With Paige Motamedi (Insurance Advisor, Hull Life Insurance) & Martin Ochwat (COO, Dundas Wealth)
Maybe it's $200K. Maybe it's a million. You've built up retained earnings inside your corporation, you know you should be doing something with it — but nobody has ever walked you through all your options at once. So it just sits there.
In Episode 5 of Keep What You Build, Martin Ochwat sits down with Paige Motamedi of Hull Life Insurance Corporation — 22 years in the industry, backed by a firm with nearly a century of experience working with Canadian entrepreneurs — to lay out exactly what's happening to that money and what you can actually do about it.
Cash that just sits in the corporation isn't standing still — it's quietly losing ground to inflation and to one of the most expensive rules in the tax code. The moment your corporation earns more than $50,000 of passive income in a year, the CRA starts clawing back your small business deduction.
"For every dollar of passive income above $50,000, you lose five dollars of small business deduction room. Hit $150,000 of passive income and it's gone entirely."
Losing the small business rate can mean tens of thousands of dollars in additional tax every single year. That's why doing nothing isn't actually neutral — it's a decision with a cost most owners never see on a statement.
Before talking about insurance at all, Paige walks through the realistic options for retained earnings — and where each one makes sense or breaks down.
Safe and liquid, but it generates passive income that counts against the $50K threshold — and barely keeps up with inflation.
Higher growth potential, but the investment income is exactly the passive income that grinds down your small business deduction.
A real strategy for many owners — with its own trade-offs around liquidity, management, and the capital gains bill waiting down the road.
The option most owners have heard of but few actually understand — and the one that directly addresses the passive income problem.
Here's the mechanical version. Premiums are funded from money already inside the corporation — often from investment gains rather than out-of-pocket cash. Inside the policy, the money grows in a tax-sheltered environment, and that growth doesn't count as passive income — so it doesn't chip away at your small business deduction.
Paige is clear that this isn't about replacing your investment strategy. For the right owner, corporate-owned life insurance complements what you're already doing — redirecting a portion of the dollars that would otherwise be taxed as passive income into something that compounds quietly in the background.
The mechanism that makes the whole strategy work is the Capital Dividend Account (CDA). When the insured passes away, the death benefit is paid to the corporation. The portion above the policy's adjusted cost basis flows into the CDA — and from there it can be paid to shareholders as a tax-free capital dividend.
And it isn't only a death-benefit play. The episode also covers how owners can access funds while still alive — using the policy's cash value as collateral for a loan — which is the question Paige opens the whole conversation with.
Credibility comes from being honest about fit. This generally makes sense for an incorporated owner paying meaningful tax, with retained earnings building up that they don't need fully liquid in the short term, and often with a succession or estate concern in the picture.
It's the wrong move for someone who needs the money liquid soon, is very early stage, or has health circumstances that make coverage impractical. The honest "who this isn't for" is exactly why the "who this is for" is worth taking seriously.
To make it concrete, Paige walks through an anonymized client scenario involving rental properties and the capital gains exposure that came with them — what the options looked like, what the owner decided, and the moment it went from "I'm not sure" to "this makes sense."
If you've been building retained earnings for years and have never dealt with them strategically, the first step is simply to run the numbers — what staying the course actually costs versus repositioning some of that money. The right person to do that with understands both the tax side and the insurance side, not one or the other.
You can book a free strategy call with Dundas Wealth below. We'll look at your corporate structure, tell you honestly whether this fits, and — if it makes sense — put concrete numbers in front of you.
Book a free strategy call with Dundas Wealth. We'll review your corporate structure, show you what idle retained earnings are costing you in passive income tax, and give you a straight answer on whether repositioning some of it makes sense.
Book Your Free Strategy CallFree. No commitment. Bring your accountant if you'd like.