The 'If You Died Tomorrow' Test: Succession & Tax Planning for Construction Business Owners

0:12Welcome back to the Atlantic Construction Podcast. We'd like to thank our current sponsors FCA, Shy Cook Insurance, and Luminous Labs. We hope you enjoy the episode. Do you guys do a lot of succession planning? I'm just curious. Like, I was thinking about that earlier when I was sitting here — you guys were chatting away and I was like, is there one that you come out of and you think, well, that was done optimally and successfully? Or is it just usually like there's so many things involved, whether it's family succession

0:44or mentor to — you know, like older to different generations, different thinking, all that kind of stuff. It must be multi-generational wealth transfer, yeah. Is there anyone that's perfect? No — things always happen, but you can still come out and say, look, we extracted the best result possible in this. Yeah. Usually what'll happen — like, I'll give you an example. Peter's talking to one client right now, and you know his initial intention was to retire this year, sell his business and such, and the

1:18business is his baby. You know, so now it's okay — instead of the planning for this year, is it now 2025, is it 2026? You know, we've done all the stuff behind the scenes, but it's like we're trying to figure out from a tax planning perspective what's the year that we do certain things, and he hasn't settled down on exact dates yet. You know, so that's why I said things aren't necessarily perfect. He's over 65 but he can't stop working anyway — it's not working financially. We have lots of

1:49clients who could retire right away, yeah, but they just can't let go of it and they're just not ready. But the way we've been able to prepare them — do you find you have some that should retire and it's unhealthy that they won't? Or is it more like their passion is still there and it's all positive? Or are there situations where it's like their bucket list is just to keep enjoying work? Yeah, yeah. They've traveled a bit, they've seen what they want to see, and they just

2:21enjoy providing employment for people. Yeah. Or they just enjoy, you know, being part of the market — they just, because some people feel, some people are afraid to retire because they don't know what they're going to do. Right. You know, we had a client who — and I can't say who he is, obviously — but he was a manager and, you know, he did advertising and he would, Sunday nights, you know, he'd be working on his advertising at home on the kitchen table,

2:54you know, and when it came to retirement, I think he was terrified to retire, yeah, because work was his life. You know, and when he retired, you know, his wife passed away and he just — for him it was lucky because his son and their family moved in with him. And you know, but a lot of people are just terrified because they don't know what they're going to do. Yeah. I feel like when we can pick up on that, because when we say to a client, so

3:23when's the last time you took a vacation? Oh, last year, year before, whatever. Okay, how long was it? Ten days, two weeks. Were you anxious to get back to work? Oh yeah, I couldn't wait to get back. Yeah, we know it when people say, "Gee, I always look forward to a vacation, I wish I didn't have to go back." Okay, retire. Yeah. Like, the comment we say to a lot of clients — and these wouldn't be business owners, just typical employees — they, a lot of them say, "I

3:51can't wait to retire." And we always say, "What do you — what is retirement? You want to retire to what?" I understand maybe you don't want to be at your current job anymore, but what do you want to do then? And I said, just put the thinking cap on, imagine — you know, what do you want your days to look like? Yeah. And for many of them, nobody's ever asked that question. You know, and then it really gets to the heart of, okay, what can I see myself doing? Or maybe it's

4:20just, I'm dissatisfied at my current job, maybe I want to go do something else but I still want to keep working. Yeah. You know, and that becomes part of the discussion. And they don't need to do it financially — it's just mentally they want to feel there's a purpose in their life. For owners it's more consuming — for owners, business owners, not better or worse, just more consuming — and it's that that leads to becoming such a part of your identity that you don't know, maybe, who you are after. I think

4:49about like pro athletes who retire — like, often there's a period of depression for several years, whether they get into broadcasting or they stay in the world of that sport or whatever. But they don't know what to do with themselves, either — because all they did from the age of five until 35, yeah, was play that sport, and then they don't know what to do with themselves. Same thing with the business owner. For the business owner, the business is their baby, and they want to

5:14make sure that if they sell the business, or if they pass it on to the next generation, that it's run the proper way, and it's a legacy for them. Yeah. But often the challenge is the better way to run the business — they think — is only their way, and they don't realize that sometimes things change in business and the next generation that's taking it over, maybe they're doing something even better with the company. But the owner doesn't see it that way because they see it as:

5:41"You're making changes to my business that I started, even though you don't own it anymore." Yeah. You know, and it creates sometimes issues in family dynamics, and sure, there's all sorts of stuff that happens. Just to answer your question, Brian — earlier you mentioned, sorry, Daniel — your question earlier got me thinking. Because normally what we say to a client is, if you were to die today, or not come back to work for whatever reason, how would the business evolve? And if someone says the business would

6:14completely fall apart, like it would be a disaster, then you're not ready — it's not ready to be sold. Like, there's a lot of work to do to prepare for that business. If someone says — like, honestly, if you said to me, Daniel, you said, "Peter, what if you died tomorrow? What would happen to your practice?" I would say there would be really no issues. Like, I could go, I could be laying in the hospital bed tonight being told I had 24 hours to live, and I actually wouldn't worry about my

6:43business. Because I have Aaron, I have a partner, and I have a partnership with someone who is as good if not better than — so Aaron would take over the practice completely, and then he would add other staff and pick up areas as needed. Like, he'd be flat-out busy 24 hours, but then he'd replace me. Right. So my business is ready to be sold — the tax situation, my accountant has that all organized, and the lawyer, and the family trust — like, everything would flow perfectly. And in other

7:20words, I have no changes to make in the next 10 years. I don't think there'd be anything that will change moving forward. So I'm prepared to sell, meaning I'm prepared if I were to die — then, because what happens is, a business owner will say to us, "Oh yeah, no, no — I go on vacation for two or three months and I come back and there's changes and improvements and everything's great. Like, the more they flush me out the door, the more the business does, because the management team, they make changes when I'm not

7:48there, and they're in the mode, and when I come back things are working better than before." Yeah, so those are the businesses that are worth a lot of money, and those are the business owners that are most comfortable with where they are. Does that make a lot of sense? Of course, it makes absolute sense. So business owners who worry and stress about not being able to get to work, or there's a storm, or there's COVID — you know, it's because it's not functioning properly. Right. You know, and

8:17I look back at our practice — when COVID came, well, first of all, we had digitalized our practice. We had it completely done by, what, April or May of 2019, so it was no longer paper-based. We were the only practice in Atlantic Canada to have done that. When COVID came, I told my boss, I said, "Yeah, we're moving home probably Friday. Everyone's going to take their laptops home and away we go. We've got one desktop to take home, we're good." Easy transition for us, didn't affect us really, because we were

8:53portable and ready. Other people were trying to find moving companies to get their filing cabinets brought home. Right, so how prepared are you? Yeah, right. Anyway, we should probably — no, I mean, I've heard those same comments from owners and CEOs in the construction world about file sharing and those kind of digital file sharing — how important those things are, whether using cloud-based software or whether it's being organized digitally — is everything. It would have helped a lot through the last few years. Of course.

9:25Well, especially when COVID hit and we were even told between March and June we weren't even allowed in the office. We couldn't access anything. You know, and if our business was dependent on the paper files that were there, you know, we'd have had massive problems. So, you know, it was good we made these changes a year before that, and for us it was just, okay, let's just keep running our show. You know. So yeah. And a comment you made earlier, Aaron — about, when I think

9:57about, you know, building asset owners or real estate companies, contractors in commercial institutional — some of the larger projects, large contractors — you mentioned just the shift, intergenerational wealth. Peter used that term. You mentioned, Aaron, like, just different thinking and there's different generations involved. I feel like right now is a particular time in the industry in Atlantic Canada where you just have that — you know, the next say five-plus years, you have a lot of people that have been around a long time, yeah, who will be

10:34at the edge of retirement. Right. Or they need to — and then this younger generation is coming up. So I think, like, you see that on the micro scale within companies, but also on a general scale — like, this entire industry is in that phase now, where there's a huge transition period and a lot of communication gaps between how people think from a certain era and another era. And it has a lot to do with the culture, it has to do with their

11:04learning and education, it has to do with technology. I remember someone telling me once, like, it's great to be in business with someone 10 years older and 10 years younger, just because of that interval and how — and I don't know, it's just an interesting time for that. Those comments — there's been talk for years about what's going to happen when the baby boomers retire. And we often hear the talks about, you know, what's going to happen in healthcare when we have all these

11:31doctors and nurses retiring at the same time that people are getting older and need medical services. What's going to happen in education where all these teachers are retiring — and there was a wave, or there was a period of time where they weren't hiring teachers — and you've got a lot of younger, inexperienced teachers who have to take over principal and vice principal roles and such. But there isn't as much talk about business owners, and business owners are retiring en masse as well. And the expectation is, over the

12:03next 10 years, there's trillions of dollars of business value that's going to be changing hands. More than 50% of business owners will change hands in the next 10 years, and it's finding the right people to look after those businesses. You know, one of the goals for Peter and myself is, we want to see Nova Scotia's economy continue, and our concern is how many businesses are going to close up because they don't find the right owners — and they'll just allow the businesses to die.

12:38And that impacts the economy, it impacts employment, et cetera. You know, so if we could do our part to help these business owners be prepared for a transition — potentially, you know, look for partnerships, look for, you know, help train their employees, get them ready to take over the businesses — you know, then we know we've got a sustainable economy that helps all of us. You know, so when we're talking to business owners, it's kind of one of our goals — we want to see a lot of success in the

13:09province. Some of the things we see, Daniel — we'll talk to a business owner and say, "So, who's your largest client, and how much of your revenue comes from that client?" "Oh, 70% comes from this one company that we deal with." Okay, shouldn't we be talking to that company about them buying you out? Because if your business just closes up and folds up, how are they going to meet their supply chain? So a lot of times it's saying, "I never thought of that." Well, let's talk to your largest

13:41client customer and let's see what they would say if you retired. "I never had that conversation." Well, let's talk to them, because they might say, "Oh yeah, well actually my son and my daughter are kind of butting heads at the company, and I really would like to get my daughter her own company, and I think she'd actually run yours quite well." So let's have those conversations. So a lot of times it's bringing those ideas ahead and thinking out of the box. And, or you say to a client, you know, who's your

14:10number one — like, you're on the other end of it — and you say, "So, who's your largest subcontractor? Or who do you depend on?" "Oh, this company does this for us, that for us." "And so what if that company didn't exist anymore?" "Oh my God, we'd be in trouble." So it's often a chain reaction of events — it's not just one company, it's integrated. Right. So that's why we talk to clients about making your succession plan as early as you can, because a lot of times

14:38people don't make it — people die, people get sick. Right. Or, you know, you depend on a child. And I mean, you know, a guy that I went to school with, his name was Will Dennis — nice, super nice guy — and his dad was Graham Dennis, and they used to own the Herald. You know, his sister Sarah took over and I believe she runs SaltWire and all that stuff. But Will died — he had an aneurysm, suddenly, at a friend's funeral — or friend's wedding — in London. Right, and he

15:08was gone at around age 30. You know, and it was like — cool, right? So part of it too is, when we see a lot of business owners about — talking about retirement — most business owners will stay in their business longer than an employee. An employee may work till 60, 65; a business owner can be in their 70s. Well, if that's the case, their children are often in their 40s and 50s and they've created a career for themselves. They don't necessarily want to give up the career they did all their lives to

15:39enter something brand new to them, which is mom or dad's business. You know, so the intention is there — "Hey, I want to pass this on to my kids" — but often the kids don't want to do it. Yeah. So, you know, that's where the conversations — unless the kid grew up in the business and is part of it, you know, and they were actively involved in it, they often don't want to just jump into mom or dad's business. Yeah. So, we even had clients say to us — I

16:12said, "So, if you were to die or you were to retire, who would take over the business?" "Oh, my son, my son Daniel." "Okay, have you had that conversation with Daniel?" "Well, sure." "Well, really?" "Well, I'm sure he would." "Okay, well, let's talk to Daniel." We bring Daniel in. "Daniel, you take over this business?" "No." "Oh, when did that change?" "Oh, maybe five years ago, but we haven't talked about it." So, having those conversations — you know, yeah, like so many layers to those situations. People make assumptions

16:44and they don't realize things change. Yes. Yeah. We find sometimes the easier conversation is, "Who's in your management team right now? Would they buy you out? Can you create some structure to allow your management team to buy you out?" Because then the business is functioning, they know what they're doing, they're just running it. And the business is usually more successful than if you bring in a stranger to the business — even though it's your kid who knows nothing about what's going on on

17:12the day-to-day business. Yeah. So, like your comment earlier, Peter, about, you know, my business — and there's so many programs out there that people follow like it's their Bible, you know, like Traction or whatever else. I mean, there are many other models. But it's to have the business operate and you as an owner can be sort of outside this living organism — but you're outside of it. Right? You're able to look at it with a, you know, a 10-storey view and you're able to

17:40make decisions and you're able to circulate and have relationships with management and people. But to get a business to that point takes a lot of — just a strong foundation and structure and so much help from the outside to navigate to get to that point. Like, I just feel like in my experience there's so many — you know, maybe the construction sector is maybe the same as other industries or I'm not sure in this regard, or different. But, you know, I don't know,

18:12worse or better, but it's just like business owners that are so tied up, so consumed by what the business demands of them as the owner and the president and the CEO, that they don't even have time to be out talking with gentlemen like yourself on things that need to be started now, so that in 10 years' time it flows — you know, it flows. That they just don't even have the time, the capacity, to think that way. Yeah. And we find our most successful

18:39business owners — you know, they're not the ones that are sitting in their office. They're on the shop floor. You know, they're showing their skilled trades how to build windows, or they're understanding their products, they're talking to their customers. There's always something in their mind that they feel they're missing — administratively, or from a planning perspective. So yeah, they can't sit still, they're out there constantly. Yeah. When I worked for Sears, the district manager at the time gave me a little tip

19:10and they said, "If your office is really clean, he won't like you. If your office is a mess and you're on the floor with the customers and your staff and you're out there helping" — yeah, get your sleeves rolled up — he said, "He'll like you." Guess I get along great with him. So, how clean is your office? I know where you're going. So maybe we can dive into some technical financial pillars. I know we want to get some of this info to, you know, business owners that are tuning in

19:39and our followers. We can start with RRSPs. I know you guys were saying earlier that people shouldn't feel badly if they have unused RRSPs or unused RRSP room. Is that — am I correct in saying that? What's your — I'd say, you know, a lot of people when they look at their tax return, or they see their notice of assessment once their taxes are done, they don't necessarily understand the numbers exactly as they should, or they understand them and maybe they take a

20:11spin on them they shouldn't. So in other words, RRSP room — like you said — if you have salary, I'll talk about corporation income splitting, but if you have salary, you're earning income. 18% of that, to a limit, creates what we call your RRSP room — Registered Retirement Savings Plan. You're allowed to put money into your RRSP and it's a tax-deductible expense, so you're reducing your income right away, and then when you withdraw the money down the road you're going to pay tax on it. So sometimes we

20:42have situations where we find people end up with too much money in RRSPs, or they have too much income from other sources in retirement — so maybe RRSPs aren't the best thing. So it used to be very simple because there were really only a few options, but now there are a lot more to choose from — maybe not the best thing. So people shouldn't feel badly, like I said, if they haven't maximized their RRSPs. And they may use that deduction down the road if they sell their business and

21:09they have a huge capital gain that they can't shelter — then it comes in huge value. Anything to add there? I was just going to say, giving an example — a client I was speaking with yesterday. They are a business owner, they are in their late 60s, and the talk was they're starting to slow down in terms of what they do for active business, and they've got money built up in the business. And I said, "We need to create a strategy of how are you

21:40going to pull money from the business?" Because we need to balance that off against pulling money out of your RRSPs, because when you turn 72 you're going to be forced to take money out of your RRSPs. And based on what he had in RRSPs, it's going to create roughly another $55,000 worth of income. And he has pension income, CPP, and OAS. So now it becomes — you know, is it dividend income? And should we hold off on pulling money out of your RRSPs so you could pull more

22:09money out of your company right now? Or are we going to pull more out of RRSPs and delay taking money out of the company right now? Those are the types of questions that we start having conversations about. You know, it's trying to create the most optimal situation possible. And there's a difference between when the company is active and when it's no longer functioning. You know, he's getting to the stage where he's not doing contracts anymore — it's not as much of an active business anymore — and, you know, like I

22:37said to him, right now you're not really running — or you're slowing down. There's going to come a time when you're not really running an active business, but you have to pay an accountant every year to do your corporate tax return for a business that's not even active, because there are still assets in there that are generating income. And so, you know, we're having this talk about how do we start liquidating it. You know, and this isn't one of those types of businesses that you'll sell and

23:06move on to the next generation. This is, you know, a sole business — it's a service-related business, it's going to live and die with him. But it becomes, you know, there are more complications than your average employee, because there are multiple sources and we're trying to figure out what's the best for retirement income. Yeah. And a lot of individuals like this situation you're speaking of now would have, you know, a different situation than others — it depends where you

23:34fit in the financial scheme. But when it comes to pension, you know, they're not necessarily paying into a pension as an owner. So then you have the topic of — sorry, you have the topic of individual pension plans, and how important they are in certain situations. And that's a big topic for those individuals. Yeah. A lot of people — we find a lot of people haven't heard of an IPP. They don't really understand how it works, but, you know, it's a bit complicated.

24:01But essentially, you can deduct more money, deduct more income — you can have a larger deduction than you could for an RRSP. So it's attractive in that sense, and it does provide a lifetime income stream when you retire. So it's a very interesting concept and one that a lot of people haven't heard about that we're happy to discuss with people. Right. What about when it comes to dividends versus salary, and sort of how to juggle between the two? I think a lot of people owning a

24:32business — you're going to pay yourself a salary, pay yourself well. It's not worth it when you're not able to pay yourself well. But how to sort of juggle the two, and maybe how many dividends to take out depending on your year and the profit that's made that year, or loss — and how to navigate that. Yeah. Like, the conversation — we'll often have conversations with our clients' accountants as well. You know, we want to be on

24:58board, everybody working together to try to determine what's the most optimal situation. So I'll give you an example — you'll have some clients, they will pull money out as salary because they do want to create some taxable income. That creates RRSP room, it creates CPP contributions, you know, they want to deal with that up to a certain range. But then they also want to have dividend income as well — okay, which is preferentially taxed. The — no, it's taxed less than salary income. The salary

25:37income — like, I'll give you an example. For some clients, if all you do is take out dividend income, that does not create RRSP room. So for some clients they actually want to create RRSP-eligible room. It may be — I'll give you an example. Business owner, his wife's not involved in the business, so he wants to create some salary for himself. He creates some RRSP-eligible room for himself, and he makes RRSP contributions to what's called a spousal RRSP. So he gets the deduction, his wife is

26:15getting the money, and it's a way for him to do income splitting over time. So, you know, we'll create a whole bunch of different strategies depending on what the situation is of that business and what makes the most sense. The other issue that — I know we were talking earlier — we wanted to bring up was just wealth insurance. And you know, when most people think of life insurance, I feel like they think of, you know, if you die unexpectedly or if you

26:41die early — this is going to make sure that, you know, I'm covered, my assets are covered, expenses and those kind of things, to protect your loved ones. And that. But it's also, you know, used to shelter from taxation. And so there's this dual point of view there. Maybe just a few comments on that. Yeah, we — you know, I think the first thing to establish is who owns that insurance. So a lot of people that we deal with, you know,

27:13they have life insurance, and a lot of times we find it's not personally owned — or, it's personally owned. Well, it could be owned by the corporation in some cases. Sometimes that makes a lot of sense because you're using — it's a deductible expense to the business versus paying it out of personal income. So there are some things, just from the start, as to where this policy would even exist now. Yeah, you're absolutely right, Daniel. You know, a lot of people think insurance is, "If something happens, if I

27:40die, you know, if I'm disabled, if I can't work, if I get cancer, if I get sick — it's 'if.'" But the reality of it is, you know, a lot of people — we will die. We don't think of that. But the biggest tax shelter that really is out there in this country is life insurance. So certain types of life insurance — you basically purchase insurance and the additional money that you pay into the policy becomes a tax-sheltered

28:12investment. So it's really two separate pieces. We can get into more detail, but essentially it's money that you could access at different points in time, and you don't have to be — obviously you can be living, you can still be paying premiums, you can still be working — so it can be used as a bit of a financial cushion in some situations. So they're a very flexible way — a lot more flexible than we've ever had before. So they're great vehicles. I was just going to say, before

28:40TFSAs were created, there wasn't really a way to shelter money from taxation from an investment perspective. What would happen with investments is you'd be taxed every year on the growth or the interest that's being created. Using what we'll call wealth insurance — so it's having insurance that has an investment component in it — the money that's invested is actually sheltered until you eventually take it out. And even then, if it's paid as a death benefit, it may never be taxed. But it was a business

29:16owner's way — or even an individual's way — to have money saved up in a tax-sheltered vehicle for many, many years, and then they could draw down on that in retirement if they need it. Like, like — TFSA should be called a tax-free investment account. Correct? Yeah. We're going to take that from you — I like that. Yeah. TFSA, and that's a big one. TFSAs are — I mean, you know, arguably probably the best thing we've ever seen in our country as far as tax saving.

29:45You know, a lot of people, just like you said, they feel their savings accounts. But I mean, the informed investor may own stocks or managed products — there's — most things they can own in an RRSP are also qualified to be held in a TFSA. So some of our clients will say, "Yes, I've got an inheritance." Say you get, you know, 500 shares of Royal Bank. "What do I do with this?" "Well, did you know you can put that in a TFSA?" "Oh wow!" Well, then you'll never pay

30:16tax on the gains as those share prices rise — assuming they do — and all the dividends, all the income or interest, all those things, non-taxable. And when you take that money out, or you die, or it's withdrawn at any point in time, it's completely tax-free. And the neat part about it is, if you leave a beneficiary, then it doesn't enter your estate, so it's private. So some of our clients will say, you know, "One of our children, she was so responsible, she never asked us for any money," and

30:46"we gave the boys money all the way along, and we want to do something special for her. But we'd hate to see the estate give her a higher percentage, like we want the kids to think they're all being treated equally." With this vehicle — yes, we can — you can leave part or all of your TFSA to one of your children. It's private. None of the other children know that that happened.

31:10So it's a way to simply balance an estate. So these TFSAs — the tools are endless. Yeah. What we find is, even though TFSAs have been here for more than 10 years, there's a real lack of education on how they can be used. You know, and it's one of the things Peter and I focus on — is trying to assist clients so they understand the benefits of a TFSA and how it could properly be used. You know, a client I spoke to last week has two TFSAs — one

31:39at a bank, one with us. And they said the comment to me, "Aaron, the one at the bank made them like $35 last year, and the account's right there, and ours did, you know, thousands of dollars." And I said, "Well, what's it invested in?" And their comment was, "A TFSA." And they couldn't understand — well, why did ours grow so much and theirs didn't? And what class, or what part of the market? So yeah. So the description becomes — you know, often what I use is just this analogy. I said, "Think

32:06of the TFSA as just a box. Inside the box you could put many different things. Often the default is cash, and as you know, banks don't like to pay a lot on cash deposits. Think of your checking account or savings account — that's what you're probably in at the bank, is just cash. That's why you're not earning anything." What we've done is we've looked at other investments, whether it's mutual funds, stocks, bonds, other things that have more growth potential. Last year was a decent year in the markets — you did far

32:37better than what cash was paying. You know, so they didn't understand just the differences between what's available at each institution. And then the comeback question was, "Well, why didn't the bank ever tell me this?" And I said, "Well, that's a question you should ask them." You know, but what we find is that their role — into educating clients — it's often just to sell a product and move on. And, for sure, you know, so we spend more time with our clients. Like, financial intermediaries — it's

33:06not like their goal is always to educate their clients. Not their goal — ever — to do that, right? They make billions in profit. Has their own interests, you know. Pun intended. Yeah. So I mean, we will spend more time educating our clients and going through options and making sure it's a well-informed decision of what they're going into, so they actually understand what the long-term benefits of a TFSA could be, or any other investment vehicle. And you know, just a comment:

33:31like, the banks are fantastic. Financial fiduciaries — I mean, they're great places to do business. It's just, we have to remember what everyone's expectations are. So, you know, I say to some people, "We want to talk to your accountant, we want to meet your accountant. And we're not in competition with your accountant. We're on the tax planning side; your accountant's on the tax preparation side." So typically, accountants — people will be disgruntled

34:01because they didn't get any advice. I said, "Well, maybe that's not your accountant's job. You need to ask your accountant what their role is." And a lot of accountants say, "Well, our role is to prepare your taxes efficiently and do a great job." Wonderful. "Do you guys do tax planning?" "Not really." "Do you have a financial advisor?" "Yes." That's where we come in. So we work with the accountants — it's a team. Right. We talk to the corporate banker,

34:26talk to the banker and say, "Hey, there's a million dollars in cash in this account. We noticed that — but after looking at the financial statements, there's always been at least a million dollars in this account and it's really not earning any interest." And the banker will say, "Well, yeah, that account isn't designed to really hold money, and, you know, now that we've looked at it — we don't know when the client's going to need money, so we wouldn't advise them to do anything else

34:49with it." So a lot of times it's just a lack of internal communication. And there isn't really a real team. So we try to pull that team, build that team, bring that team together. And often times it doesn't even involve — you know, the idea bouncing around doesn't necessarily involve the client. We all get together and have our conversations, we go back to the client and say, "Look, there are two options on the table. You know, I've talked to the bank or commercial banker, we've talked to your lawyer,

35:14your accountant, and this is what we all agree on — do you want to do option one or two?" So it's that synergy that we find is missing in a lot of cases. Yeah. So yeah, it's interesting you make that point — like, you know, what is your accountant's job? What's the expectation of their role? I think a lot of entrepreneurs with that entrepreneurial spirit, you know, they started their own thing — they might have a preconceived notion of, "Hey, what's my accountant doing?" But that's different

35:40from a financial planner. It's yet different from a lawyer. It's yet different from the person keeping your books — on that scale of credits and debits and just keeping track of billing and all that sort of thing. And everybody grows too, you know — people grow and they specialize. And so it's good to have that update, you know, to bring people together and say, "Has anybody changed roles? Is anybody doing something different? Can you bring more to the table?" And so we find that of great

36:07value when those conversations happen. And I mean, Aaron made the comment earlier about how people aren't as well educated about these things as they should be. It made me think of a — I think I have the term correct — it's Moore's Law. But not that one, where what the worst thing that can happen will happen — but just, every 14 months, you know, in the tech world, something that comes to the market is kind of like old news and now it's obsolete. But even financial

36:31engineering and some of the topics that you're discussing here — I mean, it's constantly changing. And I think a lot of people who are in an ownership role, whether it's big where you have a board to answer to, a corporate environment, or whether it's, you know, a smaller business where you have your CFO and your operations managers and things — you almost, it's almost like financially, a lot of us — and I'm speaking on behalf of men, of course — but, you know, we feel like financially we're failing

37:03— even if we're making money as a business. But even if we're making money, are we not sure exactly what I should be doing? And should I know all that? And can I know all that? Can I stay on top of it all? Because I'm here, you know, trying to make a vision come to life and I'm not supposed to know all this stuff. I need help. I will — I'll go off of your comments here. We never try to make a client feel bad because they didn't know this information — we wouldn't expect them to.

37:27No, not saying you do, but a lot of people have underlying — exactly. But the common — I will say to a business owner — let's say you have a home builder, for example. If I'm talking to him, I'm not going to say, "I know everything about home building." That's your expertise. I wouldn't expect you to know everything about financial planning. Yeah. This is the point I'm trying to make, though. I think a lot of owners —

37:55whether or not they specialize in home building, or it's an architecture firm, or it's a GC — yeah, like, doesn't — you know, there's this feeling sometimes that "I'm supposed to know everything about finances." Yeah, we say that exactly. You know, between Peter and myself, we have over 50 years of experience in this field. And we're constantly taking courses and being updated on changes in tax law and investments and everything. How could you keep up with that if that's not your role? Your role

38:30is building houses. You know, so don't ever fear, don't ever feel that you don't know something. This is why we're the sounding board. It'd be the same thing — you don't know everything about medicine, that's why you go to your doctor. Right. And that — but I'm bringing it up because I know I felt that way. And maybe I'm wrong, maybe my intuition is wrong and most people don't feel this, but I feel like it's something, a question that would be

38:56on a lot of people's minds listening in. It's more on the simple level of just not being able to ask for help when it comes to things like your finances, which men are so evidently and often judged by. Right, like, "How are your finances? Are they in order? Are you doing" — like, you know. So it's a harder thing to ask for help about. I'll say one of the things that I've seen as a change over the last

39:22especially five years — we're starting to see some specialization within the financial services industry. And we see, for example, there are many women financial planners who are targeting women as clients, and the reason for it is because other women say that they feel embarrassed, ashamed, whatever — that if they're talking to a male financial planner, is he going to talk down to them? You know, and they want to create an atmosphere where it's comfortable. We're trying to do the same — we're trying to say, even, like, we know men can be

40:01incredibly stubborn, and we know there's this feeling of failure, you know, as you mentioned — of not knowing. And we try to break down those barriers to say, "Listen, we're here as partners. Think of us like your accountant, think of us like your doctor. We're a sounding board for you. You don't have to know everything. Okay, we'll find out the answers. Think of us as part of your management team — we're going to find the answers for you." So that's how we try to

40:29break it down for them. Yeah. And Aaron's got a good point there. I mean, once — we really want to know is, what do you feel you don't know? Because what's the unknown? What are you afraid of? Or what would you feel more confident knowing more about? You know, what would put you more at ease? Or what would make you feel that you've really got things under control? Because having control over your life — and feeling and knowing that you're in

40:56control — you really probably can't do it on your own if you're a very successful business owner. You know, no one does it on their own. No. Nothing big or great is built that way — no one ever does something completely by themselves. The more of a team you have. So we're the financial quarterbacks. So, you know, it's funny — we talked to a client the other day and she said — I said, "What's on your mind?" and she said, "Well, it's nothing to do with what

41:20we normally talk about." I said, "What is it?" She said, "Well, my kids — I want to help my kids get their own homes." And I said, "Oh, let's talk about the new program that came out last year — the First Home Savings Account." I said, "It's fantastic. The kids can put up to $8,000 a year in it. It's tax-deductible, like putting money into an RRSP. But," I said, "when the money comes out to buy a house, the capital, the growth,

41:43interest, anything that's made — completely tax-free." I mean, this is revolutionary. You know, TFSAs have their place, but these new savings plans — this is something that just came out last year. Yeah, just came out last year. National provincial revenue Canada. Yeah, it's fantastic and it's an amazing program. The limit's $40,000 — $8,000 per year, five years would take you to max. The other one that came up with another client — another professional woman that we work with — she said, "You know, I want to do something for my

42:15grandkids." And I just said, "Well, tell me more about your grandkids." We just found out that one of them is on the spectrum for autism. So in his case, we actually had the spouse apply for the disability tax credit, and then we said, "Now you can have an RDSP," and here's a program where the government's giving thousands of dollars a year of free money. So a lot of times it's just asking questions. And what does that stand for? Registered Disability Savings Plan. So, you know,

42:49and not — you don't see that grandchild as disabled, or you don't see that child as — but if they do have a disability and the federal government recognizes it, then that opens a whole bunch of other doors. So the more we know about people — they shouldn't expect to know things, they should expect to tell us things and ask questions and tell us their situation — and the expectation would be for us to come forward with the solutions and the ideas to handle those situations. I'll give

43:17you another example, and this is why when I said things change rapidly — last December, there was an announcement for a new Canada Dental Plan. So the federal government will pay for your dental care, and you could start applying this year, starting with seniors, and then the general public that's under age 65 will be allowed to start applying in 2025. There hasn't been a lot of news about it, people don't know the details. I had a discussion with a client a short while ago about it, and it's

43:51for households with income less than $90,000 — will have part or all of their dental expenses paid for under the program. But there's a tier — it's, you know, there's a co-pay if you earn between $80,000 and $90,000, there's another co-pay if it's between $70,000 and $80,000. So, like I said, this was just announced in December. It's not well known. Now it becomes a tax issue for Peter and myself to say, as we're talking with clients, do we want to make sure that their income stays below that $90,000 threshold so

44:24they still qualify for part of this dental program? Is that important to them? Does it even have an impact? Does it matter to them? You know, so things change rapidly and we have to keep abreast of it. Yeah. What blew me away about that one, Aaron, was — I, until you told me, I would have assumed that that would have been based on the current year income, yeah — and the first applications are based on the 2022 income. 2022! I mean, and we're in 2024. Really. You know, the other

44:51one that came up too, and a little surprise for some people — we reached out to clients. We do a lot of work with trusts. A lot of people think a trust has to be formally set up and it has to be complicated, but we have situations where our client will say, "Well, yeah, I want to get my son or my daughter into a house, and I think I'll give them a head

45:15start on that, especially with the housing prices now. But I want to be a joint owner of that house because, you know, I'm going to put up the capital to get them in there." Well, that's effectively a trust. You know, as simple as something — a will. I'll say, "Oh, how's your mom? You know, are you helping her?" "Oh, actually yes, Mom and I — I'm helping her pay her bills now." I said, "Oh, did you become a joint owner in her bank account?" "Oh yes, yes, the bank recommended

45:39I do that." I said, "Do you know you're in a trust? You're now in a trust relationship." CRA, just a few weeks ago, said that you have to report any trust ownership on your tax return — 2023 — this is in March/April of 2024. You know, and that was never something — it wasn't in the news, you know, barely heard about it. But we hear about these things. Now, Revenue Canada did say, "Okay, we're going to set this aside for a year."

46:11And, you know, but again, this is what we do — we bring these things to people's attention. Yeah. No, it's, for sure. Like, I mean, even just thinking about people listening in, when it comes to finances — and of course, on your side, I think you guys have helped so many people personally, here locally, in the province of Nova Scotia — so many businesses, big or small. I mean, a lot of times you're dealing with certain aspects of financial advisory when it

46:41comes to businesses that are $20 million-plus, or in that range. But then lots of startups — I know for a fact you guys take on just about anybody who comes your way, as much as you can. But, you know, for people listening in, obviously with our audience from the building sector — but that doesn't narrow it down very much, does it? I mean, it incorporates a lot of different people from a lot of different backgrounds on the business end. Right. So

47:06like, you know, what I hope is that people, when they hear just little snippets and some of these nuggets of knowledge, will reach out. But for you gentlemen, like, who's the ideal — would you say — client that you're able to bring the most value to? Or is there one? I mean, it's not like you can narrow it down a whole lot. I think everybody needs some degree of advice. So often times we'll say to

47:35people, "I think we understand your situation. I think you're best served by your banker, because maybe it's a lending situation, or a debt consolidation, or restructuring, or something of that nature." We may say to someone, "Your first stop is an accountant, and here are four accountants that our clients have been satisfied with over the years — talk to one of them. They're the ones that are going to solve this problem for you." You know, so we have the contacts of people —

48:06lawyers, accountants — and we even have about 26 of them in our head office that we can talk to for fairly straightforward questions. But most of our clients, where we provide, I think, the most value, is business owners who are not confident that they have a succession plan. And the way that I would suggest a business owner would come to that conclusion would be to say: if you were on vacation for the next three weeks or the next month, what would happen to the business? Would you be

48:35stressed out the entire time? Would the business fall apart? Would revenue stop coming in? Like, how crucial is your role? Okay. And if you're — you know, you have to remember, you could sell your business any day. Any day you die is when your business is basically sold, unless you have partners or a family relationship going on. So, people who feel that maybe they're not prepared — they're not prepared for either death, or they're not prepared for retirement. Or, you know, if

49:07they died, their business would collapse, or if they were on vacation it would collapse — okay, then we need to talk about planning. We need to get in there and say, "Okay, how can we organize things? How can we add value? How can we create a backup team to jump in when an unplanned event occurs, or when you decide to retire?" And a lot of times, people will say — "Gee, I've got a health concern, a health issue," and they

49:33see their doctor and a specialist, and someone says, "You know, you've got cancer," and then you realize, "Hey, maybe this is my calling to retire." You know, a lot of people have life events — a friend dies, a close friend they've had for 30 years passes away, and it's like, "Wow, that could happen to me." Right. So we want to talk to people who have questions and have doubts, or have areas of concern. Or even, we want to talk to people who

50:00think they have everything together, because sometimes we learn from that too. But I mean, I spoke to a gentleman and his wife two weeks ago — they have a large, well-known business in the metro area. And I said — they said, "What can you tell us?" And I looked at it and I said, "You know, I think you've got everything done perfectly. From what I've looked at — your wills, your trust, your multiple wills, the whole situation — I said, "You really got this nailed down." And I

50:25threw a few little things out there and they said, "Gee, we never thought of that." I said, "Yeah, it's not huge, but it's something that you might want to look at." So by and large they had a really good plan. So other people, they just don't know where to start. Like, they have no — they just say, "Look, I don't know anything about any of this." Yeah, you know. Or things have gone off the rails, or things are so

50:50consuming within the business that they just don't know what to do. Exactly. So just give us a call. And sometimes it's a meeting at 6:30 or 7:30 in the morning, you know — that's when it is. Or it's on an evening, when everybody's gone home. It's like, "Okay, nine o'clock, we'll talk for an hour." Any final comments? Yeah, just — I fully agree with what Peter said. You know, it always amazes me how

51:17few people have current wills in place. You know, as an example, we meet people all the time and they don't have a will. And we say, "Okay, what happens when the business goes? Who's going to go to the government to get permission to deal with all of your stuff?" Like, this is a simple document that needs to be done. Or the will was done when their kids were two, and their kids are now 30 — you know, and they've never looked at it since. And

51:46their business has completely changed over the last 28 years. And it's like, it's one of the primary documents — just make sure it's up to date. You know, if you really want your wishes handled properly, make sure it's written down. And that's where you do it, in most cases. So, some people feel too that their excuse for not doing a will or not having a succession plan is, "There's so much in motion — it's always changing." You know, and we sit back and say, "Well, yeah,

52:13not necessarily." I mean, you can have a will and an estate plan done, but you can easily change the beneficiary on your RRSP, you can change it by percentages, amounts — you know, you can change a beneficiary of your TFSA. And often times we recommend that clients don't have those things listed — anything that you own: insurance policies, tax-free savings accounts, RRSPs, RRIFs — none of those things should be named in your will in a lot of situations. You can just say, "When I die, the assets I have in my

52:43name go to" — percentages, or X amounts — you know, and we usually like percentages. And then you don't have to mention other things, because those things can be directly left to the beneficiaries you want them to go to. It avoids probate. Sometimes probate shouldn't be avoided, or shouldn't be shied away from; other times it's wise to do it. So there really shouldn't be an excuse. You know, you just make that excuse someone else's problem — put that on me, or put that on your lawyer, or someone. Aaron —

53:15we'll help you mitigate that and get there. Well, it's always a pleasure chatting with you, Aaron, Peter. Thanks for being here, and obviously we've got a lot more topics on the financial front to discuss in the coming months, and it's always educational for me, and hopefully our listeners, our audience, will reach out on some of these key points — especially the ones that are really needing that help. Their

53:39business needs the help, they need it personally to sleep better at night, and to arrange things and get on the right track. And we want to say thank you too for the folks that have reached out — we've had a lot of conversations and some responded to emails and a couple of Teams calls, and we've done those virtual calls with people who've reached out. You know, and we haven't had a stupid question yet — they've all been good questions — and we're happy to talk to people, and to confirm they're

54:06doing the right thing, or send them to the person they need to go to. And there's never a charge for that, so — we don't charge anybody that way. And so if people want to talk — like I said, no one — people have been saying to me, "When do I get my invoice?" And I said, "No, we'll just talk about that another time. You're fine, just follow these steps and let's get going here." So it's been great to talk to people, and we're here to help.

54:31Thank you. Awesome. And we greatly appreciate your time, Dan. He always — always, always an honor to talk to you guys. Thanks! Cheers! Cheers!