Fighting for the tax payer: Top Ten Tax Boutiques

Mark Twain said the only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. Advocating on behalf of the leftovers are the winners of Canadian Lawyer’s top tax law boutiques list, whose lawyers say they are focused on federal fiscal policy changes, at home and in the United States.

The winning firms span Toronto, Vancouver, Calgary, Edmonton, Saskatoon, Ottawa, Victoria, Montreal and Buffalo, New York.

Adam Aptowitzer is a partner at Drache Aptowitzer LLP, a top tax boutique that focuses on charities and non-profits. There are 170,000 charitable and non-profit organizations in Canada, with 85,000 of them being registered charities. Employing two million people, with another 13 million volunteering, this sector makes up 8.1 per cent of Canada’s GDP. This accounts for more than retail and is in league with mining and oil and gas extraction, which fetches 10 per cent, according to Imagine Canada, an umbrella organization representing charities.

Aptowitzer’s firm has offices in Toronto, Ottawa and Calgary. He represents organizations of various religions, sports, health care, social welfare and poverty relief as well as their donors.

Over the last few years, an issue of common concern among Drache Aptowitzer clients was the former federal Conservative government’s audits scrutinizing the political activities of charities. In 2012, the Harper government instructed the Canada Revenue Agency to target charities involved in environmentalism (and opposed to the government’s energy policies), human rights, animal rights, education, religion, foreign aid and anti-poverty.

“The question until very, very recently is, you know, what can we do? Can we engage in public policy dialogue? What are the limits of what we can engage in?” says Aptowitzer.

Until December 2018 when the law was changed, charities could only spend 10 per cent of their revenue on non-partisan political activities.

“We were fighting those audits and those appeals,” he says. “And then everything got suspended by Trudeau shortly after his election.”

But despite a different direction from a new government, Aptowitzer says, his clients who were audited and suspended and those who were not audited are still confused about what they can and cannot do.

Aptowitzer, who is also associate professor of law at the University of Ottawa, provides charities with tax planning, corporate governance and gift planning. He also consults for foreign governments on civil society regulation.

He says the work the firm does for tax public policy likely drives business and earns them votes in the survey. This activity includes publishing in journals, papers on tax policy written for the C.D. Howe Institute by Aptowitzer and fellow partner Arthur Drache and working with the media as a charity law expert, as well as authoring the book Starting and Maintaining a Charity in Canada.

Contributing to public policy discussions in Canada is also a focus for TaxChambers LLP, according to Vitaly Timokhov, whose work for the firm includes publishing books, articles and public speaking on Canadian and international taxation. Timokhov’s practice ranges from Canadian tax planning, reorganizations, mergers, acquisitions and tax planning for mid-market businesses and high-net-worth individuals. TaxChambers LLP has offices in Toronto.

“We like to be influencers. Tax is a very academic subject. We like the complexity of the subject. We like the impact of this subject,” he says.

Timokhov says that, in comparison with all other areas of law, tax law is the most relevant to Canadian political discourse.

“Taxes affect everyone. Everybody complains about them,  but they affect everyone,” he says.

In 2017, the federal Liberal government introduced tax changes it said were intended to prevent income splitting, which was a tax-planning strategy where a business owner would move income into the names of family members to be taxed at a lower rate. The move created backlash from self-employed professionals such as lawyers, doctors, farmers, accountants and business owners.

“There definitely was a fairly significant push against the changes suggested by the government,” Timokhov says.

Instead of publishing academic papers or testifying in front of committees, Timokhov says he went to clients, discussed the changes and educated his clients on how they would affect them and advised them to reach out to their MPs to voice their concerns.

“From my perspective, that was the only way to communicate the policy to decision-makers in the way that they would really understand the impact of their constituencies,” he says.

The government backtracked and adjusted its tax policy, which includes lowering the small-business tax rate to nine per cent from 10.5 per cent. Timokhov says he is pleased that the changes are now not so “draconian.”

“To me, it was really unexpected that the government actually stepped back and listened to our concerns,” says Timokhov.

The revised small-business tax changes will come into effect in 2019 and, although Timokhov says it’s impossible to tell what effect these changes will have on the long-term economic health of Canada, his clients feel the government is trying to “confiscate and penalize them for being good savers.”

“Why are we really taxing the most economically active members of our society — the middle class, the entrepreneurs? . . . There’s no societal goal to kill the golden goose, which is the group in this country that creates most of the employment,” he says.

But even if your MP is Chrystia Freeland, applying pressure to affect U.S. tax policy is next to impossible. But Trump’s tariff and tax changes are serious for TaxChambers LLP’s clients, many of whom have cross-border trading relationships, assets and properties south of the border.

“The fiscal policy changes in the United States are huge,” Timokhov says.

The unpredictability of U.S. fiscal policy is a challenge for clients of Felesky Flynn LLP, according to Craig McDougall, a partner at the firm’s Calgary office, whose practice includes corporate, commodity and personal tax planning.

“I think the key thing is the tax rules are always changing. And it’s just difficult for our clients to stay on top of it,” he says.

Those criticisms apply to Canadian tax policy as well, and on the home front, McDougall’s clients are also frustrated with the low price Canadian oil is fetching on the international market, partly attributable to lack of pipeline capacity.

“There’s a continued focus from our client’s perspective on reliable access to market for our resources. That’s been a real challenge in our area, just generally, and that obviously has a trickle-down effect to our clients and their ability to effectively be competitive,” he says.

The “deep discount” on Canadian crude driving down profits is creating some opportunities and “a lot of pain,” leading to reorganizations, downsizing and sale of assets, he says.

Felesky Flynn LLP’s clients include those in natural resources, high-net-worth individuals and the MUSH sector (municipalities, universities, schools and hospitals), says McDougall.

As opposed to the force of commodity prices, the winds of demographic change are speeding up business for the firm in the wealth management area, as the aging population moves assets to the younger generation.

“One of the trends that we’re seeing right now is that, with the aging population, there’s a great deal of focus on moving both wealth and management of large private and, in some cases, public businesses to the next generation,” he says. “There’s a lot of work that’s done there to make sure that there’s an orderly progression of business from one generation to the next and doing so in a way that doesn’t result in punitive taxes being payable.”

Editor's Note: The online version of this story has been updated to clarify that the 10 per cent limit on charities’ non-partisan political activities was removed a few weeks ago by the Federal government.

The Big Four accounting firms

While the large accounting firms have affiliated tax-law firms, we do not consider these tax-law firms to be boutiques, as they share the brand with their larger organization. In previous surveys, we did include these entities but the landscape has evolved quickly and more areas of legal services are being internalized in these large organizations.

How we did it

Canadian Lawyer asked lawyers, in-house counsel and clients from across Canada to vote on the top tax boutiques. They were asked to rank their top firms from a preliminary list, with a chance to nominate a firm that was not included on the list. To be considered in the vote, firms were required to have at least 80 per cent of their business come from tax. The final rankings were determined through a points system, in which firms were rewarded on a sliding scale for the number of first to 10th-place votes received. The quantitative results are combined with feedback from respected senior members of the bar and in-house counsel when applicable. For additional information regarding the methodology & criteria, please find a full description of our methodology here.

Top 10 Tax Boutique

Barsalou Lawson Rheault Barristers & Solicitors 

Montreal
barsalou.ca

Barsalou Lawson Rheault is a leading Canadian law firm that has been providing tax advice since 1994 to multinational corporations doing business in Canada. Its practice covers all areas of taxation, with an emphasis on transfer pricing (planning, audits, competent authority) and tax dispute resolution. It has been involved in many of the largest audits and objection matters in the country. Pierre Barsalou, a former governor of the Canadian Tax Foundation, Sébastien Rheault, a current governor, McShane Jones and Josée Pelletier are the firm’s partners. The firm’s clientele are leaders in their various industries, including pharmaceuticals, medical devices, telecom, financial services, e-commerce, mining, aerospace and real estate.

Drache Aptowitzer LLP 

Toronto, Calgary, Ottawa
drache.ca

Drache Aptowitzer LLP is recognized as one of Canada’s leading firms in charity and non-profit law. It provides  guidance through every step of an organization’s lifespan and operations in Canada and internationally. Drache Aptowitzer acts for many organizations across Canada, as well as international charities with Canadian connections. The firm also regularly works with and supports other organizations and legal advisors who prefer to take advantage of its specialized expertise. The firm is often retained by taxpayers to structure significant charitable donations, both during their lifetimes and in their estate planning. Lawyers at the firm have appeared on behalf of both charities and donors before the Tax Court of Canada, the Federal Court of Canada, the Federal Court of Appeal and the Supreme Court of Canada.

Dwyer Tax Law 

Victoria
dwyertaxlaw.com

Dwyer Tax Law is located on Canada’s west coast in Victoria, B.C. Dwyer Tax Law concentrates its practice on family businesses, succession planning and estate planning. This involves restructuring corporate and other business structures, implementing estate freezes, customizing trusts to accomplish specific family goals and preparing family and other types of shareholder agreements. The firm also advises in several cross-border situations, including U.S. citizens residing in Canada. Founding lawyer Blair Dwyer has been practising tax and estate planning since 1985. He used to be partner at McCarthy Tétrault LLP before moving to the west coast in 1992. Dwyer is the author of the Canadian tax content for the Global Tax Explorer, an online service of the International Bureau of Fiscal Documentation.

Felesky Flynn LLP 

Calgary, Edmonton, Saskatoon
felesky.com

Felesky Flynn LLP provides Canadian and international tax planning and tax dispute advice to clients throughout Canada and internationally through its offices in Calgary, Edmonton and Saskatoon. Felesky Flynn is one of Canada’s oldest and largest law firms focused on taxation, boasting deep technical knowledge, diverse commercial experience and an unparalleled reputation. The firm’s lawyers pride themselves on tackling the most difficult problems, offering the most creative solutions and providing the best possible advice. Felesky Flynn says it is considered the “go to” firm in Alberta for important and complex tax planning and dispute matters. The firm has expertise in appeals, audits, commodity tax, corporate and personal tax planning, criminal tax defence, international tax planning, objections, tax planning for mergers, reorganizations and acquisitions, resource taxation, tax representation and litigation and voluntary disclosures.

Millar Kreklewetz LLP 

Toronto
taxandtradelaw.com

Millar Kreklewetz LLP is a tax and trade boutique that Lexpert Magazine called a “brand name for commodity tax and international trade work” in 1999. The firm remains focused to this day on a client base comprised of local, provincial, national and international leaders in virtually every industry sector. Millar Kreklewetz advises clients in aerospace, chemicals, automotive manufacturing, banking, direct mail, direct selling, computer software, financial services, pharmaceuticals, grocery retail, food processing, forestry, gas, health care, IT, leasing, manufacturing, oil, publishing, steel and public private partnerships. The firm also focuses on tax, customs, competition, valuation and transfer pricing issues between multinational businesses, disputes regarding employee or independent contractor status, issues coming out of the transfer of business personnel to Canada and cross-border movements of labour, goods and services.

Moodys Gartner Tax Law LLP 

Calgary, Edmonton, Toronto, Buffalo, NY
moodysgartner.com

Moodys Gartner Tax Law LLP provides tax advisory and planning for individuals with personal and business interests on either side of the Canada/U.S. border, no matter where they live in the world. With offices in Calgary, Edmonton, Toronto, and Buffalo, NY, the firm’s team of Canadian and U.S. tax lawyers, chartered accountants and certified public accountants work together to deliver Canadian, U.S. and international tax advisory and planning, including corporate and personal, estate and trust planning, tax dispute resolution, U.S. tax compliance and value-added tax. Kim Moody, director, Canadian tax advisory, is frequently quoted in the media regarding tax issues, including in The Globe and Mail, Bloomberg, Global News, BNN and the Financial Post. He also frequently speaks and presents at accounting and tax law events across North America.

Morris Kepes Winters LLP 

 Toronto
mkwtaxlaw.com

Morris Kepes Winters LLP is one of Canada’s leading tax boutique law firms. Founded in 1990, the firm focuses on tax planning, tax litigation (civil and criminal) and Canada/U.S. cross-border planning. A number of the firm’s lawyers are also certified public accountants. The U.S. practice group is routinely engaged in cross-border acquisition transactions and tax controversy work. The criminal defence team includes senior counsel with prior experience acting as agent for the Public Prosecution Service of Canada in tax-related matters. Lawyers at MKW routinely appear before all levels of court, including the Tax Court of Canada, the Federal Court of Appeal and the Ontario Superior Court of Justice.

Radnoff Law Offices

Toronto
radnofflaw.com

Established in 2003, Radnoff Law Offices is a tax litigation boutique firm in Toronto. Its principal, Jeffrey Radnoff, has been a successful commercial litigator since 1994. He and his team have more than 20 years of experience in tax litigation. The firm is one of the few to obtain an injunction against the Canada Revenue Agency. It has provided advice in most areas of tax law, including income tax, HST and payroll. Its lawyers are experienced litigators with significant knowledge on dealing with the administrative practices of the Canada Revenue Agency. Jeffrey Radnoff has provided expert evidence on tax issues.

TaxChambers LLP 

Toronto
taxchambers.ca

TaxChambers LLP is located in downtown Toronto. Since its inception in 2010, it has developed into a recognised leader in tax law, representing clients from Canada and abroad in all areas of Canadian and U.S. tax law. The firm’s expertise includes corporate and business taxation, international taxation, commodity taxes and personal tax and wealth planning. The firm has contributed to tax thought in Canada through the many books, articles, and publications authored by its lawyers on fundamental and current tax topics. The firm also has a robust tax litigation practice, representing clients through all stages of the CRA appeals and at all levels of court.

Thorsteinssons LLP 

Toronto, Vancouver
thor.ca

Thorsteinssons LLP was founded in 1964 and has since become one of Canada’s largest law firms practising exclusively in tax. For more than 50 years, the firm has provided tax advice to clients around the world and is recognized for its work in highly complex matters. The firm has a long history of work in the resource sector and provides advice in personal, corporate and international tax advice, estate planning, sales tax advice and has been involved in many tax litigation matters at all levels of court. The firm was founded in Vancouver in 1964 by Pat Thorsteinsson. The firm’s Toronto office opened in 1990.