Skin in the game
Re Trump's huge writeoff is equitable, even in Canada (Nov. 4): I agree that if a person has to pay tax on business profits, they should be allowed to deduct losses, but I think that one point is missed: that claiming a loss is limited by how much is at risk. In Canada and the United States, a person can only deduct a loss up to the extent they have at risk in the investment.
For example, if I invested $1,000 cash in units of a partnership and also guaranteed $5,000 in the debt of the business, I would not be allowed to write off any more than $6,000 of losses, even if my share of the loss were greater than that $6,000. Further, if the partnership were to go out of business and my liability for the $5,000 went away, I could be subject to recapture of any of the loss over $1,000, which is my revised at-risk amount.
In Donald Trump's case, he may have legitimately had a loss of $916-million in 1995, if he had that much skin in the game at the time. But if he didn't, or if the amount he had at risk changed after a bankruptcy, the loans and liabilities would have been eliminated along with the loss carry-over. Craig Cherrie, Toronto
Numbers don't work
Re Sure, more lattes (ROB letters, Nov. 1): Ben Cherniavsky contends that the "current structure of Canada's rent formula has created a disincentive for airports to add services that create more revenue," so airports "opt simply to charge the airlines higher landing fees." This simply isn't accurate. Aviation is a thin-margin business and airlines have many choices. Competitive landing fees are incredibly important in attracting and retaining air service.
In YVR's case, paying almost $50-million a year to the federal government has in no way been a disincentive to finding new revenue sources. YVR gets more revenue per passenger from "added services" than any other North American airport, according to Airport Revenue News. These include a designer outlet centre, international sales of our internally developed border-processing kiosks, parking, retail, food, beverage and duty-free. Non-aeronautical sales are 45 per cent of our revenue, which has enabled YVR to reduce landing fees by an average of 15 per cent this year.
Our results are directly correlated to the current not-for-profit governance structure. A privatized YVR would have to pay a significant return to shareholders before even trying to find ways to generate more revenue. The numbers don't work. Craig Richmond, president and chief executive officer, Vancouver Airport Authority
Why? Here's why
Re Financial literacy isn't the best way to create better savers (Oct. 31): Why should we educate consumers on budgeting, saving and managing debt? Forty-two per cent of Canadians between the ages of 35 and 44 are struggling to pay bills, our research shows. Many Canadians lack access to emergency savings. We have an aging population, yet many Canadians don't know how much they need to retire.
A financially literate population is critical for the economy and individual financial well-being. There is an onus on us all. We know budgeting is a basic step. Fewer than half of Canadians (46 per cent) have a household budget, yet 93 per cent of those who do stay within it most of the time, across all age groups and income levels. Budgeting helps people gain confidence, prioritize, save and manage debt.
November is Financial Literacy Month in Canada – a campaign supported by the federal government, teachers, financial institutions, non-profits, accountants, insurers and others to help Canadians make responsible choices on personal finances. Jane Rooney, Canada's Financial Literacy Leader, Ottawa
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