Your presence on the web: what's best for your needs?

While Facebook and Twitter are receiving excellent visibility in the media — as they very well should — there are other options somewhat less ephemeral but nevertheless worth considering in getting your message across.

Personal websites

Options that are available at Google Sites, LinkedIn, VisualCV and the like are somewhat static, but they can help focus your message to specific audiences. I particularly like Google Sites, as you can create multiple pages and filing cabinets in order to individualize your presentation.

Blogs

Both Blogger and Wordpress have impressive options relating to widgets and templates, as well as the ability to incorporate specialized scripts. I particularly like MathJax, which I have put into Blogger in order to properly construct mathematical expressions for some of my articles. You can also arrange to publicize your new posts to Facebook and Twitter as well, in order to spread the word.

I have opted to split my postings into two blogs — Blogger for particularly professional statements, and Wordpress for personal viewpoints and recollections. That is a personal choice, but it seems to fit into the tools that are available for each, and it gives me a chance to experiment with what can be done. Besides, it's fun!

Wikis

I have been doing some editing on Wikipedia, and I am finding that wikis can be very powerful tools, especially in an organizational context:

• as any article can be edited by anyone,  a topic can be quickly created and refined where there is a critical mass of knowledge that can be drawn upon (ie, the wisdom of crowds)
• an article can be promptly updated when updated information becomes available
• it can provide a reasonable replacement for the organization manuals that can otherwise be subject to the obsolescence of the printed word in a fast-changing environment
• all previous versions of the article are still available to be consulted, in order to review for reasonableness and to provide document control (which can be critical for complying with documentation requirements such as those found in ISO 9001)
• footnotes and bibliographies can be easily constructed, together with hyperlinks to related articles and to reliable external sources
• when appropriate policies are instituted relating to the enforcement of reliability and the observance of intellectual property rights, proper administration and supervision of the wiki will result in a reliable body of information that members of the organization will be willing to rely on

MediaWiki, the platform on which Wikipedia is based,  is free to download and to implement. Just make sure you check all the other notes relating to installation requirements and compatibility. There are other wiki platforms as well, so see which one would work best for you.

I still can't believe this

The story that came out several days ago about top Liberal staffers in the Ontario provincial government — including those in the Premier's office — caught deleting e-mails from their systems is wrong on multiple levels:

• it runs contrary to the desire to keep all such communications as part of the historical record
• retention is mandated under the province's Archives and Recordkeeping Act, 2006
• even if the Act's penalties are weak, observance is the honourable thing to do
• there are relatively cheap means that could have been implemented to ensure that deletion could not have taken place (I particularly recommend the solution provided by Mailstore, but there are others)

There have been many spectacular stories in recent years about how this province's government has been mismanaged, but this story serves as a microcosm for the entire affair.

The real reason for Canada's lagging productivity?

Deloitte has been tracking the issue of the low productivity of Canadian businesses relative to those in the US for some time now, and this year's report proved to be a genuine eye-opener. On the other hand, the results were not really that surprising to those who know: as The Globe and Mail summarized it, Canadian companies are delusional:

• 36% of them are chronically underinvesting and not aware of it, while 14% know they are and are comfortable with that choice
• there is too much inclination to view matters internally, without benchmarking to what is happening externally
• firm size accounts for only 2% of the Canada-US productivity gap, and sector composition only 6% — the rest is happening within the sector itself
• all of this is happening despite the huge incentives Canadian tax legislation has in place to encourage capital spending and R&D activity, as well as the relatively cheap cost for improving IT and communications infrastructures

 This is no surprise to those who have had to deal with management on both sides of the border. Perhaps embarrassment is the way to go, to really start things moving...

A reminder: what you need to do to secure your ITCs

The Canada Revenue Agency is tightening their audit routines for determining how much can be allowed for input tax credit claims. Here is a refresher about the rules you must follow when you are registered to collect GST/HST.

What has to appear on invoices

The regulations presume that the basic information must appear on invoices that are supplied for a transaction, and must be captured on the registrant's books and records (essentially your accounting system). The information that must be supplied depends on the value of the invoice:

Information required	Invoice less than CAD 30	Invoice = CAD 30.00 - 149.99	Invoice = CAD 150 or more
Your business or trading name, or your intermediary's name (registrant with whom you have an agreement to help you supply your goods or services)	Y	Y	Y
Invoice date	Y	Y	Y
Total amount paid or payable	Y	Y	Y
An indication of the total amount of GST/HST charged or that the amount paid or payable for each taxable supply (other than zero-rated supplies) includes the GST/HST at the applicable rate	N	Y	Y
When you supply items taxable at the GST rate and the HST rate, an indication of which items are taxed at the GST rate and which are taxed at the HST rate	N	Y	Y
Your business number or your intermediary's business number (registrant with whom you have an agreement to help you supply your goods or services)	N	Y	Y
The buyer's name or trading name or the name of their authorized agent or representative	N	N	Y
A brief description of the goods or services	N	N	Y
Terms of payment	N	N	Y

Most accounting systems will capture the above information on invoices that they generate.

Circumstances where no invoice is supplied 

Certain exceptions are allowed with respect to the invoice requirement in the case of:

• unvouchered cash payments, 
• computerized books and records, 
• contractual arrangements (such as leases), 
• reimbursement of meal and entertainment expenses, 
• meal and entertainment expenses allowances, 
• reimbursement of expenses (other than meal and entertainment expenses), 
• allowances (other than for meal and entertainment expenses), and 
• taxi or limousine fares 

 There are some minor variations of the requirements for each of these categories, but the following apply to all:

• name or trading name of the supplier (or employer with respect to reimbursements and allowances)
• business number of the above
• date or reporting period for the transaction
• amount paid, as well as the amount of GST/HST
• the type of supply

 This area is where many businesses may get tripped up:

• are business numbers of suppliers being recorded on the books and records?
• are they being otherwise supplied on the execution of contractual arrangements?
• are all business numbers supplied being verified through the CRA GST/HST registry (and the QST registry, if you are registered for Quebec Sales Tax)?
• would it be a good idea for the employer to print its business number on expense reimbursement forms?
• do reimbursement claims distinguish between the different provinces with respect to the travel that has occurred (which may impact on any recapture of ITCs)?
• does the same go for any allowances that are paid?
• are the requirements relating to the use of corporate credit cards being properly observed?

The above is just a shortlist of the questions that need to be examined. The CRA website has many other topics that should be taken into account as well.

A hiring action that was really dumb...

The National Post had an interesting article this morning about an Ontario barrister who, having been downsized and was unable to make a go of private practice, decided at the age of 60 to apply for a relatively low-paying legal writer position at CCH. He was awarded CAD 5000 by the Ontario Human Rights Tribunal because an outside consultant at CCH advised him that his application was rejected, as the company was looking at "candidates that are more junior in their experience and salary expectation." The consultant was not the decision maker, but it was held that his communication made the applicant conclude that it was not worth following up. Accordingly, it was considered to be age discrimination that had an adverse affect, and an award was made for injury done to his "dignity, feelings and self-respect."

Reiss v. CCH Canadian Limited (2013 HRTO 764) is a rather interesting case to read. Reiss asked for a lower salary range than the other two, and declined to state the year he was admitted to the Bar, and these were considered to be "red flags". CCH hired one of the other two, who quit within a week, and the second had accepted a position elsewhere. The hiring manager then hired a former employee for the job, who she had bumped into on the subway. Reiss' application was meanwhile placed on hold. He called to follow up, but his behaviour in doing so was considered to be aggressive.

The whole affair was badly handled, but, in this case, only the outside consultant stepped over the line. The decision does make some useful points. It points out (at par. 61) that a prima facie case of discrimination is established by proving the following:

• that the applicant was qualified for the particular employment;
• that the applicant was not hired; and
• that someone no better qualified but lacking the distinguishing feature which is the gravamen of the human rights complaint subsequently obtained the position

It also points out that discrimination is held to exist when it is a factor (not necessarily the sole or major factor). In that regard (at par. 47), a recital of the analysis that is made in cases of circumstantial evidence is as follows:

The relevant principles that apply in cases where an allegation of racial discrimination has been raised have been usefully summarized as follows: 

• The prohibited ground or grounds of discrimination need not be the sole or the major factor leading to the discriminatory conduct; it is sufficient if they are a factor; 
• There is no need to establish an intention or motivation to discriminate; the focus of the enquiry is on the effect of the respondent's actions on the complainant; 
• The prohibited ground or grounds need not be the cause of the respondent's discriminatory conduct; it is sufficient if they are a factor or operative element; 
• There need be no direct evidence of discrimination; discrimination will more often be proven by circumstantial evidence and inference; and 
• Racial stereotyping will usually be the result of subtle unconscious beliefs, biases and prejudices.

This applies to all types of discrimination, and it is something to certainly keep in mind in assessing whether hiring practices are truly focused on getting the best candidate.

What is your cost of capital?

It is a classic rule in economics that, if a proposed investment is expected to have a rate of return that is greater than your cost of capital, you should invest in it. That is a case of marginal benefit over marginal cost. However, there are still too many businesses that do not know what their cost of capital really is — many are probably severely overestimating it.

I am not against adjusting the rate to account for expected risks with respect to particular investment. There are some rules of thumb that have been given in that regard:

• venture capital investors generally expect an annual after-tax rate of return around 40%
• angel investors will generally expect at least 50%

There have been other arbitrary rates that have been employed in the past. One company I worked at in the past (which was a part of the Ford Motor Company) expected a minimum return of 15% for any capital investment proposal. As this was back when corporate tax rates were approaching 50%, that meant that before-tax returns were around 30%, which was extremely conservative even in those days when the prime rate was around 11%.

Most good financial management texts have good discussions on the subject of determining a firm's cost of capital, and they all generally agree on the following key points:

• the emphasis must be on calculating the ideal mix of debt, equity and other financing for the firm
• the rate will be a weighted average of the returns arising from the different financing components
• where the firm is privately owned, proxy rates may be employed using data from the industry and the geographic area concerned
• adjustments for risk may be made for different types of investments, but that is a step subsequent to the initial calculation, and they should reflect the risks faced by the firm in question, as opposed to a blanket adjustment

In these days when many companies have been cutting back on their dividend payouts and capital investments, and interest rates are still around historical lows, "dead money" on corporate balance sheets has been of great concern to many people. The emphasis around such excess liquidity still runs counter to classical economic theory, which holds that excess funds should be paid out as dividends, if there are no alternatives available to earn rates of return in excess of the cost of capital. I would like to see more discussion from corporate executives and analysts as to why that is not the case at this time, or whether this is an extreme case of risk aversion even for Canadian businesses.

A good idea that's been abused

One particular story that has struck a chord this past while has been the use and abuse of the Temporary Foreign Workers visa programme by Canadian employers. It really exploded this past weekend with the revelation that an IT professional with 20 years' experience that is currently receiving employment insurance benefits is unable to obtain interviews. That in spite of high demand for his skills!

It doesn't help that a former manager with one of the companies this person applied to stated that the company policy is not to hire qualified Canadians. The situation is even uglier when a former manager with the government agency concerned declares that it is being run as a "factory" where the objective is to churn out the Labour Market Opinions as quickly as possible in order to have the visas issued, with no due diligence undertaken to verify that employers have undergone a genuine effort to search out and hire qualified applicants who are Canadian citizens or permanent residents.

I must say that this is wrong on multiple levels. Never mind that now fees will be charged for the issue of such opinions that were previously issued at no charge, or that pay for such workers must be at parity with local wages and not at a 15% discount, or that searches should not call for knowledge of languages other than English or French as a job requirement (although the previous rules were both sick and wrong!). I can verify from personal observation that the so-called searches are being undertaken with criteria so stringent that it would be impossible to find anyone in Canada that could qualify. As the CBC story noted above observes, many people coming in under the TFW programme do not have such qualifications anyway, and in many cases the employer did not really need them. That is the real abuse that must be stopped, and the changes that have been announced will not really bring that about.

This is a story that will be definitely continued...