Tax Bill C-43 Wealth Strategy Impact and some good news to act on - Situational Financial Planning, Legal & ID Shield, Halifax, Nova Scotia, Canada

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Tax Bill C-43 Wealth Strategy Impact and some good news to act on

Financial Plan
Bill C-43, Impacts Wealth Accumulation, Conservation and Distribution Strategies
Questions you may have:

1. How will the individual and corporate strategies often used to conserve & increase your wealth and increase after tax income be impacted? (The "what about me?" question)

2. How do you determine if it is in your best interest to take advantage of the rare time sensitive opportunity to "grandfather" and continue to enjoy the current rules ?
What to do:

1.  If you have non-registered assets attracting taxation strategies to consider include:

  • Family Asset Transfer Plan and Corporate Asset Transfer Plan to convert a taxable portolio into a non-taxable one with an immediate increase in your estate value. (See sample strategy impact below)

  • Executive Retirement Plan, Corporate Investment Shelter and other corporate funded strategies.

2. If you are accumulating wealth, have wealth that will be distributed and / or you own a business, the changes will affect many strategies. A few hundred dollar loss or hundreds of thousands of dollars, how much depends on your individual circumstances.

  • A list of resources to help you save money and help with your understanding and uncover planning oppportunities*. Resource: Worksheets. Calculators, Links

  • Own a  company? Is there a problem that your company needs or can solve that you would also benefit from? Completion of the "Business Overview" will provide you with some some insight.

3. Contact an experienced life insurance broker with a professional designation like a Chartered Life Underwriter (CLU) or Certified Financial Planner (CFP). Resource: Choosing Your Financial Planner

  • If you are in Nova Scotia, you can request a complimentary 3O minute Strategy Session (Telephone or Skype). Your questions will be answered to help you determine your priorities and how you would like to proceed.
*Planning Opportunities

Often it is possible to accomplish your objectives and get better value for your money by using a process that integrates your goals.
You want:

Guaranteed Interest Income

Imagine if there was a tool available that could increase your after tax income by 50, 60, 70% or more.

If your preference is for a guaranteed interest income, a Prescribed Annuity can do just that. The amount of income from a prescribed annuity that must be included as taxable income is going up though. You will pay more tax!

The good news is that you can lock-in or grandfather the current tax rules and your higher after tax income if the plan is issued before the end of 2016. (MORE)

Lump Sum and Overfunding

The overfunding and lump sum deposits taking advantage of the tax-sheltered growth are currently permitted based on 1982 legislation.
Based on 1958 mortality rates, the permitted deposits currently vary greatly between companies based on product design. Lump sum "1" pay plans will not be permitted, since the new rules limit "quick pay" to 8 years and reduce the amount that can be deposited early to enjoy tax-sheltered growth.

The good news is that policies in force before the end of 2016 are grandfathered under the current rules.

Corporate Owned Insurance

Your company solves a problem and your company and you benefit. Your benefit will be reduced under the new rules.

Many corporations purchase life insurance for death protection: key person coverage; fund a buy-sell agreement; protect a business loan and pay capital gains tax liability on the death of a shareholder. Death benefit comes into the company tax-free, resulting in a credit to the capital dividend account that can be paid out tax-free to shareholders of a CCPC. The tax-free amount is calculated by subtracting the adjusted cost base (ACB) from the death benefit. The new legislation reflects that people are living longer and therefore less than the full amount will flow through tax-free if death occurs prior to life expectancy.

The good news is that policies in force before the end of 2016 are grandfathered under the current rules.
** Under the New Rules (Bill C-43), life insurance will still provide cash at death and an associated reserve will still enjoy tax-sheltered growth. An annuity will still provide a guaranteed income. However, most strategies utilizing insurance products will be affected. Whether it is in your interest to take any changes before 2017, depends on your individual objectives and circumstances.


You have a guaranteed investment certificate (GIC) generating taxable interest income.

1. If your primary concern is increasing your after tax cash flow with a guaranteed income, under the new rules, a prescribed annuity can still do that. You will, however, receive less after tax income.

2. If your primary concern is increasing your after tax cash flow with a guaranteed income and conserving all or part as a legacy, under the new rules, an insured annuity can still do that. However, this strategy that utilizes two products, will generate less of an advantage than it does currently. (MORE Age 55+)

3. If your primary concern is increasing the asset for your legacy enjoying tax-sheltered growth with an insurance "bump", under the new rules, "1" pay plans are not permitted. The new rules reduce the amount that can be deposited in the early years and limit quick pay to 8 years.

Since deciding if, which and/ or when any strategies including the ones listed above or the 16 to "Protect and Grow your Nest Egg"  is dependent on your individual objectives and circumstances, you will want to make an informed decision.

To Make an Informed Decision, Action is Required

Which do you choose?

1. Not learn more and just wait and see. (Ostrich Approach)

2. You can start by:

    1. researching the legislation to understand the changes and the impact it will have on existing products.
    2. researching different products to understand the impact the new rules will have on the different strategies.
    3. researching the different strategies to understand which one could benefit you.
    4. contacting an insurance professional to assist you with implementation.

3. Contact an experienced insurance professional at the start.

If you are in Nova Scotia, you can  Request a 3O minute Strategy Session. It is free and you are under no obligation whatsoever. Like many professionals, a free initial consultation is offered to attract new potential clients and determine if there is a fit.

Your questions will be answered to help determine your priorities and how you would like to proceed. (What do others say?)

Should you decide to proceed, then I, of course, will be available to help you with implementation.

We will work with your existing advisors (accountant, lawyer, etc.) whenever possible.

Planning Opportunities

Often it is possible to accomplish your objectives and get better value for your money by using a process that integrates your goals.

Thank you for reading the post. Please share this page with your friends and relatives who might care about tax sheltered growth and increasing after tax income. They will appreciate being informed about the tax rule change while they still have time to act.

Have any "what about me" questions?


Are you 55+ Avoid having to say: I wish I had know about grandfathering

If a product is recommended to address your needs: permanent life insurance,annuities, Executor Liability Insurance,GIFs,guaranteed issue life insurance,universal life insurance,GICs,employee benefits,guaranteed investment funds,business sale referral,term life insurance,whole life insurance,business insurance,long term care insurance,marine insurance,simplified issue life insurance,disability insurance,critical illness insurance,home and auto insurance,travel insurance,RRSPs,pension plans,retirement income plans,custom designed risk management,income annuities,executive benefit plans,commercial insurance,health insurance,mortgage referrals,cyber and privacy insurance,joint annuities, We are not obligation to do business with any single company or group.


Paul is a Certified Financial Planner (CFP) licensed by the Financial Planners Standards Council; Financial and Estate Plans are provided under that license.

The information contained in this website is intended to provide general guidelines only. The application and impact of the law can vary widely from case to case based on the specific or unique facts involved. Accordingly, the information in this article is not intended to serve as legal, accounting or tax advice. Users are encouraged to consult with their professional advisers for advice concerning specific matters before making a decision.

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J. Paul Wilson, CFP®, ChFC®
Certified Financial Planner
27 Blue Thistle Road Halifax, Nova Scotia, B3S 1M3
Office (902) 405-8665 Email
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