The Canadian Tax Foundation is proud to have collaborated with BDO Canada LLP and Gowling WLG (Canada) LLP in bringing you the highly anticipated fifth edition of Taxation of Private Corporations and Their Shareholders.

This book provides practical information to professionals who advise clients on the application of the Income Tax Act to private corporations and their shareholders. Contributors from BDO Canada LLP and Gowling WLG (Canada) LLP offer detailed analyses of a broad range of subjects essential to the area, including:

  • the decision to incorporate a business,
  • the legal nature of the corporate entity,
  • the capitalization of a corporation,
  • distributions to owner-managers, employees, and family members,
  • the acquisition and disposition of assets,
  • the drafting of shareholders’ agreements,
  • the purchase and sale of a business,
  • the consequences of a shareholder’s death, and
  • the most tax-effective structuring of a business.

The fifth edition of this classic text has been thoroughly updated and takes into account the new rules, enacted in 2018, on income splitting through the use of private corporations. The implications of the tax on split income (TOSI) rules, in particular, are given comprehensive treatment.

Table of Contents
 
Acknowledgments
 
Author's Note

Foreword

The first edition of Taxation of Private Corporations and Their Shareholders (TPCS), edited by Howard J. Kellough and the late Peter E. McQuillan, was published by the Canadian Tax Foundation in 1983. It soon established itself as the essential reference tool for tax practitioners dealing with private corporations. Second and third editions followed in 1992 and 1999. Each edition involved the efforts of many professionals from Fraser Milner and KPMG LLP, who prepared chapters under Howard and Peter’s careful guidance. The fourth edition was published in 2010, this time with Paul Bleiwas of Fraser Milner Casgrain LLP and John Hutson of Deloitte & Touche LLP providing editorial oversight to a large team of authors assembled from the editors’ respective firms (including, in the interests of full disclosure, yours truly).

It is important to acknowledge, as we publish a fifth edition of TPCS, all of those involved in previous editions, which reflect a consistent standard of excellence and constitute a solid base. This excellence, a benefit to the Canadian tax community for over three decades, is owing to the dedication of these editors and authors and to their generous donation of time and insight. I thank them on behalf of the Foundation.

Planning for a fifth edition was well underway in early 2017, in anticipation of a 2018 publication date. In July of that year, however, Finance Canada released for consultation a package of draft proposals whose scope and impact could only be described as seismic. We immediately recognized that any text on the taxation of private corporations that did not incorporate these proposals would be irrelevant. With this in mind, we decided to defer further work until the legislative direction became clear. At the same time, it was becoming apparent that the scope of work required for the fifth edition would be considerable—not simply an update but effectively a complete revision of almost every chapter.

In 2018, new editors agreed to take on this formidable challenge. Rachel Gervais and Dave Walsh from BDO Canada LLP, and John Sorensen and David Stevens from Gowling WLG (Canada) LLP, assembled teams of authors from their firms and started work later that year. Regular status meetings of the four editors and the Foundation’s editorial team, with a virtual data room for project management, helped everyone to communicate and kept the project and its dozens of participants on track.

Given the sweeping nature of the 2018 changes to the taxation of private corporations, and the complexity and uncertainty that these changes entailed, the tax community keenly awaited the new edition of TPCS. To speed its release, we adopted an innovative approach to publication, adding individual chapters to TaxFind (the Foundation’s digital research database) as they emerged from the editing process rather than delaying publication till completion of the whole. Chapters began to be available in the fall of 2019.

I am confident that tax practitioners will find this new edition’s content, whether obtained through TaxFind or in traditional book form, a trusted, comprehensive, and invaluable resource.

I would like to thank the editors, Rachel, Dave, John, and David, along with their skilled colleagues who served as authors. All of these contributors are to be commended for their enthusiasm and dedication, and for the countless hours they invested in this project in service to the tax community. The generous support of BDO Canada LLP and Gowling WLG (Canada) LLP is much appreciated.

Thanks are also due to my talented colleagues at the Canadian Tax Foundation, who, under the capable leadership of Managing Editor Michael Gaughan, guided this project to successful completion. | Heather Evans, Executive Director of the Canadian Tax Foundation.

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