Briefly: “Thow waives extradition hearing” and more news

Disgraced former investment advisor Ian Thow has waived his right to an extradition hearing, meaning he’ll likely soon be in Canada to face charges of investment fraud.

Thow, who’s been accused by some of bilking former clients in Victoria, B.C., by more than $30 million, appeared in United States Federal Court in Seattle, Washington, regarding the Government of Canada’s request for him to be extradited to Canada to face 25 counts of fraud over $5,000.

According to the RCMP’s Integrated Market Enforcement Taskforce, Thow waived his right to an extradition hearing. He remains in United States’ custody pending final arrangements for his transfer to Canada. No date has yet been set for his return.

On June 9, 2008, Mr. Thow was charged and a warrant for his arrest was issued. On February 17, 2009, Thow was arrested by the U.S. Marshals’ Fugitive Task Force in Portland, Oregon, and subsequently transferred to Seattle for his extradition hearing.

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Two more banks agree to “say on pay”

Following the lead of RBC and CIBC, the Bank of Nova Scotia and the Bank of Montreal have agreed to implement a shareholder resolution on executive compensation.

The resolution — which allows shareholders to provide an annual advisory vote to the banks’ boards of directors on executive compensation — received 51.6% support at Scotiabank and 53.6% at BMO, at annual general meetings held on Tuesday.

The two banks indicated they would respect the vote and work with shareholders to implement the resolution. “I’d like to announce that the bank will provide shareholders with a non-binding vote on executive compensation at the next shareholders meeting,” said BMO chair David Galloway.

The resolution was filed with all of Canada’s big banks by Meritas Mutual Funds, with support from SHARE (Shareholder Association for Research and Education). At RBC’s and CIBC’s annual meetings last week, the “say on pay” proposals garnered the support of 54.4% and 51.9% of shareholders, respectively. TD Bank, whose AGM is scheduled for next month, is also expected to support the resolution.

Meritas brought the issue of advisory votes on executive compensation to the Canadian investment community in 2007 through dialogue with Canada’s largest banks, and followed up with shareholder proposals asking for a vote. “We asked that this vote be advisory, so that it would not ultimately determine executive pay, but would provide clear and consistent shareholder feedback on the decisions that bank boards make about compensation,” said Meritas CEO Gary Hawton.

Last year, support at the big banks averaged 40.5%. Hawton says he was surprised by the increased level of support this year, adding that he is hopeful regulators will consider rules requiring companies to hold votes on executive compensation.

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CRA announces penalty interest rates

The Canada Revenue Agency announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations.

The rates are calculated quarterly in accordance with applicable legislation and will be in effect from April 1 to June 30, 2009.

The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will be 5%. The interest rate paid on overpayments will be 3%.

The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.

The interest rate on overdue remittances for the Goods and Services Tax, Harmonized Sales Tax, and Air Travellers Security Charge will be 5%, and overpaid remittances will receive a 3% rate of interest.

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Two thirds of Canadians think it’s a buyers market

The downturn in the real estate market has led many Canadians to conclude it’s a buyer’s market for new homes. According to the 16th Annual RBC Homeownership Survey, 65% of Canadians think it’s a buyers market right now and more than a quarter of Canadians (27%) say they intend to purchase a home over the next two years.

Additionally, almost half of respondents (48%) indicate that it makes sense to buy a home now versus waiting until next year.

The survey found that younger Canadians are most likely to spark an upsurge in home sales. In the under 35 group, 48% said they plan to buy, which is up sharply from 36% last year. Renters also see an uptick in buyer sentiment, with 38% planning to buy in the next two years.

“The current economic environment does not appear to have dampened Canadians’ overall confidence in the housing market,” says Karen Leggett, head of Home Equity Financing for RBC Royal Bank. “Canadians continue to have an overwhelming belief in the long-term value of a home and we’re seeing this in the buying intentions of many first time homebuyers this year.”

“The survey also found an overwhelming majority of Canadians (83%) believe homeownership is a good investment. That sentiment is down from 85% in 2008 and from an all-time high of 90% in 2006, but ten points higher than it was a decade ago.”

(03/04/09)