Federal Budget - March 22, 2017

March 27, 2017 | Colleen O’ Connell-Campbell


Share

RBC Wealth Management Services was granted access to the Federal Budget lock-up in Ottawa on March 22, 2017. As a result, we are happy to provide you with the highlights of the key tax measures that are of most interest to Canadian investors. 

SOME HIGHLIGHTS for the Individual:

  • The budget DOES NOT propose a change to the current capital gains inclusion rate of 50%.
  • Public Transit Credit:  The budget proposes to eliminate this credit effective July 1, 2017. The cost of public transit passes for public transit use after June 30, 2017 will no longer be eligible for the credit.
  • Disability Tax Credit:  The budget proposes to add nurse practitioners to the list of medical practiioners that could certify eligibility for the Disability Tax Credit. It will apply to Disabiity Tax Credit certifications made on or after March 22, 2017.
  • Tuition Credit:  The budget propose to make the tuition tax credit available for fees paid to a university, college, or other post-secondary instituion in Canada for occupational skills courses that are not at the post-secondary level. For example: training in a second language.
  • Canada Caregiver Tax Credit:  The budget proposes to replace the infirm dependent credit, the caregiver credit, and the family caregiver tax credit with a new all encompassing Canada Caregiver Tax Credit for 2017 and going forward. 
  • Expansion of Employment Insurance Benefits. 
    • Caregiver Benefits:  The budget proposes to create a new EI caregiving benefit available for up to 15 weeks. 
    • Parental Benefits:  The budget proposes to extend EI parental benefits over a period of up to 18 months at a lower benefit rate of 33% average weekly earnings. The current benefits would still be available at the existing rate of 55% of average weekly earnings for a period up to 12 months.  There is also a provision to allow women to claim EI maternity benefits up to 12 weeks prior to their due date (up from 8 weeks).

Tax planning using private corporations is under scrutiny. The Government is planning further review of the use of the strategies noted below. They intend to issue a paper in the coming months setting out the nature of the issues in more detail along with proposed policy responses. This measure effectively puts business owners and accountants on notice.

  • Dividend Sprinkling
  • Holding Passive Investments inside a Private Corporation.
  • Converting a Private Corporation's Regular Income into Capital Gains

For a complete copy of the RBC Wealth Management Services article, 2017 Federal Budget, please contact our office.  If you have any questions about the Budget, how it impacts you, or any other wealth management issues, please feel free to contact us at any time.

Thank you for your business. We appreciate your trust.

Categories

Tax