You Are Paying More Taxes Than Needed (SECRETS for Canadian Businesses)

We break down two major Canadian corporate tax advantages—the small business deduction (up to $500,000 of active income when passive income is under $50,000) and the capital dividend account (CDA)—and explain what counts as active vs. passive income for a Canadian-controlled private corporation. We review why Ottawa changed corporate tax rules in 2018, how passive income is taxed at roughly 50%, and how earning more than $50,000 of passive income can claw back the small business deduction, with the deduction eliminated at $150,000 of passive income. 

We discuss how passive income in a holding company can still affect associated operating companies, the role of refundable dividend tax on hand (RDTOH), and why excess corporate cash needs a plan. We also outline tax-code strategies such as participating whole life insurance (tax-exempt growth and CDA benefits), corporate-owned critical illness with return of premium, and individual pension plans, plus using insurance to fund buy-sell agreements and avoid forced partnerships.

00:00 Biggest Corporate Tax Breaks
00:49 Active vs Passive Income
02:00 Why Rules Changed in 2018
05:39 Punitive Passive Tax Rates
08:58 SBD Clawback Explained
10:34 Holdco Does Not Shield
14:04 RDTOH and Integration
16:24 Common Mistakes and LCGE Risk
20:53 Tax Code Solutions Overview
22:09 Permanent Insurance Strategy
24:40 Capital Dividend Account Basics
28:07 Accessing Cash and Deductions
31:04 Critical Illness Return Premium
33:43 Funding Buy Sell Agreements
37:00 Final Call to Action

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Transcript

SPEAKER_00 0:00

Two of the greatest tax benefits that we have in this country one is the small business deduction that we just talked about, which is huge advantage to the small business owner making up to $500,000 and passive income less than $50,000. Huge advantage. The other huge advantage is the capital dividend account. So how many small business owners know anything about the capital dividend account? I've taught I talked to many, many, many, and very few know what it is. Some have heard of it, some have not. Very few actually understand it. So the capital dividend account is the second greatest advantage that we have here in Canada regarding taxes, especially with a corporation.

SPEAKER_01 0:49

Today we're just going to break down what passive income actually is, why Ottawa changed the rules, how a 50,000 threshold works, what happens when you cross it, and some planning concepts business owners should at least be aware of. Examples of active business income, you know, you're selling products, you're providing services, you're in the construction business and you're constructing, you're farming, you're consulting, you're running a clinic, you're running a trade business, all of that constitutes active business income. That's fairly simple. Now, the trick here is that in the eyes of CRA, you also have passive income, and that would be things like interest on investments, GIC income, rental income, portfolio dividends, capital gains.

SPEAKER_00 1:48

So the reason that it's important to understand the difference between active and passive income inside a Canadian-controlled private corporation is the way it's taxed. So that is what makes all the difference. So in 2018, the government introduced new rules for corporations and how they're taxed. And the impetus behind that was they wanted to make taxation fair between business owners and typical T4 employees. So they felt like T4 employees were being taxed more than business owners. And one of the key reasons to have a business is for the tax advantages. Right? Liability is one. Liability protection is one big reason to incorporate. The other is for taxation. So inside a corporation, you can have a lot more control over your taxation. It is tax deferral. It's not tax avoidance, it's tax deferral. But you have control on when you can determine you want to defer tax or not defer tax.

SPEAKER_01 3:04

So when you declare an income, when you declare a dividend or whatever, right?

SPEAKER_00 3:09

Right. So if you want to take money out of your corporation to use it personally, then it's taxed personally. And inside the corporation, it's taxed as a corporation. And then you can decide when and if you want to take that money out of the corporation. The key point there is if you have money left inside the corporation, right? Um retained earnings is generally how it's termed. If you maintain retained earnings, you have profits and you keep them inside the business, but they are taxed differently than that active income that you're that you're you know, the key part of your business, what you actually do, that income is taxed very favorably. So this it's a huge, huge difference, and it's important to understand. So one of the key benefits of a private corporation is, as you mentioned, the small business deduction. So all income, all active income, up to $500,000 per year is receives the small business deduction. And the difference is you can with the small business deduction, you're paying anywhere from 9 to 12 percent tax on that first 500,000. Anything above that, you're being taxed at anywhere between 23 and 31 percent.

SPEAKER_01 4:35

Yeah, and we're saying those ranges depending on the province.

SPEAKER_00 4:39

Correct, exactly right. It all depends on what province you're in. So the tax rates are different in each province. So that makes a huge difference. And the whole idea behind the small business deduction is so that small businesses can flourish. And it helps our economy. It helps everyone if all of if our small business community is flourishing, profiting, hiring, spending, it's the backbone of our economy, right?

SPEAKER_01 5:06

Well, that's about 90% of the employment in Canada is provided by the small businesses.

SPEAKER_00 5:13

Exactly, small to medium businesses, exactly right. Excuse me. So it's key, right? And that's the whole impetus behind the small business deduction. But in 2018, they changed the rules. So if you retain your earnings and keep them inside your corporation, whether it's sitting in a savings account, whether you invest that money into something, or whatever, you know, whatever it is, if it's possibly earning income, it's not part of your active business, but it's a passive income source, that is taxed at 50%.

SPEAKER_01 5:54

So it doesn't matter. Like there's no there's no brackets, it's 50 right away.

SPEAKER_00 6:01

Yeah, I mean each again, each province is slightly different, but generally speaking, it's very close to 50%, either slightly under or slightly above, right? It's very close to 50%. So all that hard-earned money, you're you know, you're growing this business, you're working hard, you've got some profit, you have retained earnings. That's that that's awesome, that's excellent. But now the government can take 50% of any growth on that money.

SPEAKER_01 6:31

It's insane. Well, it's absolutely yeah, yeah, absolutely. And you have to think in, you know, in a in a capitalist society, I mean that the way like the the economic engine of any country, and a huge reason why we have and enjoy the standard of living that we have here in North America, it's because the small businesses. So these are the your entrepreneurs, these are the people solving problems, making your life easier, making your life more comfortable. They are the reason why. So in in in in any any state, any government that you know, and and there's always like a fine line between how much taxation they allow it and how much and how punitive that is. Like it's it's always like a like a like a fine line because if you are to tax those that that that sector of the economy, those creators, those service providers, if you are to tax them too much, they just leave.

SPEAKER_00 7:52

Yeah.

SPEAKER_01 7:52

Right. And again, we're saying 90%, up close to 90% of the employment in Canada is provided by the small businesses. So you definitely want to keep them happy. And in 2018, it was one of those one of those steps where you know it it is it didn't make it easier for any entrepreneur to say, hey, I want to do business in Canada. Apart from that, we have been having talks about increasing the capital gains inclusion rate, also that's still up in the air. So those two are like very key attacks towards that sector of the productive economy, which again is key to our welfare.

SPEAKER_00 8:38

So yeah. So so it's a punitive tax on any passive income that it's inside your corporation. So it's it's a it's critically important for the business owner to understand what's happening, right? And get good tax advice. Absolutely. The other thing is so not only is that is there that 50% tax rate on passive income, if you make too much money passively, they start clawing back the small business deduction.

SPEAKER_01 9:13

So this becomes even more than unit change, which is five dollars per every dollar that you're above that threshold. And once you get to $150,000 of passive income per year, you lose it completely by a small business deduction.

SPEAKER_00 9:32

Correct. So your tax rate is going to more than double uh on your active income, right? So you're gonna pay 50% on the passive. Well, now they're gonna start hitting your active income because you made too much passive income.

SPEAKER_01 9:48

Yeah, for the sin of passive income, man.

SPEAKER_00 9:51

So anything above $50,000 a year in passive income, you they start clawing back, right? Like as you said, five dollars for every one over. So that becomes extremely punitive. So now the business owner has to think differently. How can I do this differently? I how can I save more, keep more, and be able to grow my business in a way that makes sense, and I don't give half of it away to the government or more than half sometimes. So it's it's extremely important for business owners to understand what's happening.

SPEAKER_01 10:34

Absolutely. And what another key uh aspect that I I want to bring up is that you know, for those business owners that have corporate structures where you have holding companies and opcos, that doesn't necessarily shield you from this. So a lot of people think that, oh yeah, well, no problem. You know, I'm I'm just gonna have all my passive income inside of the whole call, and the opcos are gonna handle the active income. Well, CRA doesn't agree with that, and so it just affects the whole corporate environment that that you may have set up. So that's also good to keep in mind.

SPEAKER_00 11:20

So so then the question is what can the small business owner do? What can you do differently? Because like you said, corporate structure may or may not help you. There are there are advantages for different corporate structures, and holding companies do have a place for sure. But if those companies are related, then it doesn't matter. You know, passive income inside a holding company will affect all of the associated operating companies. So if there's any kind of ownership in a in an opco with a holdco, any amount, 25% ownership of, you know, let's say you own 50% of company A and 25% of company B, your hold co and your hold co has passive income. Well, that infects that affects both operating company A and operating company B. So that's also very, very important to understand. And you can't get up get around this problem through strictly only through corporate structure.

SPEAKER_01 12:32

Exactly. So as you can see, George, there's also like so by doing this, there's an incentive uh for the business owner to reinvest their return earnings earnings in active business operations, right? And you know, that doesn't necessarily like it, most of the time, it should be like a good thing for you to reinvest your return earnings into the operating side of the business. But on the flip side, like the other side of that coin is that as you do that, you know, the business might be getting more dependent on traditional financing channels. Because if they have to reinvest those return earnings into operations, then that those return earnings and that liquidity is not as high as you would have that into investments or you know, creating generating that passive income. So that's also something that's often disregarded, but it's it's a it's a well, it's a well, sorry, it's a it's a it's a reality where the business owner will it certainly won't have the same level of liquidity if they are actively avoiding that passive income.

SPEAKER_00 14:02

Yes. Yeah. Now, just to just to go back a little bit on on the how the passive income is taxed. So that income is taxed at around 50%. Now there is a tax ref that's refundable uh when you pay dividends. So the the R D T O H. What do what does that even stand for? I'm not even sure. But anyways, it's a it's a basically a refund of taxable dividends that that the corporation and or the individual can receive. Um so integration is designed so you don't save tax long term, you're just going to just defer it. And the other thing is that this this isn't a broken system, this is actually how it is designed. So it is designed to remove the advantage of investing passively inside a corporation. Now, you know, you may or may not agree with that, and we certainly don't like it, but this is actually how the system is designed. So what we have to do as as advisors and as business owners is really understand what's going on, some of the common mistakes that business owners are making, and then what are some potential solutions that we can avoid some of this punitive tax that we work so hard?

SPEAKER_01 15:33

The whole idea behind this is uh that it's integration, right? It's tax integration and RDTOH stands for refundable dividend tax on hand. Thank you. That's what it stands for. But it's curious how you know, instead of doing integration, you know, if the business owners already had the advantage to uh retain a way more of their passive income before 2018, then you know why don't do the same for the individual and have the individual also enjoy that? It's like, well, no, it has to be higher taxes for everybody, you know? And I mean that's valid, they could have done it the opposite, but we all know how that works.

SPEAKER_00 16:23

Yeah. So what what are some of the common mistakes? So leaving excess cash, sitting in the corporation without a plan is common and often is not considered a mistake. But really, what you're doing is you're leaving money on the table in taxation and in also in growth, depending on what what that money's sitting in. So if it's sitting in a bank account, it's really doing nothing for you. Anything you earn is taxed heavily, um, and you're probably not going to beat inflation inside of a savings account. So depending on what you're putting that money in, it's not in your best interest. So you need to have a better plan. Also, building large passive portfolios inside the operating company is going to cause extra taxation, unnecessary taxation, punitive taxation. Also, not realizing that rental income is usually considered passive income as well. Most people don't realize that. And capital gains is also considered passive income. So ignoring any of those things, and especially ignoring how close you are to that $50,000 per year threshold, is also critical and is in your best interest to pay very close attention, have your accountant pay very close attention. So unfortunately, success can quietly kill your tax advantage if you're not watching your passive income. Success can quietly kill your tax advantage if you're not watching your passive income. This is huge. So important.

SPEAKER_01 18:05

George, one key thing that uh I want to bring is the fact that these rules are meant for Canadian controlled private corporations. And you know, when you are a Canadian-controlled private corporation, this is when you actually access the small business deduction. And apart from that, you also access the lifetime capital gains exemption, which are two key things. Now, what what would be, you know, we cover the small business deduction, but are there also any concerns related to the lifetime capital gains exemption whenever we also have return earnings and passive income inside of a corporation?

SPEAKER_00 18:59

Yeah, I mean, I'm not a tax expert, but it is important to understand because you have to qualify, right? You have to qualify, and there are a number of different rules for qualification. You have to qualify for that lifetime capital gains exemption, right? So Canadian-owned can't have any foreign ownership, is one thing. Passive, active versus passive. So I believe the number is 90% of your income has to be active in order to qualify for that exemption, which is a huge factor, right? Um so there's there are different rules around all of these things, right? So it's very important to understand what those rules are and talk to the tax expert. And if you don't have a tax expert, or if your tax expert doesn't really understand and is not giving you the answers that you're looking for, then find another one. So there are people that specialize in these areas, and some are good and some are bad, just like anything else, right? We have good doctors and bad doctors, we have good everything and bad everything, right? So find the right person that's going to give you the right advice. That would be my advice. But it's important to understand all those different rules, right? Yes, yes, if you think you qualify and you actually don't, that's that's that's some harsh news that you don't want to get.

SPEAKER_01 20:30

Oh, definitely. And yeah, with that the capital gains and gains and exemption plus a small business auction, as you're saying, like this is something that as a business owner, you need to keep track of that. You need to understand how that works, because that that is just going to it can potentially have very, very negative consequences. Um I want to pivot now to the possible solutions, George. And they're more than there's more than one. There's more than one here. Those are solutions that built inside the tax code. Okay, we're not talking, we're not talking any loopholes, we're not talking any any any strange strategies or any edge cases. We're talking stuff that's well defined inside of the tax code. And one of them, for example, is permanent life insurance. Growth inside of permanent life insurance policy is one of them. Another one will be critical illness policy owned by a corporation, like split ownership between corporation and a person, and there are other advantages to such a structure for C. Another one will be the IPP Individual pension plan. The individual pension plan, yes. So those are some of the possible solutions. Could you expand on? Let's start with the the permanent insurance and You know what type of permanent insurance the business owners can use? Why would they want to do something like that? What would be the benefits?

SPEAKER_00 22:08

Yeah, absolutely. So there's a couple things. So, first of all, permanent life insurance, and in particular participating dividend paying whole life insurance, is a tax exempt product. So it has tax advantages that are written right into the tax code. So it is after tax dollars that are used to put into the policy. They will grow tax free. Right? There is cash value that is going to grow guaranteed. And it's going to be very tax advantaged and it's going to be growing tax-free. But when you want to access that money, there's a potential for a taxable event if the money you access is greater than your cost basis. The difference could be taxable. Just like with real estate, right? So when we buy and sell real estate, we sell it, but the difference between the selling price and the cost basis is our capital gain. And then we will pay tax on that difference. However, there are strategies that we can use to avoid paying that tax. Right? So permanent life insurance has the advantages of very similar to a tax-free savings account. Right? After tax dollars go in, gross tax-free, you can use it tax-free. There are ways to use it tax-free that are legal. And you and the other key part there is that you have control. You decide. You're going to have all the information up front that you make the decision what works best for you. So highly, highly tax advantaged. So when you're talking about passive income, so this is a place to put those retained earnings. That money that's sitting in your savings account doing nothing. And it's going to give you those tax advantages. It's going to grow tax-free. You can you can use it very tax advantaged and potentially tax-free. So the two of the greatest tax benefits that we have in this country one is the small business deduction that we just talked about. Huge advantage to the small business owner making up to $500,000 and passive income less than $50,000. Huge advantage. The other huge advantage is the capital dividend account. So how many small business owners know anything about the capital dividend account? I've taught I talked to many, many, many, and very few know what it is. Some have heard of it, some have not. Very few actually understand it. So the capital dividend account is another, is the second greatest advantage that we have here in Canada regarding taxes, especially with a corporation. So it's a notional account. So any capital gains tax that you don't pay, so that 50% that's not included in your income, that 50% goes into your capital dividend account. Life insurance proceeds also go into that capital dividend account. Money can come out of your corporation through that account as non-taxable dividends to your beneficiaries.

SPEAKER_01 25:52

And those two sources of income are number one, the proceeds of a life insurance policy, meaning when a life insurance policy pays a debt benefit.

SPEAKER_00 26:02

Correct. And the second one is 50% of your capital gains that you didn't pay tax on. So the non-included 50%, right? So currently the inclusion rate is 50%. So the 50% you don't pay tax on also goes into that capital dividend account.

SPEAKER_01 26:22

And that's that can flow to the shareholders. Tax-free.

SPEAKER_00 26:26

Yes, it'll be a non-taxable dividend. Yes, exactly. Exactly. So this is why planning and having good strategies is so important because you can plan for all of that. So you want to maximize your capital bonds, minimize your other sources of income that are taxed at 50%. So those are the two advantages. So life insurance provides you the advantage of the capital dividend account. You can maximize that account tax-free. Huge, huge, huge. The other thing is that the cash. So this is an asset. So you're purchasing an asset inside your corporation. It's growing in equity, it's growing in value, but it's growing tax-free. So you're not paying that punitive 50% tax rate on anything that's inside a tax uh tax-sheltered, tax-exempt insurance policy, permanent life insurance policy. So you're not paying tax. So how huge is that? You're growing your capital that you can access. It's still liquid capital. You're growing it, you're protecting it. It's guaranteed to grow. It's going to beat inflation. It's going to far, far, far beat any savings account or GIC. And it's going to be tax-free. So we have to consider that.

SPEAKER_01 27:49

It's also shelter from market volatility. We're not talking a traditional investment here. So you it's building real solid capital that you can then leverage and not liquidate. Yes. So that's that that's also part of it, right? Because the next thing will be for the business owner to ask, okay, well, awesome, but how do I use it? How do you actually access that equity?

SPEAKER_00 28:18

So there are ways, right? So um we leverage that capital, right? Um, you can use the policy loan from the insurance company, you can use the third-party lender. Um, and that's how you can access that cash tax-free into the future. Um, so there's different strategies there for sure. And you mentioned that this the CI, the split cost CI with return of premium. That return of premium is going to come to the individual on a tax-free basis. Yeah. So there are great strategies to decrease your tax burden, avoid that 50% punitive tax rate, avoid losing your small business deduction, any of it, and get the advantages of the capital dividend account and getting that money out of your corporation tax-free.

SPEAKER_01 29:11

Potentially, you know, it and it will and it will depend on and it depends on on every case, but potentially, George, the the premium paid into those policies, if those are required to secure lending from a third-party lender, that could potentially be paid with before tax dollars. So potentially. Yeah. Potentially. Yeah.

SPEAKER_00 29:37

There is the potential. You have to be careful. But generally speaking, you know, they're not going to be a tax deduction, but they can be. Yeah. So so that's those are huge advantages that um that few people uh know anything about, right? So few people know that these strategies and these advantages are out there. You know, so many people just think that they can put they just put their money in a bank account and let it sit there. But that is far from the most effective and efficient way to deploy your capital. Because your capital has value, right? Your money, your capital has value. Why does someone else's money have more value than your money? So we have to treat it like it's capital, that it has value. And we have to protect it and grow it and then use it appropriately. So these are the kinds of strategies that we help people implement into their lives. Um, and and for business owners, it's huge. It's a huge, huge advantage that's in the tax code that for whatever reason people don't know. Their accountants are not telling them about these strategies, and I don't understand why. Their certified financial planners are not telling them about these strategies. Why not? Right? Why not?

SPEAKER_01 31:03

Yeah, I want to briefly touch also into the critical endless return of premium because that's another winner, in my opinion. Like, and and essentially how, in a nutshell, how it works is that you will have like a shared ownership of a CI policy. It will be premiums for that policy will be paid 60%, usually around 60% by the corporation and 40% by the individual shareholder. So the insurance company will receive those premiums, and after about 15 to 20 years, there can happen two things. One thing, you're the you know, the shareholder is covered for critical illness, and in case they develop one of those specified illnesses, the insurance company pays the corporation a tax-free benefit for that CI policy, which can then be distributed to the shareholder as a taxable dividend. Okay, that's one.

SPEAKER_00 32:04

Yeah, or it can be used for the business to carry on while that other while that individual, usually a key person to that business, is recovering.

SPEAKER_01 32:12

Which will be the most efficient way of using this proceeds, absolutely, yeah. And then the second way is hey, you know what? 15 years passed, 20 years passed, and I'm still healthy, nothing happened. Well, guess what? All the money goes back to you, it's a return, full return on premium back to you. And the awesome part is that the 60% that was paid by the corporation flows to the person, the shareholder, tax-free. That's a huge advantage.

SPEAKER_00 32:48

Correct, correct. Now, there's no growth on that money over the years, but you will get 100% of what was paid both by the corporation and the individual. Now it's you this all had to be set up correctly, it has to be done correctly and stay within, you know, CRA guidelines, but it is absolutely a viable strategy, and it is a way to get money out of your corporation tax-free.

SPEAKER_01 33:14

Well, and and even George, and even if you, you know, there, yeah, absolutely, there's no growth, but you're getting that money tax-free from the corporation. And one key thing that's a lot of people miss out is that the peace of mind of having that CI coverage for 20 years, uh, you show up differently in life when you have that. When you know how you have you're you're being backed up by that, it's huge. So something to keep in mind also.

SPEAKER_00 33:43

Well, we you know if if if there's a if you have a partnership, so any any corporation, any business where there are partners involved, generally speaking, you're gonna have a buy-sell agreement. So you're gonna have an agreement. If something happens to one of the partners, one of the shareholders, what is going to happen? How are we gonna protect our company? Now they could, it could be, it could be premature death, it could be a critical illness, it could be a disability, right? There are a number of different ways that that individual can be taken out of the business, either permanently or for a period of time. How is the business going to carry on without them? How are you gonna function without that key person?

SPEAKER_01 34:27

Well, and the forced partnership, the forced partnerships that also bit happen right when and what what what do I'm talking about with a forced partnership? Well, now John is now partner with Mark's wife. You know, Mark passed away, and now John is partnered with Mark's wife, and Mark's wife doesn't know anything about the operations of the business, and and that's a way too common story, George.

SPEAKER_00 34:54

Yeah. So then, so so we have the buy-sell. We we want it, we want to be able to, you know, protect our business in case something happens to the key people. Well, then the next question is how are we gonna fund that? How are we gonna fund that buy-sell agreement? The best, best, best way to fund a buy-sell agreement is through permanent life insurance, critical illnesses, critical illness insurance, and disability insurance. Because all those insurances pay out tax-free to the corporation so that the corporation can carry on financially without that person. So it's a huge protection. And there and there's no better way to fund it. Like, how else are you going to fund the buy-sell? You know, do you have to liquidate assets? You know, do you borrow money from the bank? Do you um well?

SPEAKER_01 35:47

Could you even borrow money from the bank?

SPEAKER_00 35:49

But maybe not. Maybe not, because now your business is in trouble because you just lost the key person. So you may not have that option. You're absolutely right. And if you don't have cash on hand, like how how are you gonna carry on? So, yeah, I mean, the protection should not be understated. We get protection and we have all these other advantages, tax-wise and otherwise, of using these strategies and these tools. And our goal here is to let people know that these exist, because so few people know that they have these options available to them. And they've been around for hundreds of years. This isn't anything new. We're not preaching anything new. We're not telling you anything that isn't, hasn't been around for a hundred years. But so few people understand it and know it because they're they're professionals and the government and the banks and everyone else, none of them are going to tell you because it's not to their advantage.

SPEAKER_01 36:48

It is not.

SPEAKER_00 36:50

It's about education, learning, uh, researching, and finding out, you know, the best option for you.

SPEAKER_01 36:59

Excellent. George, I want to close this episode by making a call to the audience, to you that are there listening to me, and you know, you you're a successful business owner, you have income flowing. Start thinking, like, how much how much of that can I start moving from the taxable side to potentially the the first side or even the exempt side of things? How much of that? And you know, get that conversation started in your head. And yeah, let us know if you have any questions. We'll be glad to answer that. We we have a team of professionals helping us, supporting us along the way, where we'll be always be able to provide you with the best possible answer to your question. So don't hesitate.

SPEAKER_00 37:49

I would just re-emphasize how important it is to understand, get educated, understand what's happening inside your business, um, active versus passive income. What am I being taxed on? How can I decrease my tax? How can I protect my business? How can I protect my family? So there are ways, and they're very cost effective and very advantageous. So, you know, a lot of people look at insurance as a cost. Well, this is not a cost. You are depositing money into your savings account, if you will. But it is for those that are not watching. That's right. So you're you're it's growing guaranteed, and it has all the protection that you and your business and your family need.

SPEAKER_01 38:42

Yeah, you're just simply building an asset, right? It's an asset that you're building that you leverage against. It's an asset that's built in guarantees, it's an asset that has a privilege position within the Canadian tax code. That's what it is. Yep, exactly right. Awesome. Well, thank you, George, and thank you for listening. And I see you on the next episode. Thank you. See you later. This episode of the Sovereign Capitalist Podcast was provided with the understanding that the staff and contributors of Asteris Capital Advisors are not here in engaged in rendering tax, legal, or financial advice. For such matters, please consult your own tax legal or financial advisor.