URGENT ALERT: 143 million Customers Exposed in Financial Data Breach

Credit reporting company Equifax has just revealed that its databases were hacked in a large-scale breach affecting millions across the US, UK & Canada. While no hacking event is ever good news, some are easier to ignore than others – this isn’t one of them. The sensitive nature of the exposed data now requires immediate action for all those even possibly affected.

The short version: Equifax is one of the three main organizations in the US that manages & calculates credit scores. To do that effectively, they have access to almost every piece of financial data for adults in the country, plus pretty much anyone who’s lived/worked in the US. We’re talking social security, tax file numbers, drivers’ license, credit card numbers…the big stuff. On July 29, Equifax disclosed the breach, stating that hackers had repeatedly gotten in through a vulnerability in the web application from mid-May to July of this year.

If you’re an Equifax customer: As scary as all that sounds, what’s done is done. Equifax, cyber-security experts & law enforcement officials are on the case, working to minimize the long-term damage.

The best action now is to protect yourself against fallout:

  1. Go to: http://www.equifaxsecurity2017.com to see if your data may have been affected. There was some news that this site was delivering random results, but Equifax announced it has been corrected. At this stage, it’s safest to assume everyone with a credit history has been impacted, so unless that link gives a definite ‘no you’re safe’ response, continue with the following recommendations.
  2. Claim the Equifax free year of credit monitoring & identity theft insurance (if you’re a US resident). If you’re not eligible, consider sourcing your own. As the hacked data will continue to circulate for some time, also consider extending your credit monitoring for a few more years.
  3. Keep a close eye on your finances and accounts. Check for notifications of new credit applications, monitor your statements and bills, and immediately report any suspicious activity or sudden change in billing.
  4. Change all your passwords to be strong, unique and long. Any of the stolen data may give hackers a free pass into the rest of your bank accounts, email and personal information.
  5. Add two-factor authentication where possible. This is when an account demands a second layer of authentication before allowing access or changes – getting the password correct isn’t enough, the hacker would also need to get the special code sent by SMS.
  6. Consider freezing your credit report. This makes it harder for identity thieves to open accounts under your name, as access is completely restricted until you choose to un-freeze.

Proposed Changes to the Taxation of Private Corporations

On July 18, 2017, the federal Minister of Finance, Bill Morneau, announced extensive proposed changes to the taxation of private corporations in Canada.  These changes likely will impact you, and will likely result in you having to pay significantly more in taxes starting in 2018.  For more information, please visit the following links:

  1. www.cpacanada.ca/en/connecting-and-news/news/professional-news/2017/july/finance-canada-consultation
  2. www.taxpayer.com/commentaries/bill-morneau-s-attack-on-the-middle-class
  3.  www.fin.gc.ca/activty/consult/tppc-pfsp-eng.asp

These changes were proposed to ensure the wealthiest of Canadians pay their fair share of taxes.  Unfortunately, the proposed changes impact ALL private corporations, not just those that are owned by the wealthiest of Canadians.  In fact, the majority of private corporations in Canada are owned by “middle-class” Canadians, the very group of Canadians that the Government promised to protect. 

We do not believe that these proposals are fair, and are counter-productive to the Canadian economy as a whole for the following reasons:

  1. The proposals are based on the unsupportable argument that an employee and a private corporation owner should be taxed the same.  We believe that a private corporation owner carries significant additional risks and responsibilities that an employee does not, hence warrants the current tax regime;
  2. The proposals argue that spouses who are not directly involved in the business do not share in the risks and rewards of the corporation;
  3. The proposed changes casts a tax net at the wealthiest of Canadians that is so wide that it is going to catch hundreds of thousands of Canadians in the middle-class, resulting in the largest tax increase in decades to the middle-class;
  4. The proposed changes take away an important incentive for people to take risk and to innovate in Canada;
  5. The “trickle-down” effect on the economy will be far in excess of the tax revenues generated;
  6. A 75-day consultation window, in the middle of summer, is not properly consulting with the Canadians affected, especially given the changes proposed are changing tax law that has been in place for over 40 years;
  7. The proposed changes are overly complex, thus resulting in significant tax uncertainty for all impacted.

We think that you, as a private corporation owner, should be aware of these proposals and how they may affect your business, your family, and your future.  It is a very good time to contact your Member of Parliament (Pamela Goldsmith - Jones - [email protected] or 604.913.2660) to express your concerns before the consultation period ends on October 2, 2017.

Some of these proposals are scheduled to come into law on January 1, 2018, which will likely impact your 2017 tax planning decisions.  As there may be significant amendments to the proposed legislation (or hopefully abandoned altogether depending on the response from Canadians during the consultation period), we do not recommend any action with regard to your business structure at this time.  However, we will be in touch with you after the consultation period closes and once it becomes clear as to the extent of the final proposed changes.