Canada Holdings Company Limited
Here is an explanatory excerpt from Chapter 8 of our Butchart Gardens History:
“On 28 December, 1923 Robert and Jennie Butchart set up the Canada Holdings Company, Ltd. According to the incorporation documents, this company’s primary purpose was to “more conveniently manage the [Butchart’s] properties and assets and to enable [Robert and Jennie Butchart] to more easily make a division of the said properties and assets amongst [their] children and relations…..”. Most of Robert and Jennie Butchart’s property and assets, including the title to their Benvenuto estate at Tod Inlet, were quickly transferred to the new holding company’.
Although the Canada Holdings Company’s stated purpose was to allow the Butcharts to “more conveniently manage” their assets and divide those assets “amongst [their] children and relations”, the Butcharts clearly intended the company to be an instrument for estate planning. Their primary motive for incorporating the company was, undoubtedly, to minimize the burden of inheritance taxes.
Canada no longer has inheritance taxes – this form of taxation was repealed in the 1960s – but in the 1920’s, Succession Duties, as the federal taxes on estates and inheritances were known, generated a significant amount of the Canadian government’s revenues. Inheritance taxes could also take a sizable portion of an individual estate. Following Jennie Butchart’s death in 1950, the Canadian government took $116,649.21, or nearly 23% of her estate, for Succession Duties. The Province of British Columbia took another $1,405.06 in Probate Fees.
There were two relatively simple ways of legally minimizing these Succession Duties. The first was to register personal assets as being jointly owned. Upon Robert or Jennie’s death, ownership of the couple’s jointly owned assets would automatically pass to the surviving spouse without being probated and taxed. Joint ownership of assets appears to have been how the Butcharts handled a large part of their estate planning.
The second way of legally avoiding inheritance taxes was to reduce the size of one’s estate by giving assets to the intended beneficiaries during one’s lifetime. This was exactly what the Canada Holdings Company, Ltd. was set up to accomplish. One of the company’s objectives, as stated in its Application for Incorporation, was “to enable [Robert and Jennie Butchart] to more easily make a division of the said properties and assets amongst [their] children and relations…..”.
After transferring most of their assets, including their Benvenuto estate at Tod Inlet, into the Canada Holdings Company Ltd., the Butcharts could “easily make a division of the said properties and assets amongst [their] children and relations…..” by simply transferring company shares, or, in other words, shares of company assets, to their intended beneficiaries. This is exactly what the Butcharts did…..”
More information on the Butchart’s estate planning and the legal transfer of the Butchart Gardens to their grandson, Ian Ross, can be found in Chapter 8 of our Butchart Gardens History.
Anyone wanting more information about the Canada Holdings Company limited can find its records in the B.C. Provincial Archives.
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