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Execution act (Ontario) update - new exemption limits, Spring 2006

The value of goods exempt from seizure under the Ontario Execution Act has been increased to reflect inflation over time. Creditors should keep these limits in mind when making collection and recovery decisions. The new values exempt from seizure by a judgment creditor effective December 14, 2005 are as follows: Clothing $ 5,650.00 Furniture 11,300.00 Tools of Trade 11,300.00 Farm Equipment 28,300.00 Automobile 5,650.00

GST – The Brass Tacks of the Reduction to 6%, Autumn 2006

The 2006 Budget announced a reduction in the rate of GST from 7% to 6% effective July 1, 2006.

The hot topic of discussion since the announcement, has been GST in relation to new housing. The key dates being Budget Day (May 2, 2006) and Canada Day (July 1, 2006). Agreements executed from and after Budget Day get the benefit of the reduced tax rate. But all good things come with a catch. The reduced tax rate of 6% is not available should occupancy or title get transferred before Canada Day. Agreements executed pre-Budget Day, pay GST at the rate of 7% but are benefited from a payback of the extra 1% paid by claiming a “Transitional Rebate”. The Transitional Rebate is not available where occupancy or title are obtained before July 1, 2006. The GST reduction therefore benefits those that buy post-Budget Day and get title after Canada Day.

Deposits paid in advance for services not yet rendered or billed are termed “Retainers”. Trust obligations imposed by the law society require Retainers to be held in trust and not disbursed until invoiced. GST then applies at the rate prevalent on the invoice date.

How does the reduction affect lease payments? Most often payments are due on a certain date in terms of a written agreement. The rate applicable, is the prevalent rate on the date of payment due or made, whichever is earlier. Therefore if payment fell due on June 15th for the period June 15 to July 14, GST would apply at 7%.

Deposits paid under purchase agreements do not attract GST. Deposits are part of the total consideration for a service or supply. In cases of real property, the supply is the transfer of a home against consideration, which does not become due until the title transfer date. GST is then payable on the purchase price on such title transfer date at the rate then in effect.