The Budget 2017 documents revealed that the government has been undergoing further reviews of various planning strategies relating to the use of private corporations that reduce personal income taxes of high income earners. The government will be releasing a paper in the next few months which will contain proposed policy responses to various tax planning strategies involving private corporations—no specifics were provided with respect to which kinds of strategies will be targeted.Close
Effective July 1, 2017, Budget 2017 proposes to extend the GST/HST on taxi operators to ride-sharing services. Taxi operators are required to collect and remit GST/HST on their fares with no dollar exemption limit. In order to ensure GST/HST is consistently applied, ride-sharing service providers will be required to register for GST/HST and charge the tax on their fares.Close
Generally, taxpayers are required to include the value of their work in progress (“WIP”) in their income whether or not they have actually received payment for performing the work. However, certain professionals such as lawyers, doctors, veterinarians, and chiropractors are not required to include the WIP in their income until the work is billed to the client. Budget 2017 proposes to eliminate billed-basis accounting effective in taxation years that begin on or after March 22, 2017, with a transitional period. Going forward, professionals must include WIP in their taxable income even though they have yet to bill the client for that work.Close
If a taxpayer receives a loan by virtue of their employment with an interest rate below a prescribed rate, he or she is deemed to have received a taxable benefit. However, taxpayers can claim an offsetting deduction to the extent that the loan (not exceeding $25,000) was for the purpose of acquiring a new home when moving to a new work location. Budget 2017 proposes to eliminate this offsetting deduction, effective 2018 and subsequent years.Close
Budget 2017 proposes to expand the medical tax credit to include costs paid for the purpose of conceiving a child regardless of whether the medical procedures involved are not medically indicated due to infertility. This change clarifies that such reproductive technologies are eligible for the credit in cases of medical intervention—prior to this change, such expenses were only eligible in cases of medical infertility.Close
Budget 2017 announced that the public transit tax credit will be repealed as of July 1, 2017. The non-refundable credit provided a 15% tax reduction with respect to eligible public transit passes such as monthly passes and electronic fare cards.Close
Budget 2017 proposes to amend the eligibility criteria for the disability tax credit. One of the conditions required for the credit is that a medical practitioner certifies on CRA Form T2201 that the taxpayer has a physical or mental impairment that markedly restricts the taxpayer’s ability to perform a basic life activity. Generally, medical practitioners include medical doctors, optometrists, psychologist, etc. Applicable to certifications made on or after March 22, 2017, nurse practitioners are granted the power to certify a taxpayer’s eligibility for the credit.Close
The Canada Revenue Agency (CRA) has announced that a link is now available between its website and that of Service Canada, for users of online services at both sites.
Canadian taxpayers can carry out most tax-related transactions and obtain most personal tax information from the CRA website. Similarly, individuals who wish to obtain information about their Canada Pension Plan or Old Age Security entitlement, or other federal government programs (like Employment Insurance), can do so using the Service Canada website.
Both sites require a user to log in using a user ID and password. Once logged in to either site, users will now be able to move back and forth between those sites without the need to re-enter an ID and password. The CRA announcement of the new links can be found at www.cra-arc.gc.ca/nwsrm/txtps/2017/tfsk26-eng.html?rss, and more information about using the links is available at www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/srvccnd-eng.html.Close
The Canada Revenue Agency (CRA) has issued a notice indicating that its online services have been restored, and that taxpayers are once again able to file their 2016 tax returns online, make payments, and access all of the CRA’s digital services.
The CRA had shut down its online services as a precautionary measure after learning of an internet vulnerability that affected computer servers. The CRA’s notice indicates that tax returns which were already filed have continued to be processed normally throughout the period of the service interruption. As well, the CRA noted that taxpayers who have already filed online and who received a confirmation code can be certain that their return was successfully filed.Close
Individual investors in flow-through shares can claim a 15% federal Mineral Exploration Tax Credit. That federal tax credit was scheduled to expire as of March 31, 2017, but Finance Canada has announced that it will be extended for one year. The credit will therefore be available for qualifying investments made by flow-through share investors until March 31, 2018. There is no change in the terms of the credit.
The Finance Canada announcement of the extension can be found at www.fin.gc.ca/n17/17-012-eng.asp.Close
The Minister of Finance has announced that the 2017-18 federal Budget will be brought down on Wednesday, March 22, 2017. The announcement of the Budget date can be found on the Finance Canada website at www.fin.gc.ca/n17/17-013-eng.asp.
The Budget Papers will be made available on the same website, at www.fin.gc.ca/access/budinfo-eng.asp.Close
In its regularly scheduled interest rate announcement made on March 1, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the bank rate remains at 0.75%.
The press release announcing the Bank’s decision can be found at www.bankofcanada.ca/2017/03/fad-press-release-2017-03-01/. In its release, the Bank noted that, although the inflation rate for January was over 2%, it attributed that result to higher energy prices due, in part, from the imposition of carbon tax measures in two provinces. The Bank expects such effect to be temporary. Overall, in the Bank’s view, there is still what it termed “material excess capacity” in the Canadian economy.
The next regularly scheduled interest rate announcement will take place on April 12, 2017.Close
The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in the rate of inflation during the month of January. That rate stood at 2.1%, as measured on a year over year basis. The comparable year over year rate for December was 1.5%.
Inflation during January was broad-based, with price increases recorded in seven of the eight major index components. Increases in the cost of transportation and shelter were the greatest contributors to the inflation rate, with transportation costs rising 6.3% and shelter up by 2.4%, both as measured on a year over year basis.
More details of the inflation picture for the month can be found in the February release of the Consumer Price Index, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/170224/dq170224a-eng.htm?HPA=1.Close
The Canada Revenue Agency (CRA) has announced that, effective as of February 20, 2017, EFILE service providers will be able to submit T1 adjustments for clients online, using their EFILE software.
The new service, called ReFILE allows adjustments to be made for the 2015 and 2016 tax years, and will expand by 2019 to include the previous three tax years. EFILE service providers should ensure they have Level 2 authorization with their clients prior to using the ReFILE service. NETFILE users will also be able to use ReFILE starting in February 2018.
The CRA’s announcement of the new service can be found on its website at www.cra-arc.gc.ca/tx/txprfssnls/whtsnw-eng.html.Close
The Canada Revenue Agency (CRA) has announced that its online NETFILE service for the filing of individual income tax returns is now available.
NETFILE can be used to file individual tax returns for the 2013, 2014, 2015, and 2016 taxation years. Individuals do not need to obtain an access code in order to NETFILE, but must provide identifying information, including social insurance number and date of birth.
Information about the current year NETFILE service can be found on the CRA website at www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html, and a listing of software which is certified for use with this year’s NETFILE service is available at www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/crtfdsftwr/menu-eng.html.Close
The Canada Revenue Agency (CRA) formerly mailed hard copies of the individual income tax return form and guide to Canadian taxpayers, but that service is no longer provided. Taxpayers can, however, obtain printed copies of the 2016 Individual Income Tax Return and Guide for their particular province or territory, along with a return envelope, from any post office or Service Canada office between February and early May.
Taxpayers who are unable to obtain a copy of the return from a post office or Service Canada office can have a printed copy of the return and guide mailed to them by calling the CRA’s Individual Income Tax Enquiries line at 1-800-959-8281.
The 2016 return and guide can also be printed off the CRA website, where they can be found at www.cra-arc.gc.ca/formspubs/t1gnrl/menu-eng.html.Close
The most recent release of Statistics Canada’s Labour Force Survey indicates that the overall unemployment rate fell slightly during the month of January 2017. That rate fell by 0.1%, from 6.9% to 6.8%.
The month-to-month figures for both full-time and part-time employment for the month held steady, although both were up on a year-over-year basis. There was also little employment change among most demographic groups, with the exception of an increase in employment for both men and women aged 25-54.
More details of the employment picture for the month, by province, economic sector, and demographic group, can be found in the February release of the Labour Force Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/170210/dq170210a-eng.htm?HPA=1.Close
The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns for the 2016 tax year will be available for use beginning on Monday, February 20, 2017. Returns for 2013, 2014, 2015, and 2016 can be NETFILED between February 20 and January 19, 2018.
The filing deadine for individual income tax returns for 2016 is May 1, 2017. Self-employed taxpayers and their spouses have until June 15, 2017 to file. However, all individual income taxes owed for 2016 must be paid on or before May 1, 2017, regardless of the filing deadline.
More information on the CRA’s NETFILE service can be found on the CRA’s website at www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html.Close
Recently, the Canada Revenue Agency (CRA) announced that encrypted data containing 2014 income tax information for 28,000 residents of the Yukon had been lost in transit. There is currently, according to the CRA, no indication that the encrypted data has been accessed or used.
Taxpayers who are affected by the security breach will be notified by registered mail. As well, the CRA has set up a telephone help line for anyone who has questions about their personal information. That help line can be reached at 1-866-426-1527, Monday to Friday, from 9 a.m. to 5 p.m. Pacific Standard Time.
The CRA announcement of the help line can be found on its website at http://news.gc.ca/web/article-en.do?nid=1185809&tp=980.Close
The Canada Revenue Agency (CRA) has released the T2 Corporation Income Tax Return Form to be used by corporations for the 2016 tax year.
The federal T2 is used by all federal, provincial, and territorial corporations, unless the corporation is located in Quebec or Alberta. Corporations located in those provinces must file a separate provincial corporation return.
The federal T2 return form, which is available in electronic format only, can be found on the CRA website at www.cra-arc.gc.ca/E/pbg/tf/t2/README.html.Close
The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will apply for the first quarter of 2017. Those rates are as follows:
January ………………… 3.06%
February ………………… 3.24%
March …………………… 3.34%
A listing of all prescribed interest rates for leasing rules since 2008 can be found on the CRA website at www.cra-arc.gc.ca/tx/ndvdls/fq/ls-eng.html.Close
The Canada Revenue Agency has indicated that an indexing factor of 1.4% will apply to federal individual income tax brackets for the 2017 tax year. The personal income tax brackets and rates which will apply for 2017 are therefore as follows.
$11,635 to $45,916 ………… 15%
$45,917 to $91,831 ………… 20%
$91,832 to $142,353 ……… 26%
$142,354 to $202,800 …… 29%
Over $202,800 ……………… 33%
The federal government does not impose a general or high-income individual income tax surtax.Close
The most recent release of Statistics Canada’s Consumer Price Index (CPI) indicates that the rate of inflation for December 2016 stood at 1.5%, as measured on a year-over-year basis.
Inflationary changes during the month were broad-based, as prices rose in seven of the eight major components of the index. The cost of transportation and shelter contributed the most to the year-over-year rise in the CPI, while the food index declined (on a year-over-year basis), for the third consecutive month.
More details of the inflation picture for the month, by component and by province, can be found in the January release of the Consumer Price Index, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/170120/dq170120a-eng.htm.Close
Qualifying taxpayers can claim, on their annual returns, the cost of deductible vehicle and meal expenses incurred during the year. Taxpayers have the option of claiming either actual expenses incurred, or using a simplified method, using flat rates set by the Canada Revenue Agency (CRA).
The CRA has now posted on its website the flat rate amounts for both vehicle expenses and meal expenses which may be claimed for the 2016 taxation year, on the return to be filed in the spring of 2017.
The meal rates claimable are the same for all Canadian residents, but the per-kilometre rate claimable for vehicle expenses varies by province and territory. Information on both meal rates and vehicle rates claimable for 2016 can be found on the CRA website at www.cra-arc.gc.ca/travelcosts/.Close
In its scheduled interest rate decision made on January 16, the Bank of Canada (BOC) announced that, in its view, no change was needed to current rates. Accordingly, the bank rate remains at 0.75%.
In its announcement, which can be found on the Bank website at www.bankofcanada.ca/2017/01/fad-press-release-2017-01-18/, the BOC indicated that its projections call for Canada’s real GDP to grow by 2.1% in both 2017 and 2018, with a return to full capacity around mid-2018. As well, inflation in Canada has been lower than anticipated since October, mainly because of declines in food prices, but the Bank anticipates that inflation will move close to the 2% target over the new few months, and remain at that level throughout its projection horizon.
The Bank’s next regularly scheduled interest rate announcement will take place on March 1, 2017.Close
The Canada Revenue Agency’s (CRA) NETFILE service will be available for NETFILING of individual income tax returns for the 2013, 2014, and 2015 taxation years until January 20, 2017.
After that date, it will not be possible to file returns by NETFILE until the service becomes available for filing of individual income tax returns for the 2016 taxation year. The availability date for that service will likely be around mid-February.
Information on NETFILING of individual returns for 2016, including a listing of certified software which can be used in the preparation of such returns, can be found on the CRA website at www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html.Close
The most recent release of Statistics Canada’s Labour Force Survey indicates that employment rose by 54,000 jobs during the month of December 2016, as the result of gains in full-time work.
Despite that increase, the overall unemployment rate rose by 0.1%, to 6.9%, a result attributed to an increase in the number of Canadians participating in the labour market. Employment increased among women aged 25 to 54, with little change recorded for other demographic groups.
More details of the employment picture for the month of December, by province, demographic group, and industry can be found in the January release of the Labour Force Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/170106/dq170106a-eng.htm?HPA=1.Close
The Canada Revenue Agency will be holding a three-part webinar series on the source deduction obligations of employers. The webinars are free of charge, but pre-registration is required.
The dates and topics for the webinars are as follows:
- A deeper look at CPP and EI — Wednesday, January 18, 2017
- Salary overpayments — Wednesday, February 8, 2017
- Special payments and the end of employment — Wednesday, March 1, 2017
Details of each topic, and links for on-line registration can be found on the CRA website at http://www1.webcastcanada.ca/cra-arc/home/index-e.phpClose
The Canada Revenue Agency has announced that 2016 General Income Tax and Benefit package for the 2016 taxation year will be available on its website as of Thursday, January 5.
The package, once available, will be found on the CRA website at http://www.cra-arc.gc.ca/formspubs/t1gnrl/llyrs-eng.html. No announcement has yet been made with respect to when the General Income Tax and Benefit package for 2016 will be available in hard copy.Close
The Canada Revenue Agency (CRA) has issued a listing of the administrative improvements and changes which will be in place for the upcoming 2017 filing season.
Some of the changes include the following:
- as long as the taxpayer has signed the T183 form to agree that his notice of assessment (NOA) and any future correspondence eligible for online delivery will no longer be printed and mailed, an instant message will be delivered regarding an e-filing and, within 24 hours, the NOA will be delivered directly into the EFILE certified tax preparation software, if it supports this new process;
- representatives will be able to send adjustment requests for a client's return using EFILE-certified software, for the current year and last year's return, if it supports this new process; and
- EFILE users will be able to send a payment electronically to the CRA for a taxpayer. This service will be fully implemented in all EFILE software by February 2017.
A full listing of the changes which will be implemented for the 2017 filing season can be found on the CRA website at www.cra-arc.gc.ca/nwsrm/txtps/2016/tt161216-eng.html?rss.Close
The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the first quarter of 2017, as well as the rates that will apply for the purpose of calculating employee and shareholder taxable benefits.
Debit rate Credit rate Shareholder Benefits
January 1 – March 31 5% 1% / 3% 1%
The credit rate of interest to be paid on overpayments of tax differs for individual and corporate taxpayers. The lower of the two credit rates shown is paid on corporate tax overpayments.
A listing of these and other interest rates for the first quarter of 2017 can be found on the CRA website at http://news.gc.ca/web/article-en.do?nid=1170719&tp=1.Close
Many Canadians who do not have income tax deducted from their paycheques at source pay such tax by quarterly instalments, on the 15th day of March, June, September, and December.
Individuals who make such instalment payments have three options when calculating the amount of instalment payments to make. The CRA recently issued the forms which can be used by such individuals to calculate their instalment payment amounts for 2017, and those forms can be found at www.cra-arc.gc.ca/E/pbg/tf/t2ws3/README.html.Close
The Canada Revenue Agency (CRA) has announced that it will be conducting a GST/HST compliance letter campaign pilot project over the next 9 months.
As part of that project, the Agency will send 250 letters in December followed by 250 in February, 2,500 in May, and 2,500 in August to GST/HST registrants. Those receiving a letter will be asked to review a previously-submitted GST/HST return with suspected errors and confirm whether the amounts they reported are correct or need to be changed.
The CRA announced the compliance letter campaign in the most recent issue of its Business Tax Information Newsletter, which can be found on the Agency’s website at www.cra-arc.gc.ca/esrvc-srvce/mllst/bsnss/nwslttr161212-eng.html?bsnrss.Close
As expected, the Bank of Canada made no change to current interest rates in its announcement made on December 7. Consequently, the bank rate remains at 0.75%.
In its announcement, which can be found on the Bank’s website at www.bankofcanada.ca/2016/12/fad-press-release-2016-12-07/, the Bank indicated that domestically, growth in the third quarter rebounded strongly, but that more moderate growth is expected in the fourth quarter. Total CPI inflation remains slightly below expectations, while core inflation is close to 2%.
The Bank’s next regularly scheduled interest rate announcement will be made on January 18, 2017.Close
The most recent release of Statistics Canada’s Labour Force Survey shows that the overall unemployment rate declined slightly during November, dropping from 7% to 6.8%.
During November, employment increased for men over 25 years of age but declined for women 55 years of age and older. There was little change among other demographic groups. Among the provinces, employment increased in Nova Scotia, but was down in Alberta.
More details of the employment picture for the month, by province, demographic group, and industry, can be found in the December release of the Labour Force Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/161202/dq161202a-eng.htm?HPA=1&indid=3587-2&indgeo=0.Close
The Canada Revenue Agency (CRA) regularly holds webinars for businesses on how to fulfill their payroll reporting and remittance obligations.
The last in the current series of such webinars, which will provide step-by-step instructions on how to use the Agency’s T4032 Payroll Deductions Tables, will be held on Wednesday, December 7, 2016 at 11 a.m. and 1:30 p.m. Eastern Standard Time in English, and at 9:00 a.m. Eastern Standard Time in French.
Pre-registration for the webinar is required, and information on how to register and participate can be found on the CRA website at www1.webcastcanada.ca/cra-arc/home/index-e.php.Close
The Canada Revenue Agency (CRA) has been conducting an online consultation process with respect to the rules governing the political activities of charities. Those rules impose limits on the kinds of such activities which may be engaged in by organizations which have received certification from the CRA as a registered charity.
The final deadline by which submissions may be made in order to be considered as part of that consultation process is Wednesday, December 14, 2016. Detailed information on how such submissions can be made is available on the CRA website at www.cra-arc.gc.ca/chrts-gvng/chrts/whtsnw/pacnslttns-eng.html.Close
The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation stood at 1.5% for the month of October, as measured on a year-over-year basis. The year-over-year gain for the month of September was 1.3%.
Prices were up in six of the eight major components that make up the index, with the greatest gains recorded in the cost of transportation and shelter. There was, however, a decline in the cost of food, which was down by 0.7%.
More details of the inflation picture for the month, by province and index component, can be found on the StatsCan website at www.statcan.gc.ca/daily-quotidien/161118/dq161118a-eng.htm?HPA=1&indid=3665-1&indgeo=0.Close
The Canada Revenue Agency (CRA) has issued the 2017 version of its publication T4127, which outlines and summarizes the payroll deductions formulas for computer programs which will be used beginning January 1, 2017.
The T4127 lists the federal and provincial personal income tax changes which will take effect in 2017, together with federal personal tax credit amounts. Information is also provided on required Canada Pension Plan and Employment Insurance contributions and premiums for 2017.
The newest version of the T4127, which is available in electronic format only, can be found on the CRA website at www.cra-arc.gc.ca/E/pub/tg/t4127-jan/README.html.Close
As of October 2016, changes were made to standard correspondence sent to business owners by the Canada Revenue Agency (CRA). Specifically, the CRA will be providing businesses with two new, simplified notices of assessment – one for corporate income tax and one for GST/HST.
The redesigned notices will provide an account summary on the first page and will include additional information on the CRA’s electronic services for businesses.
The announcement of the redesign of the Notices of Assessment can be found on the CRA website at www.cra-arc.gc.ca/nwsrm/txtps/2016/tt161028-eng.html?rss.Close
The federal government has announced the Employment Insurance premium rates which will apply for the 2017 calendar year.
Total insurable earnings for the year have been set at $51,300. Employee premium rates will be $1.63 per $100 of insurable earnings, to a maximum of $836.19. The employer contribution is 1.4 times the employee contribution, or $2.28 per $100 of insurable earnings. The maximum employer contribution for the year will therefore be $1,169.64.
The announcement of the rates for 2017 can be found on the federal government website at http://news.gc.ca/web/article-en.do?nid=1124559.Close
The Canada Revenue Agency (CRA) has announced the contribution rates and amounts which will apply for the 2017 calendar year. Maximum pensionable earnings for that year have been set at $55,300, and the basic exemption will remain at $3,500.
The maximum employer and employee contribution for 2017 will be $2,564.10 each, and the maximum self-employed contribution $5,128.20.
More details of CPP contribution rates and amounts for 2017 can be found in the CRA press release, available on the Agency’s website at http://news.gc.ca/web/article-en.do?nid=1145789&tp=1.Close
The most recent release of Statistics Canada’s Labour Force Survey shows that, while employment during the month of October increased by 44,000 jobs, the unemployment rate was unchanged at 7%.
The increase in employment during the month was in part-time jobs. Employment increased among youth and rose slightly for men aged 25 to 54, with little change recorded for other demographic groups. Provincially, employment was up in Ontario and British Columbia, while it declined in Newfoundland and Labrador.
More details of the employment picture for the month, by province, demographic group and industry, are outlined in the November release of the Labour Force Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/161104/dq161104a-eng.htm.Close
In his Fall Economic Statement, the Minister of Finance announced that the federal government will post a deficit of $25.1 billion for the 2016-17 fiscal year.
The full Fall Economic Statement can be found on the Finance Canada website at www.budget.gc.ca/fes-eea/2016/docs/statement-enonce/toc-tdm-en.html.Close
In its most recent announcement, the Bank of Canada indicated that in its view, no change was required to current interest rates. Accordingly, the bank rate remains at 0.75%.
In the press release announcing its decision, which is available at www.bankofcanada.ca/2016/10/fad-press-release-2016-10-19/, the Bank stated that the Canadian economy is expected to show growth starting in the second half of this year. As well, the Bank expects that the global economy will regain momentum in the second half of 2016 and through the next two years. The Bank also expects total Consumer Price Index inflation, which is now slightly below expectations, to be close to the 2% target from early 2017 onwards.
The Bank’s next regularly scheduled interest rate announcement will take place on December 17, 2016.Close
The most recent release of Statistics Canada’s Consumer Price Index shows an inflation rate of 1.3% for the month of September, as measured on a year-over-year basis.
Prices for the month were up in all major index components, with the greatest increases recorded in the cost of shelter and transportation. However, the food index posted its smallest year-over-year gain since February 2000.
More details of the inflation picture for the month, by index component and by province, can be found in the October release of the Consumer Price Index, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/161021/dq161021a-eng.htm?HPA=1&indid=3665-1&indgeo=0.Close
The Canada Revenue Agency (CRA) has announced the launch of public consultations on the rules regarding the involvement of registered charities in political activities. To that end, a consultation panel has been established to conduct online and in-person consultations and to report its recommendations to the Minister in early 2017.
Online consultations have already begun, and in-person consultation sessions with representatives from the charitable sector will be held in Halifax, Montreal, Toronto, Winnipeg, Calgary, and Vancouver later this year.
The press release announcing the consultation process, which includes a link to the online consultation website, can be found at http://news.gc.ca/web/article-en.do?nid=1130449&tp=1.Close
The Canada Revenue Agency (CRA) has announced that it will be holding consultations with small and medium sized businesses, starting this fall, on the delivery of services by the CRA. Those consultations will cover service improvements made to date by the CRA as well as new initiatives aimed at the small business sector.
The public consultation sessions will be held at a number of cities across Canada, and other sessions will also be held at which professional accountants will be able to provide comments. A listing of the locations at which the different sessions will be held can be found in the CRA press release, which is available on the Agency’s website at http://news.gc.ca/web/article-en.do?nid=1132019&tp=1.
Those who wish to participate in the sessions should go to www.cra-arc.gc.ca/gncy/srvngbttr/menu-eng.html. Those who cannot attend in person or who want to give feedback immediately can also do so online at https://www.cra-engage-arc.ca/en.Close
Final revenue and expenditure figures for the 2015-16 fiscal year have been released by the Department of Finance. Those figures show that the federal government posted a budgetary deficit of $1 billion for the fiscal year ended March 31, 2016.
For that fiscal year, revenues were up by $13.1 billion over the previous (2014-15 fiscal year), while expenses increased by $16 billion over 2014-15. The increase in revenue was largely the result of growth in income tax revenues, while the increase in expenses was attributed to larger expenditures on both major transfers to persons and other levels of government, and direct program expenses.
The Finance Canada news release summarizing the figures for 2015-16, which includes a link to the full Annual Financial Report, can be found at www.fin.gc.ca/n16/16-123-eng.asp.Close
The Canada Revenue Agency (CRA) has launched a new mobile app — My Benefits CRA — which will enable Canadians to view personalized benefit and credit information on mobile devices.
With the new app, users will be able to see when their benefits or credits will be paid, the amount of those benefit or credit payments and the status of any Canada Child Benefit application. As of October 2016, the app will also allow users to update some personal information that may affect benefit and credit eligibility, including marital status and the children under an individual’s care.
More information on the new app can be found on the CRA website at www.cra-arc.gc.ca/nwsrm/txtps/2016/tt160920-eng.html, and the Agency’s mobile app page is available at www.cra-arc.gc.ca/esrvc-srvce/mblpp/menu-eng.html.Close
The Minister of Finance has announced the start of the consultation process for the 2017-18 federal Budget.
Interested stakeholders can take part in that consultation process in a number of ways, including written and online submissions, participation in online forums and attending community consultation meetings.
The announcement of the pre-Budget consultations is available on the Finance Canada website at www.fin.gc.ca/n16/16-114-eng.asp and the Budget consultation website, which provides more details on how to participate, can be found on the same website at http://budget-lebudget.ca/.Close
The Canada Revenue Agency (CRA) has announced the interest rates that will apply to amounts owed to and by the federal government for 2016, as well as the rates that will apply for the purpose of calculating employee and shareholder taxable benefits.
Debit rate Credit Rate Shareholder
January 1 – March 31, 2016 5% 1% / 3% 1%
April 1 – June 30, 2016 5% 1% / 3% 1%
July 1 – September 30, 2016 5% 1% / 3% 1%
October 1 – December 31, 2016 5% 1% / 3% 1%
The credit rate of interest to be paid on overpayments of tax differs for individual and corporate taxpayers. The lower of the two credit rates shown is paid on corporate tax overpayments.Close
The Canada Revenue Agency (CRA) has issued a reminder to Canadians that those who are receiving benefits and credits (like the Canada Child Benefit or the Harmonized Sales Tax Credit) may be asked by the Agency to provide information or documentation to confirm their eligibility for such benefits and credits.
The most common areas of review in connection with benefits entitlement are marital status, residency and identification of a primary caregiver. The CRA’s reminder, which can be found on its website at www.cra-arc.gc.ca/bnfts/vldtn/menu-eng.html, outlines the kinds of documentation which can be used to confirm benefits entitlement, and the means by which such documents can be submitted to the CRA.
The Agency’s reminder also warns Canadians that they are required to respond to any such information request from the CRA, and that failure to do so could mean the cessation of child and family benefits or, in some situations, the need to repay benefits or credits already received.Close
The federal government has announced that employment insurance premiums paid by employers and employees will be reduced for 2017. The change in premiums follows a report by the Office of the Superintendant of Financial Institutions that the EI system is on track to balance over the course of its mandated seven-year break-even horizon.
The new rate for 2017 will be set at $1.63 per $100 of insurable earnings, down from the 2016 rate of $1.88 per $100 of insurable earnings. The news release announcing the decrease can be found on the Finance Canada website at www.fin.gc.ca/n16/16-109-eng.asp.Close
Beginning in 2016, teachers and early childhood educators who purchase school supplies for use in their classrooms will be able to claim a 15% refundable federal tax credit on up to $1,000 worth of such supplies each year.
The credit is claimable in the year during which the purchase is a made, so that eligible individuals who purchase supplies before the end of 2016 for use during the 2016-17 school year will be able to claim the credit on their 2016 tax returns.
More information on the new credit, including who may claim and the types of supplies which will qualify can be found on the Canada Revenue Agency website at http://news.gc.ca/web/article-en.do?nid=1118909&tp=1.Close
The federal Department of Finance has announced the launch of the first stage of a consultation process to be carried out with respect to the governance of the federal financial sector.
Individuals or organizations interested in submitting their views are asked to review a consultation document which can be found on the Finance Canada website at www.fin.gc.ca/activty/consult/ssge-sefc-eng.asp.
The deadline for written comments is November 15, 2016, and such comments should be sent by e-mail to LegislativeReview-ExamenLegislatif@canada.ca or by regular mail to Financial Institutions Division, Financial Sector Policy Branch, Department of Finance Canada, 90 Elgin Street, Ottawa, Canada K1A 0G5. The press release announcing the consultation process can be found at www.fin.gc.ca/n16/16-105-eng.asp.Close
The Department of Finance has issued the August release of The Fiscal Monitor, which outlines the revenue and expense figures for the federal government for the first quarter of fiscal 2016-17.
During that first quarter (April 1 to June 30), the government posted a budgetary deficit of $1 billion, compared to a surplus of $5 billion reported in the same period of 2015-16. Revenues were down $1.5 billion, largely reflecting a decrease in non-tax revenues. That decrease was attributed to the $2.1-billion gain realized on the sale of the Government’s remaining holdings of General Motors common shares in April 2015, which did not recur in 2016. Program expenses for the quarter were up $5.1 billion, reflecting increases in major transfers to persons and other levels of government, as well as direct program expenses.
More details of the federal government’s fiscal picture for the first quarter can be found in The Fiscal Monitor, which is available on the Finance Canada website at www.fin.gc.ca/fiscmon-revfin/2016-06-eng.asp.Close
Canadian taxpayers who are required to provide proof of their income can obtain a proof of income statement from the Canada Revenue Agency (CRA), either online or by telephone.
Taxpayers who have registered for the CRA’s online service My Account can use that service at www.cra-arc.gc.ca/myaccount. Those who have not registered for My Account can still get a proof of income statement by calling the CRA’s automated Tax Information Phone Service at 1-800-267-6999, and choosing option 1. The proof of income statement will then be sent by regular mail
More details on how to obtain a proof of income statement can be found in the CRA’s Tax Tip, which is available at www.cra-arc.gc.ca/nwsrm/txtps/2016/tt160823-eng.html?rss.Close
As of July 2016, the former Universal Child Care Benefit (UCCB) and the Child Tax Benefit (CTB) were replaced by the new Canada Child Benefit (CCB), a non-taxable, means-tested benefit paid to Canadian families having a child or children under the age of 18.
Families which used to receive the UCCB and/or the CTB will automatically be assessed for eligibility for the new CCB, using information provided on the 2015 tax return. Families which did not receive either of the former benefits, but which may be eligible (or newly eligible) for the CCB must apply for that benefit.
Information on how to apply and a benefits calculator can be found on the Canada Revenue Agency (CRA) website at www.cra-arc.gc.ca/bnfts/ccb/bfrppl-eng.html.Close
The benefit year for many federal and provincial tax credit and benefit programs (including the new Canada Child Benefit and the harmonized sales tax/goods and services tax credit) runs from July 2016 to June 2017. In most cases, eligibility for and/or the amount of such benefits which an individual or family can receive are based on information provided by the taxpayer in his or her 2015 tax return. Where a return is not filed, benefit payments generally cannot be made.
Taxpayers who have not yet filed their income tax return for 2015 can still do so using the Canada Revenue Agency’s online NETFILE service as that service will be available for filing of 2015 returns until January 20, 2017. More information on filing a 2015 return through NETFILE can be found at www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/menu-eng.html.Close
Canadian families that have children under the age of 18 will notice a difference in their federal government child benefit starting in July. As of this month, the existing Canada Child Tax Benefit (CCTB), National Child Benefit Supplement (NCBS), and the Universal Child Care Benefit (UCCB) programs are replaced by the new Canada Child Benefit. The first payment of the Canada Child Benefit will be received on July 20.
Families that were receiving the CCTB or the UCCB should automatically receive the new Canada Child Benefit without having to make an application. It is, however, necessary for both parents to have file a tax return for 2015.
More information the new benefit can be found on the Canada Revenue Agency website at www.cra-arc.gc.ca/nwsrm/txtps/2016/tt160718-eng.html?rss.Close
A number of tax rate and credit changes, both federal and provincial, will take effect on July 1, 2016. As well, tax changes which were announced this year to take effect as from January 1, 2016 will be reflected for the first time in source deductions made after June 30.
To take account of all these changes, the Canada Revenue Agency (CRA) has revised and re-issued its Guide T4127, containing the formulas to be used by employers for determining source deductions, starting with the first payroll in July 2016.
The updated source deduction tables, which reflect the federal and provincial tax changes, can be found on the CRA website at www.cra-arc.gc.ca/E/pub/tg/t4127-jul/t4127-jul-16e.pdf.Close
In its regularly scheduled interest rate announcement made on January 20, the Bank of Canada indicated that no change would be made to current interest rates. Consequently, the bank rate remains at 0.75%.
In the press release announcing its decision, which can be found at www.bankofcanada.ca/2016/01/fad-press-release-2016-01-20/, the Bank noted that Canada’s inflation rate is evolving largely as expected and remains near the bottom of the Bank’s target range. It also indicated that, owing to a number of factors, it expects the economy’s return to above-potential growth to be delayed until the second quarter of 2016.
The Bank’s next interest rate announcement is scheduled to take place on March 9, 2016.Close
Dollar amounts on which individual non-refundable federal tax credits for 2016 are based, and the actual tax credit claimable, will be as follows.
Credit amount Tax credit
Basic personal amount 11,474 1,721
Spouse or common-law partner amount 11,474 1,721
Eligible dependant amount 11,474 1,721
Age amount 7,125 1,069
Net income threshold for erosion of credit 35,927
Infirm dependant amount (over 18) 6,788 1,018
Net income threshold for erosion of credit 6,807
Caregiver amount (for parent or grandparent) 4,667 700
Net income threshold for erosion of credit 15,940
Disability amount 8,001 1,200
Adoption expenses credit 15,453 2,318
Medical expense tax credit threshold amount 2,237
Maximum refundable medical expense supplement 1,187
Old Age Security clawback income threshold 73,756
The spousal and eligible dependant amounts are reduced by any net income for the year of the spouse or eligible dependant.
Credit amounts are converted to a non-refundable credit by multiplying the amount by the federal rate applicable to the lowest income bracket, which is 15% for 2016.Close
Effective January 1, 2016, maximum insurable earnings for purposes of the Employment Insurance program will increase from $49,500 to $50,800. This means that an insured worker will pay EI premiums in 2016 on insured earnings up to $50,800.
In 2016, the employee EI premium rate will remain at $1.88 per $100. This premium rate and the increase in maximum insurable earnings means that insured workers will pay a maximum annual EI premium in 2016 of $955.04 compared with $930.60 in 2015.
The announcement of the premium rates for 2016 can be found on the Service Canada website at www.servicecanada.gc.ca/eng/ei/information/maximum2016.shtml.Close
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