The Honourable Jim Flaherty, Minister of Finance, released a
consultation paper on April 26, 2009 seeking views on the potential
merits of allowing banks and other federally regulated financial
institutions to offer financial leasing for vehicles as well as
other household property. Comments on the consultation paper will
be accepted until May 8, 2009. The full consultation paper is
available at this link: http://www.fin.gc.ca/activty/consult/leasing-eng.asp.
Banks have always been able to offer purchase financing for
cars. However, for policy reasons, banks have been unable to offer
financial car leasing to consumers for the last 30 years. Given the
current environment, the federal government is contemplating
allowing banks to lease cars to consumers as other sources of lease
financing have become severely restricted, further impairing the
automobile industry in Canada. In reviewing this possibility, the
federal government seeks comments on the following questions:
How do you view the role and prospects of lease financing of
vehicles in the coming years?
Are the existing restrictions on regulated financial
institutions with regard to lease financing appropriate in the
future financing environment? If not, how should these restrictions
be amended to support broad access to financing in a stable
If federally regulated financial institutions were allowed to
provide lease financing, would you expect these entities to
participate in leasing? Do you believe such participation would
result in a significant increase in the availability of lease
Does financial leasing of vehicles and personal household
property pose risks to financial institutions? If so, how can those
risks be managed?
The prevailing view is that in the current economic climate, if
the government permits banks to offer financial car leasing, this
will likely benefit consumers, dealers, manufacturers and banks.
Accordingly, we expect comments from most interested parties to
favour relaxing the current restrictions.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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