GOVERNMENT FINANCE OFFICERS

ASSOCIATION, GFOA ALBERTA

In This Issue

• 2020 GFOA Conference..........…………...…..Page 1

• Keynote Speakers 2020 Conference….……..Page 2

• Social Media Volunteer…………………….…..Page 3

• Survey Winners…………………………...…….Page 3

• Professional Development…………………….Page 4

• The ERP Challenge……………………….Page(s) 5-7

• CRA Income Tax Act…………………....Page(s) 8-10

• Q3 Economic Outlook…………….…...Page(s) 11-13

GFOA Newsletter FALL 2019

June 7th, 2020 – June 10th, 2020

Cambridge Hotel & Conference Centre, Red Deer Alberta

“Boom Bust & Now What?

…Balancing Expectations”

Keynotes John Furlong and General Hillier

and many more renown speakers

Registration Begins in the Coming Weeks...Stay Tuned!

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CEO Vancouver 2010 Olympic & Paralympic Winter Games

Prior to his appointment at VANOC in 2004, Furlong was the President and Chief Operating Officer

for the Vancouver 2010 Bid Corporation. In his role, he became the Bid’s international face and key

spokesperson, tirelessly clocking more than 1.2 million miles in his travels to promote the Bid.

Furlong’s service to sport has landed him with numerous other forms of recognition – among them

The IOC’s Olympic Order and the IPC’s Paralympic Order.

In April 2012, John Furlong accepted a new position with the Vancouver Whitecaps FC soccer team,

where he serves as Executive Chair. Furlong has been involved with athletics all his life, having

competed at the international level in Basketball, European handball and Squash. He became

Canadian Squash Champion in 1986. Furlong has been a long time member of the Canadian Olympic Committee and has led

many high profile sport organizations in Canada.

He has been recognised by The Globe & Mail as Canada’s Nation Builder of 2010, as one of the top 25 most transformational

living Canadians and has been named Canadian of the Year by The Canadian Club. He is Canada’s 2010 Marketer of the year

and Sports Media Canada’s Sports Executive of the Year. In 2009 Furlong was named Canada’s Most influential Sport Figure by

both the Globe and Mail and the Canadian Broadcasting Corporation.

Around the Rings Magazine has listed Furlong as one of the worlds top five most influential Olympic Officials in both 2009 and

2010. He is also Sport BC’s Sportsman of the Decade. John was acclaimed as the 2004 Canadian Sport Awards’ Sport

Leadership Winner for his service to sport in Canada over a lifetime. He has also won Vancouver’s most prestigious tourism

award for the promotion of Vancouver around the world. He has been awarded Honorary Doctorate Degrees in Laws (2) and

Technology(1) from UBC, The Justice Institute of BC, and BCIT and an Honorary Doctorate in Tourism & Hospitality from

Niagara University, New York, USA.

Born in Tipperary, Ireland, Furlong has five children and eleven grandchildren. His book Patriot Hearts – Inside the Olympics that

changed a country became an instant national bestseller when it was launched in on February 12, 2011, the one year anniver-

sary of the Games.

Former Chief of Defence Staff, Canadian Forces

Born in Newfoundland and Labrador, General Rick Hillier joined the Canadian Forces as soon as he

could. Having enrolled in the Canadian Forces in 1973 through the Regular Officer Training Plan

program, he graduated from Memorial University of Newfoundland in 1975 with a Bachelor of

Science Degree. After completing his armour officer classification training, he joined his first

regiment, the 8th Canadian Hussars (Princess Louise’s) in Petawawa, Ontario. Subsequently, he

served with, and later commanded, the Royal Canadian Dragoons in Canada and Germany.

Throughout his career, General Hillier has had the privilege and pleasure of commanding troops

from the platoon to multi-national formation level within Canada, Europe, Asia and the United States.

He has worked as a staff officer in several headquarters, first at the Army level in Montreal and later

at the strategic level in Ottawa.

In 1998 General Hillier was appointed as the first Canadian Deputy Commanding General of III Corps, US Army in Fort Hood,

Texas. In 2000 he took command of NATO’s Stabilization Force’s (SFOR) Multinational Division (Southwest) in

Bosnia-Herzegovina. In May 2003 General Hillier was appointed as Commander of the Army and subsequently, in October 2003,

he was selected as the Commander of the NATO-led International Security Assistance Force (ISAF) in Kabul, Afghanistan.

General Hillier was promoted to his present rank and assumed duties as the Chief of the Defence Staff on 4 February 2005.

General Hillier

John Furlong

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Your association NEEDS VOLUNTEERS LIKE YOU...

The social media coordinator will develop and implement a social media strategy to increase overall reach and brand awareness. He/she will use social media outlets to promote engage the membership and increase online presence.

Duties and Responsibilities

The social media coordinator will:

• Develop a social media strategy

• Post regular updates to social media outlets, including news articles, blog posts, press releases, and any other promotional items

• Monitor activity and user interactions for all social media outlets

• Experience using key social media outlets (Facebook, Twitter, Flickr, YouTube, Pinterest)

• Strong writing and editing skills, with strong attention to detail

• Ability to use online tools to engage members, donors, and corporate partners

• Outgoing, enthusiastic and creative

• Works well independently and has teamwork abilities

• Able to problem solved effectively and strong communication skills

• Fluency in English.

This position requires a minimum 6-month volunteer commitment for 2 to 5 hours per week, which can be completed in your office or at home.

If you are interested in this volunteer position, email the GFOA Executive Director at: allan.bartolcic@gfoa.ab.ca

GFOA Alberta Bi-Annual Joint Survey

Thanks go out to all of you who participated in the 2019 joint survey done in September. It is your chance to let us know how we are doing.

Congratulations to the three winners for the $50 gift cards. Please contact Candace Coambs with the best mailing address to send the gift cards to.

Adele Wakaruk from the City of Lloydminster

Barbara Johnson from the MD of Peace No.135

Debra Brodie from Flagstaff County

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Workshops/Webinars Location/Presenter/Date Member Non-Member

NEW B. Improving Financial Reporting Processes

Single Webinar Only

Stephanie Porter, Presenter November 13

$ 175 $ 200

Auditing Essentials (repeat of January 2019)

Webinar

Tim Duhamel, Presenter December 11

$ 175 $ 200

NEW C. Reporting Essentials: Chart of Accounts

Single Webinar Only

Stephanie Porter, Presenter January 22, 2020

$ 175 $ 200

For all the Professional Development details or to register today, click here: PD Workshops & Webinars and scroll down to find the PD offerings of your choice. Please

contact Candace Coambs with any questions.

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Non-resident Taxes Part XIII With respect to Part XIII of the Income Tax Act, every non-resident person is required to pay an income tax on every amount that a person resident in Canada pays or credits to the non-resident person. The most common types of Canadian income subject to Part XIII tax are: dividends, rental and royalty payments, pension payments, old age security pension, Canada Pension Plan and Quebec Pension Plan benefits, retiring allowances, registered retirement savings plan payments, registered retirement income fund payments, annuity payments, and management fees.

For more information, see the Canada Revenue Agency's Non-resident tax calculator or contact the Canada Revenue Agency. If you receive Canadian income that is subject to Part XIII tax: • Canadian payers, including financial institutions, must deduct Part XIII tax when the income is paid or

credited to you. • The Part XIII tax deducted is your final tax obligation to Canada on this income (if the correct amount is

deducted). • The usual Part XIII tax rate is 25% (unless a tax treaty between Canada and your home country reduces

the rate). Part XIII tax is considered to be a final tax assessment hence there is no requirement for the taxpayer to file a Canadian income tax return. Part XIII tax is not refundable. Therefore, do not file a Canadian tax return to report the income unless you elect to file a return because you receive either: Canadian rental income from real or immovable properties or timber royalties (see T4144, Income Tax Guide for Electing Under Section 216) or certain Canadian pension income (Electing under section 217). Elections to reduce withholding & file tax returns The effect of the elections is to pay tax under Part I of the ITA rather than Part XIII. The onus is on the payer to withhold and remit the withheld amount to CRA along with NR4 slips that are required to be filed by the payer. Exception is elective returns under Sections 216 (rent), 216.1(non-resident actors), 217(pensions), and 218 (mutual fund trusts). Treaty exempt items Some items that may not be subject to Part XIII tax, when a treaty exists are: Copyrights, use of or right to use computer software, patents and know-how not provided in connection with a rental or franchise agreement, and management fees. For more information about Part XIII tax, please refer to the following: Information Circular IC77-16, Non-Resident Income Tax T4061 NR4 - Non-Resident Tax Withholding, Remitting, and Reporting Regulation 105 Withholding

Pursuant to paragraph 153(1)(g) of the Income Tax Act and section 105 of the Income Tax Regulations, every person paying to a non-resident person a fee, commission or other amount in respect of services rendered in Canada, of any nature whatever, shall deduct or withhold 15 per cent of such payment. This means that the payer’s withholding obligations are not affected by their residency.

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Withholding and remittance requirements:

The payer is required to withhold 15% on amounts paid to non-resident(s) in respect of services rendered in Canada. T4A-NRs are required to be filed by payer.

Amounts withheld must be remitted to the Receiver General by the 15th of the month following the date

of the payment. Payer’s failing to withhold and remit will be held liable for the amount plus penalty and interest.

The withholding under Regulation 105 is not considered to be a final tax. For this reason, the non-resident is required to file a Canadian Income Tax Return and pay Part I tax, if applicable (Section 115). Refunds may be issued if there is no fixed base or permanent establishment in Canada and/or if protection is provided under a tax treaty. For more information, please refer to IC75-6R2, Required Withholding from Amounts Paid to Non-Residents Providing Services in Canada. Regulation 105 Waiver A non-resident person, including a self-employed individual, corporation, partnership, joint venture or hybrid entity (such as a limited liability company), can apply to waive or reduce the amount of Regulation 105 withholding tax from amounts paid for services provided in Canada. Regulation 105 waiver application requesting relief under a tax treaty is submitted by a non-resident based on the absence of a fixed base or permanent establishment in Canada. For more information, please refer to Guidelines for Treaty-Based Waivers Involving Regulation 105 Withholding, published by the Government of Canada. Regulation 102 Withholding Pursuant to paragraph 153(1)(a) of the Income Tax Act and section 102 of the Income Tax Regulations, the employer (payer) of the remuneration is required to withhold the prescribed amount of Canadian income taxes from the remuneration paid for employment duties performed in Canada and to remit the amount to the Canada Revenue Agency, even when the employee is not resident in Canada and is exempt from Canadian income tax under a tax treaty. Pursuant to subsection 200(1) of the Regulations, the employer is also required to issue a T4 slip to the employee and to file a T4 summary with the CRA to report the income earned in Canada. Employer withholding obligations Income that a non-resident earns in Canada from an office or employment is generally taxable in Canada. However, a non-resident who is a resident of a country that has a tax treaty with Canada is likely to be exempt from Canadian taxation on the salary, wages, and other remuneration (employment income) he or she earns in Canada from a non-resident employer if certain conditions are met. Exemption of CPP may be available based on a reciprocal social security agreement between Canada and your employee's home country. These agreements make sure only one plan covers an employee—the Canada Pension Plan or a foreign social security plan. An exemption for EI may also be available if the unemployment insurance laws of the employee's home country require premiums to be paid on the same employment income. The onus is on the employer to obtain CRA’s authorization for the CPP and EI exemptions. For more information, see Guide T4001, Employers' Guide – Payroll Deductions and Remittances.

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Regulation 102 Waiver In order for the employer to be relieved of their obligation to withhold tax the employee would have to apply for and receive a waiver of withholding from the CRA. However, there is an exception to the employer’s withholding obligation for certain non-resident employers paying employment income to non-resident employees for performing the duties of an office or employment in Canada after 2015. These non-resident employers, who apply for non-resident employer certification, will not have to withhold and remit tax on the payments they make to non-resident employees who are working in Canada for a limited time and are exempt from tax in Canada under a tax treaty. There is no need for an employee working in Canada to get a waiver of withholding from CRA if their employer has been certified as a qualifying non-resident employer and the employee is a qualifying non-resident employee. For information on waivers obtained by non-resident employees, please refer to R102-R Regulation 102 Waiver Application. This article was prepared by Canada Revenue Agency (CRA) upon request from GFOA Alberta.

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Canada

After beating the Bank of Canada’s estimates for Q2, the Canadian economy has seen growth

decelerate in each subsequent month, culminating in a flat reading for July. This drag was led by the

maintenance at a major offshore oil production facility in Newfoundland and Labrador as well as a

further scale back on Alberta’s mandated restraint on oil production. This caused the mining and oil and

gas sectors to shave almost 0.2% off growth. In July, the oil and gas industry as a whole was down 3%.

What saved the economy from contracting in July was the wholesaling, retailing, utilities, and real

estate sectors. The latest readings on housing starts in Canada suggest that homebuilding might have

also rebounded in the latter two months of the third quarter. This is following the rebound of average

home prices from its 3-year low in February.

In terms of interest rates, markets are putting very low odds on a rate cut through January - too low in

our opinion. Although somewhat understandable in the wake of a Q2 rebound, solid jobs data, and

doubts on whether the Fed is prepared to move again.

However, there’s plenty of room for downside shocks, particularly through Canada’s ties to a slowing

global economy. The U.S.-China trade war and frictions between Canada and China could deepen,

Europe could fail to deploy fiscal stimulus in the false hope that negative interest rates will finally start

working, and Canadian households could get gun shy about debt-financed consumption. For those

reasons, we are forecasting a 25bp rate cut to 1.50% by the end of the year, 2019 GDP at 1.6%, and

2020 GDP of 1.4%.

Source: CIBC World Markets

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Alberta

While housing starts have picked up in Alberta, the rise in completed but unabsorbed units is primarily

owed to Edmonton and Calgary. The lack of demand for housing is related to the fact that Alberta has, at

least temporarily, lost one of its advantages over the rest of the country. Positively correlated with oil

prices, the Alberta economy enjoys benefits of strong immigration which leads to population and economic

growth. With production cuts, low Canadian oil prices, and a lack of investment in the oil and gas industry,

the Alberta economy has grown stagnant.

On the brighter side, Premier Jason Kenney has been advertising Alberta’s oil industry to foreign

investors who are increasingly focused on environmental, social, and governance (ESG) issues. Kenney

cites the fact that Alberta oil sands have rated low on institutional investors’ ESG matrix. The Premier is

making an effort to educate foreign institutional investors to remove or dampen the stigma attached to

Alberta’s leading industry.

While overall GDP growth in Alberta will look stronger in 2020 thanks to a rebound in oil production, we

don’t expect to see a large scale return in oil investment until closer to the completion of key pipelines,

which will limit immigration and housing demand.

United States

The U.S. had an eventful summer to say the least. Economic

uncertainty ramped up with the trade war weighing on consumer

confidence as well as increased pressure for further rate cuts. On July

31st, the Feds cut rates by 25bps. This served as the first rate cut in

the US since the financial crisis. The very next day on August 1st,

Trump announced a 10% tariff on another US$300 billion of Chinese

goods starting on September 1st.

This marked the beginning of increased market volatility during the month of August. Bond markets

began pricing in a cumulative 75bp cut before the end of 2019 while equity markets violently swung

based on mixed signals from both Trump and China. Further, the 2-10 year Treasury yields inverted

while the 30 year yield plunged below 2%. Lastly, the U.S. ISM Manufacturing PMI dropped below 50,

indicating a contracting manufacturing sector.

During September, the Fed cut another 25bps, equity markets partially recovered, and yield spreads

somewhat normalized (while still remaining very thin). Both Trump and China began easing language

with regards to the trade war. Trade talks are scheduled to occur during the first half of October, with

both sides having strong incentive to reach a deal. Sentiment continues to drive volatility while

fundamentals remain intact.

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Geopolitical Unrest

Drone Attacks

Saudi Arabia’s oil production was cut in half after a swarm of

explosive drones struck Saudi Aramco’s oil site which caused

oil prices to surge more than 20% overnight. The drone strike

highlighted the vulnerability of the network that supplies 10%

of the world’s crude oil. This caused geopolitical tensions

across the middle-east with the U.S. also weighing in. U.S.

Secretary of State Michael Pompeo said in a tweet there is no

evidence the attacks came from Yemen and blamed Iran

directly. Further, Trump expressed support for Saudi’s

self-defence during a phone call with Saudi’s Bin Salman.

Markets were fearful of an oil shortage for the remainder of

the year, however, Saudi Aramco’s facilities were back up to

near-normal productions levels by the end of September,

easing oil prices back down to the mid-50s.

Brexit

With Brexit scheduled to occur on October 31st, eyes are

set on whether Boris Johnson will go out without a deal. As

negotiations have soured recently, Johnson is scheduled to

talk with Ireland’s counterpart, Lea Varadkar during the first

half of October. It’s the meeting that is set to seal the fate of

Brexit. If Johnson can convince Varadkar to move, there is a

chance a deal could be outlined ahead of the summit of EU

leaders on October 17-18. If not, the UK will either be headed

for a no-deal split or a humiliating third delay, an outcome

Johnson himself has vowed never to permit.

Many Brexit supporters say it is hard to accurately predict

what will happen or believe any economic disruption will be

short-term and minor. On the other hand, most economists

and business groups believe no deal would lead to economic

harm and even a UK recession.

Sources: CIBC World Markets, Statistics Canada, CMHC, Trading Economics, Bloomberg, BBC, OECD, MarketWatch, ThomsonOne

James Hobson, CFA, PM, Investment Advisor at 403-260-0574 or 1 (800) 665-6864, Charet Chahal, CFA, PM, Investment Advisor at 403-260-0440

This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change. CIBC and CIBC World Markets Inc.,

their affiliates, directors, officers and employees may buy, sell, or hold a position in securities of a company mentioned herein, its affiliates or subsidiaries, and may also perform financial advisory

services, investment banking or other services for, or have lending or other credit relationships with the same. CIBC World Markets Inc. and its representatives will receive sales commissions and/or

a spread between bid and ask prices if you purchase, sell or hold the securities referred to above. © CIBC World Markets Inc. 2019. CIBC Wood Gundy is a division of CIBC World Markets Inc., a

subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. James Hobson and Charet Chahal are Investment Advisors

with CIBC Wood Gundy in Calgary The views of James Hobson and Charet Chahal do not necessarily reflect those of CIBC World Markets Inc. If you are currently a CIBC Wood Gundy client,

please contact your Investment Advisor. Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors.

Difference in UK real GDP relative to the UK staying in the EU

Source: OECD