that the risk pool you subscribe to can no longer afford to sustain that much loss.

Insurance is a business, too.

So no, insurance companies are not mean. They are a business. And in order to pay out claims—and stay in business—the risk pool needs to be properly balanced. Lately, perceived risk levels are rising and as a result, some insurers are reducing coverage levels, charging a higher premium—or refusing to offer coverage at all. 

So what can you do?

The good news is that every insurance company has its own formula for calculating risk. Discounts, premiums, and even coverage levels vary from insurer to insurer. At PROLINK, we represent over 30 insurers, and with over 30 years of experience, we have it down to a science. Wherever you’re coming from, and whatever you need, we’ve seen it all.  You can depend on us to find you a policy that gives you superior protection at a reasonable price. 

Want more information?

Contact us today!

Plan A: Never get seriously ill in your life. Plan B: Panic?

Facing a serious illness is physically, mentally, and financially difficult. You need a real backup plan.

1 in 3 Canadians is expected to face a critical illness at least once in a lifetime.

One in 12 Canadians currently live with heart disease, and two in five will develop cancer throughout their lifetime. Despite these statistics, the mortality rate has decreased in the last 15 years according to the Public Health Agency of Canada.  Studies show that Canadians are living longer than ever, with the average life expectancy expected to increase to 86 for females and 82 for males by the year 2031.  

Serious illnesses can drain your finances in unexpected ways:

As well as being incredibly stressful, serious illnesses can be financially draining. For example, some of the most cutting-edge treatments are not covered by general health plans, while some of the latest healthcare innovations are only available in the US. Those are just the direct costs.

Indirect costs can encompass anything from travel expenses to child care, house cleaning services, and more. Meanwhile, existing debts like mortgages and lines of credit still have to be paid. Unfortunately, most people don’t intuitively know to account for these things when considering their financial plans and contingency scenarios.

Facing a critical illness is a life-changing experience:

The recovery process often includes self-reflection and the re-evaluation of life goals. Perhaps you may decide to quit your job or go on a once-in-a-lifetime vacation. Nobody really knows how they will react to a critical illness until they are experiencing it for themselves. Sadly, given the high occurrence rate of such illnesses, you have no choice but to prepare for the possibility that it could happen to you. 

This is where Critical Illness Insurance can help. Once you have been diagnosed, this policy will provide you with a lump sum that you can use in whatever way best fits your needs. This sum is NOT taxable, and once it’s paid, there are no restrictions as to how you can spend it—whether that’s a trip to Bali, or paying off your mortgage.

You may already have Disability Insurance, or Life Insurance, or both. So what's the difference?

  • Disability Insurance is only intended to replace a monthly salary and cover regular expenses; it's usually not enough to cover extra costs.
  • Life Insurance is there to help your family reduce financial strain after your passing.
  • Critical Illness Insurance is a living benefit, meaning that it gets paid out to you (in full) to use for large expenses at-will.

Here's what to look for when purchasing Critical Illness Insurance:

  • Group Rates: With large groups, the risk is spread out between many individual insureds. That means lower premiums.

  • Guaranteed Acceptance: Normally, acceptance is dependent on both your personal health history and that of your biological parents and siblings. It can be difficult to qualify. So, if you see an opportunity to get guaranteed Critical Illness Insurance, you should apply.
To discuss your needs and evaluate options available to you, contact PROLINK—Canada’s Insurance Connection at 1-800-663-6828 today. We will interview you and find a solution that best fits your needs and offers the protection you require. 

Want more information?

Contact us today!

Five Vehicle Features That Can Impact Your Auto Insurance Costs

Whether you’re buying a new 2018 model or just generally upgrading with a used vehicle, here are our top five vehicle features to keep your insurance costs lower:

Model:

It’s no secret that last year’s model comes with a lower sticker price on the window. The Manufacturers Suggested Retail Price (MSRP) also plays a role in how much your insurance will cost. The general rule is the older the model, the better savings you’ll see—both at the dealer AND on your insurance.

Trim:

There are lots of bells and whistles that can be added to your vehicle like special paint, graphics or leather interiors. These are grouped into packages identified by letters at the end of the model name, like GL, LE, LTD or SPORT. Since these add-ons cost more to replace, the cost of your collision and comprehensive coverage will also increase. 

Trim:

There are lots of bells and whistles that can be added to your vehicle like special paint, graphics or leather interiors. These are grouped into packages identified by letters at the end of the model name, like GL, LE, LTD or SPORT. Since these add-ons cost more to replace, the cost of your collision and comprehensive coverage will also increase. 

Body Style:

Most vehicles can be grouped by body style, like 2-door, 4-door or minivan. The bigger the body and the more people you can carry, the higher your costs for Accident Benefits and Third Party Liability coverage.

Manufacturing Region:

Where your vehicle was made impacts your insurance because it impacts the cost to repair your vehicle. European- manufactured vehicles are often the most expensive to insure, followed by North American vehicles. Asian-manufactured vehicles are generally the most cost-effective.

Manufacturing Region:

Where your vehicle was made impacts your insurance because it impacts the cost to repair your vehicle. European- manufactured vehicles are often the most expensive to insure, followed by North American vehicles. Asian-manufactured vehicles are generally the most cost-effective.

Upgrades:

Depending on your insurer, various upgrades can have an impact on your insurance. Increasing your horsepower, for example, could mean higher insurance costs. On the other hand, a vehicle with 4-wheel drive will save you on your insurance. 

Buying a new car? We’ve got coverage that’s right for you at a competitive price. Get a quote and see for yourself! 

Want more information?

Contact us today!

Heads Up! Coming soon to a country near you: data protection regulation with TEETH.

In May 2018, the European Union launched the General Data Protection Regulation (GDPR): a new directive with the ability to fine a company up to 4% of global revenues for failing to safeguard sensitive client data. ​

But you don’t have European operations, so you don’t need to worry, right? Well, not exactly. If you have customers that live in the EU, or business partners that operate in the EU, the demands of the GDPR may have already landed on your desk.  And even if they haven’t, this type of regulation is likely to make its way across the Atlantic in the near future. It’s in your best interests to get on board with the new rules.

But you don’t have European operations, so you don’t need to worry, right? Well, not exactly. If you have customers that live in the EU, or business partners that operate in the EU, the demands of the GDPR may have already landed on your desk.  And even if they haven’t, this type of regulation is likely to make its way across the Atlantic in the near future. It’s in your best interests to get on board with the new rules.

What’s changed and what’s in store?

The first 100 days since the GDPR came into effect were unremarkable, despite a noticeable increase in complaints about the misuse of personal data.  However, almost immediately after the 100 day mark, British Airways reported a massive breach of customer data. Initial reports from RiskIQ named a group of hackers known as “Magecart” as the suspected perpetrators behind last week’s attack. We still don’t know the extent of BA’s culpability in the breach that saw more than 300,000 accounts compromised.

Regardless of who is to blame, in 2018 we know that even if an organization takes all proper precautions, a data breach is nothing short of inevitable.  Still, in direct contrast to the many cautionary tales out there of what NOT to do when it happens to you, BA took all of the right steps to restore customer trust. They informed customers immediately, confirmed that passport data was safe, outlined action plans, brought in authorities, and alerted the regulators.

Crisis averted? No. The next day close to CAD 900 million was wiped off the market value of BA’s parent company.  Why?  If BA is found to be out of compliance with the demanding protection laws of the EU’s GDPR, then the UK regulator could fine BA up to 4% of global revenues – that’s a fine of over CAD 1.5 billion. What does it really mean to be compliant with the GDPR?

The EU’s GDPR demands that companies MUST:
  1. Obtain EXPLICIT consent from customers when processing or collecting sensitive personal information. This is mandatory.  Customers must opt-in after seeing a statement that defines the data to be collected, how it is used, how long it will be stored as well as any associated risks.  Firms must re-acquire consent whenever they repurpose the collected data. There is no grandfathering in, and customers can withdraw consent at any time.

  2. Respect the right to be forgotten. If a customer withdraws consent, they have the right to request erasure of any personal information that’s been collected. The challenge lies in determining where all of the customer’s information resides, how it can be deleted, and whether you have shared this information with third parties. If yes, you will have to confirm that any third parties have deleted the information as well. 

  3. Conduct Data Protection Impact Assessments before undertaking any project that places personal data in permanent storage. The purpose of the assessment is to confirm compliance with privacy regulations, determine the impact of using the personal information, and more.

  4. Employ a Data Protection Officer if the companies make use of customer personal data and have over 15 employees.

  5. Report data breaches within 72 hours of discovery.

  6. Deploy data encryption and other technical precautions when collecting and processing sensitive personal information.
Your next steps:
  1. If you have operations in the EU, or customers that live in the EU, act quickly to comply with the GDPR or you could face fines.

  2. If you partner with firms in the EU, and have access to sensitive data, reach out so that you have adequate time to plan and implement safeguards and procedures. EU firms are already placing pressure on Canadian partners to become GDPR-compliant.

  3. If you believe that you have a material level of exposure, have a third party specialty firm audit your company for GDPR compliance. Self-audits are often not adequate and not defensible in court. In addition, you could find yourself uninsurable for this risk unless you can demonstrate that you have had a third party audit.

  4. If you have operations or clients in Canada, North America or Asia – dig the well before you are thirsty:
    • Prepare to report a data breach quickly. The CURRENT law in Canada states that data breaches must be reported as quickly as possible and without any unreasonable delay. 
    • Line up the legal and public relations support, and plan on how to keep your business running as you deal with the crisis.
    • Ensure that you will have adequate funds in place for any damages.
    • Appreciate that some version of GDPR is coming to a country near you.

The good news is that many customers are willing to forgive data breaches when a company is contrite, communicates, and acts to reduce the immediate customer impact and likelihood of recurrence.  It’s possible to minimize reputational damage. The bad news? Future regulations may not be so forgiving.

Need guidance? We will help you plan and protect. We can share what steps others in your industry are taking and advise you based on your unique operations. Our goal is to build resilient organizations.

We are PROLINK – Canada’s Insurance Connection.
Peter McCabe, Technology Practice Leader

Peter McCabe, Technology Practice Leader

Peter focuses on helping Canadian businesses address the implications of cryptocurrency and blockchain technology, as well as the new cyber security benchmarks set by the General Data Protection Regulation legislation in the European Union.

Peter McCabe, Technology Practice Leader

Peter McCabe, Technology Practice Leader

Peter focuses on helping Canadian businesses address the implications of cryptocurrency and blockchain technology, as well as the new cyber security benchmarks set by the General Data Protection Regulation legislation in the European Union.

Want more information?

Contact us today!

Searching for Clarity in a World Obsessed with Cryptocurrency

Bitcoin was introduced into the global market in 2009 and changed the way we conduct business forever.

Before the era of the blockchain, all currencies were controlled by banks and the government, with each transaction subject to an array of fees. Cryptocurrency disrupts markets by existing independently from traditional financial institutions. 
Instead of shuffling cryptocurrency through banks, blockchains settle accounts in real time. These transactions are anonymous and all but fraud-proof. And instead of a government deciding to print more bills,  more cryptocurrency is generated when individuals or companies “mine it”. That is, when they solve complex equations to validate transactions that are happening live on the blockchain.
But while Bitcoin may be the first—and the most valuable—cryptocurrency, it has a finite supply and faces competition. In recent years, other cryptocurrencies, such as Ethereum, have emerged and gained traction. Whatever the case, one thing is clear: cryptocurrency is becoming increasingly more popular and mainstream. 

So what does this mean for the average Canadian business?

  • If you accept cryptocurrencies for services rendered, you must understand that you are NOT tax-exempt. The CRA defines cryptocurrency as a commodity (like gold or silver). As such, it is governed by the section of the tax code that applies to barter and trade transactions.
  • Like any commodity, you must determine the dollar amount that you would have charged for your services when you accepted the cryptocurrency. For example, if you usually charge $300 per hour, you must use the same rate on your tax return—even if you are compensated by different means.
  • To assign dollar value to cryptocurrency transactions, you must use the exchange rate on the day the transaction took place. Unfortunately, anyone who follows the crypto markets knows that the minute-to-minute fluctuations of these currencies can be extremely volatile. Luckily, tools such as the Canadian Bitcoin Index make it easy to check the exchange rate on any particular day.
  • If you sell cryptocurrency holdings, you must convert the value into Canadian dollars and declare any capital gains. Plus, if you pay an employee using cryptocurrency, you must also convert the payment to Canadian dollars based on the exchange rate on the day the payment is made.

If you're unsettled by crypto, you're not alone.

While cryptocurrencies offer many distinct advantages, the truth is we are still in uncharted waters. Any Canadian business operating in the cryptocurrency space should proceed with caution and ask for help when it comes to risk management.
At PROLINK, some of our clients include: large cryptocurrency investment funds, start-ups interested in paying their subcontractors using crypto, and even traditional businesses that are looking to ensure they have access to cryptocurrency should they ever become the subject of a ransomware attack. We can help you navigate the changing crypto landscape with a clear view of the associated opportunities and risks on the horizon. 
Peter McCabe, Technology Practice Leader

Peter McCabe, Technology Practice Leader

Peter focuses on helping Canadian businesses address the implications of cryptocurrency and blockchain technology, as well as the new cyber security benchmarks set by the General Data Protection Regulation legislation in the European Union.

Peter McCabe, Technology Practice Leader

Peter McCabe, Technology Practice Leader

Peter focuses on helping Canadian businesses address the implications of cryptocurrency and blockchain technology, as well as the new cyber security benchmarks set by the General Data Protection Regulation legislation in the European Union.

Want more information?

Contact us today!

5 Ways You Can Protect Your Home While You’re On Vacation

Nothing can ruin your vacation high faster than coming home to a robbed or damaged house. 

Here are five tips to help you avoid that scenario:

Don’t post about your travel plans on social media. By announcing your departure, you could make yourself a prime target for a break-in.

Make sure to lock all possible points of entry. You may think this is common sense, but you’d be surprised how easy it is to overlook a window or garage door as a possible access point.

Recruit your neighbor to collect your newspaper and mail. A collection of papers at your doorstep is a clear signal that you’re away, and could leave your home at risk.

Anticipate unpredictable weather. In Canada, summer thunderstorms can come out of nowhere causing flash floods. Make sure that your patio furniture is covered, and that your downspouts are pointing away from your house to prevent any flooding.

Take your “hidden” spare key inside. Don’t make it easy for thieves to enter your home by leaving them a key. They know where to look.

Despite your best efforts to protect your home, we know that things happen.

That’s why it’s important to have a comprehensive Home Insurance policy in place. At PROLINK—Canada’s Insurance Connection, it’s our job to explain your coverages and your exposures, so that you can make an educated decision knowing all the benefits and any risks.

Want more information?

Contact us today!

Got your Data in the Cloud?

Got your Data in the Cloud? That's nice.

But Guess What-Your Liability and Cyber Exposure Remain Firmly Planted on YOUR Ground.

Your organization is responsible for safeguarding all data and information you collect from third parties. Using a cloud service to store your data does not transfer your liability in the event of a breach, and you can be held accountable.
Selecting the right cloud service provider can mean the difference between a lasting success or a costly failure. You need to ask the right questions and set the right requirements to ensure that your potential cloud provider increases your productivity, not your risks.

Before signing a contract, make sure it address the following:

  1. Is the provider obligated to replace your stored data if a disaster destroys their servers?
  2. Are there resources in place to back-up your data to ensure that there cannot be any permanent loss?
  3. Is the timeframe for the cloud provider to restore your data short enough for your business?
  4. Where is the data stored? While your provider may be headquartered in Canada, it could utilize server space in multiple countries. Depending on the location, this could mean reduced security standards.
  5. Is the process to transfer data from their servers back into your control well-defined, should your business relationship end for any number of reasons?
You are never done with cyber-security even once you complete your due diligence and select a cloud provider that you can entrust with your data.  Despite your best efforts, you could still experience a breach.

How Can Cyber Insurance Help?

When you or your cloud provider has experienced a breach, time is of the essence.  Many cyber insurers provide you with immediate access to a legal Breach Coach who manages your response and investigation process.  

 

The right breach coach will help you start the response process under attorney-client privilege. This way, you can carefully prepare and control how information is released publicly.  By engaging legal counsel specializing in data breaches, you are assured that you will be compliant with breach notification requirements.

Want more information?

Contact us today!

Renovating your home? Here’s what you need to know:

In Canada, summer is synonymous with construction and home renovations. Since we’re in high season for renovations, we want to make sure that you’re aware of the potential risks you face when it comes to home improvement projects:

Don't Get
Caught Unware:

At PROLINK, we’ll take the time
to review your policy thoroughly,
making sure that you are protected from any exposures including common mishaps like theft and more.

Want more information?

Contact us today!