Ontario Liberals now tax your stuff after you die

Posted September 3, 2015

Here’s a new, not so nice tax called the Estate Administration Tax (EAT) that the Wynne Liberals slipped through effective Jan. 1, 2015 and no one is talking about it!

Basically, your survivors and executors have to report the value of all your stuff, valuables, cars and trucks, second homes, boats, RV’s, right down to the exercise bicycle in the basement.

It is yet another roadblock to discourage real growth in Ontario joining the other job killers and evaporating prosperity. Here are some examples of how the Ontario Liberals have mismanaged the Ontario economy: We have the most expensive electricity rates in North America; a new job- killing Ontario pension plan; the most expensive alcoholic beverages in North America; sky high gasoline taxes; supply management agriculture boards that have driven basic food prices to excessive levels; an integrated sales tax of 13 per cent on all goods and services with minor exceptions.

Yes the province even charges the HST on the cost of your funeral.

The province charges the HST on the electricity you use.

The HST is charged on a number of consumables including vehicles, non-prescription drugs, clothing, and items that most people would describe a food or a derivative.

When does the premier stop her relentless quest to bail out a province she and her predecessor created that is now carrying an $8 billion deficit? Her finance minister claims the Ontario budget will be balanced by 2017.

That runs counter to what her federal Liberal leader is saying. He wants to remove the Harper government’s balanced budget legislation and go to deficit financing to fix the country’s infrastructure.

These two leaders who are currently working together to elect federal Liberals in Ontario, but don’t seem to be playing from the same page.

For all the details of this new tax grab, go to the link below where the government explains it or you can read the comments from funeral directors printed out below in layman’s terms, or both. But be forewarned, it’s scary stuff.

http://www.fin.gov.on.ca/en/tax/eat/

Our Wynne Liberal Government presumably has to find a way to repay the billion dollars they gave the construction companies not to build the gas-fired hydro plants and subsidizing wind/solar power projects, the Orange air ambulance fiasco, the E-health record keeping program that cost millions, and other boondoggles they created.  The aptly named EAT even has local Funeral Directors seeing red.

Here’s the skinny of Kathleen Wynne’s latest play to extract more money from taxpayers, even after they’re dead.

The current EAT tax rates

  • $5 for each $1,000, or part thereof, of the first $50,000 of the value of the estate, and
  • $15 for each $1,000, or part thereof, of the value of the estate exceeding $50,000.

Note: There is no estate administration tax payable if the value of the estate is $1,000 or less.

The estate administration tax is calculated on the total value of the estate. For example, for an estate valued at $240,000 the tax would be calculated as follows:

  1. $5 per thousand for the first $50,000 of the estate
    • $50,000 ÷ $1,000 = $50
    • $50 X $5 = $250
  2. Plus
    1. $15 per thousand for the remaining $190,000 of the estate
      • $240,000 – $50,000 = $190,000
      • $190,000 ÷ $1,000 = $190
      • $190 X $15 = $2,850
    2. For a total of $3,100 ($250 + $2,850) payable to the Minister of Finance. The EAT act demands that the executors or appointed representatives must complete the EAT return within 90 days.

In order to comply with this new death tax, the estate appointed representatives are forced to consult with the following professionals: Financial advisor, registered appraiser, lawyer, funeral director, insurance broker, the Municipal Property Assessment Corporation, the estate banker. Most of who charge a fee for service in preparing the Estate Administration Tax returns. Those fees along, depending on the size of the estate, could run into the thousands.

Yes, and the return, when filed, must be accompanied with payment in full.

Licensed Funeral Directors Tim Baragar and Jeff Neuman are sounding the alarm bells over a tax program that they say will make life difficult for estate representatives in Ontario.  Baragar makes it clear that his service does not end at the cemetery.

He and Jeff Neuman do their best to help families obtain pertinent documents and ensure that a loved one’s affairs are in order.

Sounding the Alarm

And that’s why Baragar and Neuman are sounding the alarm bells over the newly changed tax that took effect on Jan. 1. Its timelines and penalties are something these Funeral Directors think everyone needs to be aware of.

The newly changed tax program that Baragar finds frightening requires an executor to assess, appraise and value any and all property owned at the time of death on a tight timeline. This EAT appraisal includes anything that is not passed directly to a spouse or passed through joint ownership. Assets that are being gifted to charities also need to be included in the valuation. The tax is then calculated and needs to be paid immediately to the Province of Ontario as a deposit.

Baragar explains it this way – when a loved one dies and you are named as the executor of the estate, you apply for a Certificate of Appointment of Estate Trustee and then you have only 90 days to file your Estate Information Return. As soon as you file you have to pay the tax as a deposit. And if you don’t file, there are serious consequences.

According to the Ministry of Finance, “estate representatives who fail to file an Estate Information return as required, or who make false or misleading statements on the return, may be found guilty of an offense and, on conviction, are liable to a fine of at least $1,000 and up to twice the tax payable by the estate or, imprisonment of not more than two years or both.”

Has Ontario become a police state?

This is concerning to Baragar.  “It is completely unreasonable for the Ministry of Finance to expect this reporting within 90 days of the trustee beginning their role,” Baragar says. “Just getting print outs and information from banks and investment companies takes a lot of time. My biggest concern is that quite typically the trustees are often family members or close friends of the person who has died. So this simply isn’t a matter of completing a task that the Ministry of Finance merely views as a new source of income, it is a very emotionally demanding and time-consuming job. Couple that with the added stress of dealing with the loss as a family member or close friend, and it can make this role very upsetting and emotionally draining.”

And to be clear – the valuation can’t be a guess. The Province requires that you be able to back-up what you’re filing so if you’re not sure what the current market value is of a home, for example, it’s up to the executor to hire someone to do an appraisal.  There is even a link on the Ministry’s website to the Appraisal Institute of Canada.

And once you appraise, value and file you still have to be sure that nothing changes. If you made a mistake or if you missed something you have to immediately contact the Ministry (within 30 calendar days) and make all the necessary corrections.

“For our Government to threaten these individuals with charges and penalties is absurd,” Baragar says. “We pay tax when we earn our living. We pay tax when it generates income within an investment. We pay tax when we pull it from that investment, so this same money certainly shouldn’t be taxed again within the boundaries of someone’s estate.”

Enough is enough.

 

 

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44 Comments

Filed under Between the Lines

44 responses to “Ontario Liberals now tax your stuff after you die

  1. Randy Norris

    My father-in-law died last year and his estate was a mess. Getting it organized in 90 days would have been impossible. It’s nothing but a cash grab.

    • Kory Kalo

      Canadians have no fear. The way this government is taxing us to death…there will not be a cent left for them to tax. Someone with abit of common sense needs to stop this government or any other from taxing us to the grave. Just got my property tax bill. We pay tax on our income, taxes on our home and property when we purchase it, taxes every year while we own it, capital gains when we sell it, and if there is a cent left they want a percent of that estate. Why in God’s name do we have to pay taxes so many times on the same money. Seriously, we have legalized robbery in our government. A government that the tax-payers support. Enough already, I worked hard for any money I earned and you still wanted your share, I say this is organized crime.

    • Brenda McKay

      There is absolutely nothing we can do about this at the time of our death. Me, I don’t really care. Why would someone who can’t afford a funeral in the first place give a tinkers damn. I say let the government worry about my flipping bills, my taxes. What real difference does it make to me. I have served my purpose, done my best and send my love to my family and friends…

  2. First the Liberals ruin the province and now they can’t wait for us to die in order to pay their wages. They could care less if we run a deficit . What makes me even madder is that they use such under handed methods. They think we are all stupid. Why do people vote for them?

  3. bostoncollie

    The reason people vote for them is that they are paid off by our tax dollars. Teachers, Police, Firefighters, Civil Servants have all done well under the Liberal syndicate.

    • Louis

      Yea but some unions aren’t too happy with them, sadly enough people will keep voting for the liberals because people want services. Though people who want these services have to realize the government can’t provide them forever. Look what liberals did to Michigan, New Brunswick and California.

    • It wasn’t the unions who voted the Liberals in, it was southern Ontario that did that. The Liberals didn’t win many ridings in northern Ontario, and there’s lots of union jobs up here.

  4. Eva

    This is a misleading article. Th “Estate Administration Tax” is not a new tax and has in fact been in existence since the 1990s, if not earlier. The Estate Administration Tax Act came into effect in 1998. It is effectively a 1.5% tax. The reporting used to be on an honour system. The amendments to the act that took effect in January 2015 imposes new reporting requirements (together with enforcement and penalty provisions), which effectively ensures the wealthier estates do not “cheat”. The changes did not come overnight (i.e. “slipped through”), but was proposed, debated and was finally passed and took form by way of Bill 173 in 2012. The legal professionals and financial advisors in the field has been advised of the amendments for at least 3 years, and have written numerous articles about this accordingly. This has nothing to do with Wynn being the current Premier. The author of the article, unfortunately, did not do his homework and is likely more interested in baseless political bashing of the Wynn government than in the real facts. The reporting requirements are not difficult if you are not trying to hide the truth. If you have a complicated estate and cannot handle the administration of the estate, you should then consider consulting the professional, just as one would not perform medical procedures on oneself. There is no “cash grab”. Please educate yourselves on the facts before reaching conclusions. Not every article “published” on the internet is accurate.

    • Eva: Thanks for the history lesson. The key sentence in your essay is: “The amendments to the act that took effect in January 2015 imposes new reporting requirements (together with enforcement and penalty provisions), which effectively ensures the wealthier estates do not “cheat.”

      It appears that the Wynne government, in its desperate need for more revenue, passes amendments to an Act to stop the cheating of the wealthier estates. This shotgun approach affects all estates in Ontario. You fail to define the “wealthier” segment who you suggest have been cheating in finalizing estates.

      So, threats of stringent enforcement and penalty provisions in the new version of the Act, will solve the tax evasion problems. Who will enforce the new provisions, the death police? Whoever cooked these overbearing amendments, should be put in the stocks in front of Queen’s Park. This Act is in that medieval, draconian mode.

      The most surprising thing is that the Ontario Liberal party pushed this act of stupidity. What’s next? A tax on newborns because they dared to enter society?

    • J Douglas

      Wynne or McGuinty-!! Same dam thing. Same bunch of LIARS. Why do you think he bailed out so fast-?? So he couldn’t be held accountable. She tries to say she knew nothing about the gas plant debacle-?? Yet wasn;t here signature found on documents regarding said debacle-??
      And if she didn’t know, then she’s INCOMPETENT because when in the position she was in, it was her job to know.
      They have managed to BANKRUPT what was a pillar of the Canadian economy, Ontario.
      I said they would bankrupt the province before that sleezball was elected, and lo and behold, we’re doomed-!

  5. Sharebear

    Don’t get sick or die in Ontario. Bottom line!

  6. I just can’t believe that there are still people out there who can try to defend the actions of the Liberals. I guess what they say is true; you can’t fix stupid!!

    • Reg

      You’re proving your last sentence by believing the misleading article. It was the conservative government of Mike Harris that introduced this tax way back in 1998.

    • Reg: Keep sticking to that story. It was the Liberals who fine tuned it to impose draconian regulations and threats to those folks responsible for wrapping up estates.

    • Ron

      I totally agree! It is time to get rid of the liberals. I used to be a life long supporter of the party but no more. They have damaged or province with their stupid ideas! Vote them out!

  7. Lorna Schiralli

    The Estate Administration Tax (EAT), introduced in 1998 under former premier Mike Harris’s Conservatives, is payable on the value of a deceased person’s estate when a certificate of appointment of estate trustee is issued by a court. The only change being made is that the Liberals are putting in a time limit (90 days after probate is issued). You are purposefully fear mongering an this tells me a lot about the credibility of your blog.

    • Lorna Schiralli: What the Wynne Liberals have done is change the original Act. Without notice, on January 1st this year, they will enforce and penalize those estates that fail to have the assets appraised professionally or face retribution depending on the size of the estate, and representatives are required complete the return within 90 days.

      It’s ironic that the other provincial tax on estates, the probate fees, often take more than a year to settle. There is no mechanism to dispute the valuations and the legal fees charged to the estate will increase with the complexities of the estate. It does not matter what premier introduced the original act. It is what the Liberals have done to force heirs and representatives to engage in costly administration of their estates to meet the new deadlines and threats by the Wynne Liberals.

      You’ll hear no complaints from the individuals who created the estates in the first place.

      You raised the issue of my credibility, you are shooting at the wrong target. It was the Liberals who created this Act.

  8. Len Komarnisky

    Wynne & Co. Have done a good job of running the province of Ontario into the ground. Your hydro rates would make Adam Beck roll over in his grave, now this death tax is just another cash grab on the already stressed taxpayers of Ontario.

    • Len Komarnisky: You must be reading my mind. My current Guelph hydro bill for July and August with adjustments is $506.53 with the HST and the Ontario clean energy 10 per cent discount. We are only two people who live modestly in a a slightly upscale home. The Hydro statement includes a delivery charge of $143.40; regulatory charges,$18; debt retirement charges. Considering the weather patterns for those two months, the bill seem extraordinarily high when compared with homer years. Perhaps it is because Guelph Hydro sends a dividend of $1.5 million to the city each years through Guelph Municipal Holdings Inc. In polite circles this may be considered another tax on users. If so, that’s illegal under provincial law.

  9. I left Quebec because of the language laws. Now I will have to leave Ontario because of the stupid government?

  10. lois

    the taxpayers backs are almost completely broken. what a sad state of affairs. it will be a cold winter for many of us.

  11. Mike

    You might want to do some fact checking. This is not a new tax. It was brought in by the PC government in 1998.

  12. I think the whole thing is disgusting .TAXING the DEAD is cruel and unusual punishment. The deceased have paid taxes all of their lives and still have to pay when they die . The estate is taxed ,the funeral is taxed ,even the plot in the cemetery is taxed . When is it going to END? Death is hard enough for those left behind without having a time limit put on them to pay even more taxes for those that have passed ,some of these things take more than ninety days to settle. Our Government and to me it does not matter who instituted this tax should be totaly ashamed of themselves. We have a beautiful country ,lets not spoil it by taxing it’s populace to death (no pun intended)

    • Linda Sauve: If the death police don’t agree with the estate estimated value of the tangible assets, the representatives must hire an appraiser to value the estate’s stuff. And a lawyer might also be needed to defend the estate’s representatives in the event of a dispute.

      You’re on the money Linda, with your observation of all the taxes we must pay in our lifetimes. Even right up to the final interment of the deceased. If they could figure out a way, they tax you in the great hereafter. Come to think about it, they already have!

  13. d.howard

    The beneficiary of my estate is going to be my ex-wife…

  14. Rod Healey

    I do not under stand why these Liberals are always blaming the P.C. for all the screw ups that are popping up in to days rules and laws. If they say that the previous Gov. was at fault, they have had over ten years to correct the insulting policies. If we think the Wynne Gov, is out behind the barn, we will see a much larger disaster if the Trudeau Gov. is elected.

  15. Ontarioites whine and whine about taxes but they still allow 10’s of millions of dollars to leave their province for the coffers in Quebec every single year without standing up and saying ENOUGH!! That so called ‘have not’ province has been on the dole for decades. They cook their books on purpose to keep on getting more. Ontario has always supported this. They have welcomed being suckered by Quebec . Its on you.

    • Anne: Up until late last year equalization funds came from Alberta, B.C. as well as Ontario.The Federal government decides how the equalization payments are distributed based on each province’s Gross Domestic Product. There are other factors but the exercise is to level the economic playing field across the country.

      But along came the collapse of the oil business. Alberta’s contribution to the equalization fund has been sharply reduced as a has Saskatchewan and B.C. Ontario remains in an economic funk thanks to eight years of Liberal management. One thing that sticks out is Quebec’s reluctance to allow TransCanada pipelines to connect it’s existing Energy East line to a line into Montreal and St John where there are major refineries importing oil from Saudi Arabia and other middle east countries. By doing this, Canada could market its oil from either side of the country. Despite there whining of the environmentalists who want to eliminate fossil fueled energy, most if us aren’t ready to depend on bicycles to go about our business. And yes, we are paying too much taxes in Ontario.

  16. Lorna Schiralli

    Gerry Baker…I think you are full of yourself. Creating a divisive issue so you can opine and opine and opine about the horrible Wynne government. I get it. As I said, this article tells the readers a lot about you.

    • Lorna Schiralli: It’s not about me, its about us. I admit it. I’m no fan of Premier Kathleen Wynne and her solution for reducing the $10 billion Ontario deficit is to sell 60 per cent of Hydro One. Now if she could ever get the elementary teachers and school custodians back to full-time work, thousands of beleaguered families would cheer. Now that Justin Trudeah is our new prime minister, history shows that the same party controlling the country and Ontario does not work well as time will doubtless demonstrate.

  17. Tax me I still have real change in pocket

    And to think we now have Justin spend and tax in charge federally …scarry

  18. Jay Robitaille

    Fire Wynne and jail that thief NOW.

  19. Tibor Martinek

    We, the people of Ontario must organize into a populists PAC to influence the next election. Wynne and the corrupt liberals must go and we have to keep tab on Patrick Brown

  20. Don

    Budget balance by Harper we knew was a lie. Harper had a terrorist attack staged on Canadian soil to push bill c51 that also happened to protect Harper from the many criminal investigations! Wynne that thing would kill herself if it had the smallest part of human decency. Kinda like but Harper without the murder of service men.

  21. GB

    We get it – you don’t like Wynne or the Liberals. Fine. However, you are completely misrepresenting facts. This “tax” exists thanks to Mike Harris. The current government tightened the reporting rules on it. Agreed, its a cash grab. However, you make it sound like it was created by the current government, which is was not, in an effort to goad people into anger for the current government which you clearly don’t support.

    At least tell the truth – you can still achieve your goal – you know that, right? Supporting ignorance is not the answer.

    • GB Thanks for your comment. We’ll just have to wait until next June to find out who is right, or wrong. The only caveat is the lady may call a snap election before next June. She certainly is priming the pump with promises to spend more of our money. Old governments are like people, they eventually die.

  22. thomas larocque

    The saga is a ongoing way to leach on the low hanging fruit. Its no different than the tax department chasing taxpayers and letting the complete non payers go free. Its because the employees of the tax department only want to eat the low hanging fruit. Its no different than when the govt makes you RIFF your money and add it too your income and now your still working at 71 and your paying 48% tax on your overall earnings. We voted for them. They need to change the poison to another poison as they are mostly rotten apples.

  23. OMG stop whining.You are dead so who the f cares?? Of Course it is a tax grab!!! that is what pays for roads and schools and that health care you go on about. You can legally leave your kin money or other possessions in trust funds or give it to them when they are alive. Planning is everything so start talking to your family

    • Margaret Johnson: Not dead. Trust in professional advice and understand what this ETA modification is: A drastic demand to pay up within 90 days of a passing, or else.

  24. No wonder there are so many suicides and vast depression now a days.
    This world is so dis functional.

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