News in brief: A look at news, facts and figures shaping the world of payroll professionals

Unionized wage settlements on the rise • New Brunswick civil servants see $2.9 million in bonuses • RRSP fraud • Average weekly earnings rise 3.7 per cent, led by P.E.I., Saskatchewan and Alberta

Unionized wage settlements on the rise, private sector outpacing public sector

OTTAWA — Canadian companies and their unionized employees are agreeing to higher wages in new labour contracts. Increases in base wages averaged 2.3 per cent a year in May, in 21 sets of negotiations covering more than 45,000 workers, according to data published by Human Resources and Skills Development Canada. That's up from 1.8 per cent in April and 0.9 per cent in March. The private sector far outpaced the public sector, at 2.1 per cent compared to 0.2 per cent.

New Brunswick civil servants see $2.9 million in bonuses in 2009

FREDERICTON — Despite a wage freeze announced in 2009, 1,274 public sector workers in New Brunswick earned $2.9 million in bonuses last year. The Liberal government implemented a two-year wage freeze for the public sector because of the significant budget deficit in 2009. However, about 14 per cent of the civil service received an average of $2,260 in bonuses, according to documents obtained by the CBC. The bonus payments were approved by each department's deputy minister and were for work deemed "exceptional." In the department of health, employees who worked on the H1N1 vaccination program received bonuses, while the department of transportation rewarded employees who responded to flooding on provincial roads. The department of post-secondary education, training and labour awarded the highest number of bonuses, with 341 employees receiving the extra pay. The office of the premier and the department of energy handed out the fewest bonuses.

Self-directed RRSP promoter guilty of orchestrating a fraud of more than $3 million

LONGUEUIL, QUE. — Jacques Gagné, a self-directed registered retirement savings plan (RRSP) promoter, was found guilty of tax evasion at the Longueuil courthouse in July. His sentence hearing will be held at a later date. The Canada Revenue Agency (CRA) investigation revealed that, for the 1997 to 1999 tax years, Gagné enabled 152 taxpayers to avoid reporting a total of nearly $3.3 million withdrawn from their RRSPs, registered pension plans (RPPs) or locked-in retirement accounts (LIRAs), thus enabling them to evade a total of $623,033 in income tax. Many of the taxpayers involved were recruited through deceitful advertisements published in newspapers. To make it possible for the taxpayers to benefit from their cash assets without paying the taxes owing, Gagné secured accountant certifications attesting the shares purchased were in fact a qualified investment to a self-directed RRSP. The scheme consisted of using the funds withdrawn to acquire shares from dummy corporations, which, in fact, were owned by Gagné, namely 9056-2927 Québec Inc. (Servitek 2000); 9058-9557 Québec Inc. (Educamax); Énergie GYD Inc.; Les Immeubles RV (1986) Inc.; and 9063-3223 Québec Inc. (Services Financiers Mackenzie). In January 2008, Laurent Boulianne, a salesman for Gagné at the time, was found guilty of tax evasion in a similar scheme. He was fined $37,500 for enabling 16 taxpayers to not declare $350,300. The CRA publishes tax alerts on its website to warn taxpayers about schemes that promise tax-free withdrawals.

Average weekly earnings rise 3.7 per cent, biggest increase since February 2008

OTTAWA — In May, average weekly earnings of non-farm payroll employees rose by 3.7 per cent from May 2009 to $848.45. This was the biggest year-over-year increase since February 2008. In recent months, the pace of growth in earnings has increased. May marked the sixth consecutive month for which the year-over-year increase was at or above 2.3 per cent. During the prior eight months, year-over-year increases were below 1.8 per cent. Among Canada's largest industrial sectors, growth in average weekly earnings from May 2009 to May 2010 were at or above average in administration and support, waste management and remediation services (up 10.9 per cent), educational services (up 10.3 per cent), accommodation and food services (up 6.5 per cent), wholesale trade (up 5.4 per cent), manufacturing (up 5.3 per cent) and professional, scientific and technical services (up 4.3 per cent).

P.E.I., Saskatchewan and Alberta lead nation in average weekly earning increases

OTTAWA — Average weekly earnings on a year-over-year basis increased in every province in May, according to Statistics Canada. The largest increases occurred in Prince Edward Island (up 5.9 per cent), Saskatchewan (up five per cent) and Alberta (up 4.4 per cent. New Brunswick had the slowest rate of growth with an increase of 2.3 per cent. Overall, Alberta had the highest average weekly earnings, at $985.17 in May, followed by Ontario at $874.66. These were the only two provinces in which earnings were above the national average of $848.45. Since payroll employment started to increase in August 2009, earnings have increased near or above the national average rate of three per cent in all provinces except Quebec, up 2.4 per cent, Manitoba, up 1.5 per cent and New Brunswick, up 0.8 per cent.

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