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BC Budget Update

BC Finance Minister Carole James delivered the province’s 2017 budget update on Sept. 11, 2017. The budget anticipates a surplus of $46 million for the current year, $228 million in 2018-2019 and $257 million in 2019-2020. As a result of the provincial election on April 11, 2017, the measures previously announced were not fully enacted.

Here’s the new budget proposals: 

Corporate Income Tax Measures

  • Effective January 1, 2018, there will be an increase to the general corporate income tax rate from 11% to 12%.

Personal Income Tax Measures

  • Effective for 2017, there is an introduction of a new top personal tax bracket set at $150,000 for 2018. Taxable income exceeding $150,000 will be taxed at 16.8%.

Medical Services Plan Premiums

  • Effective Jan 1, 2018: 50% MSP premium reduction for households with annual net incomes up to $120,000.

Firefighter & Search & Rescue Volunteer Tax Credit

  • Introduce a new- non refundable volunteer firefighter and search and rescue volunteer tax credit.

Electricity- Provincial Sales Tax Act

  • Phase out provincial sales tax on taxable electricity.

Property transfer tax

For first time home buyers to save property transfer tax on the purchase of their property the partial exemption has been increased to $500,000 from $475,000.

To learn how these changes will affect you, please don’t hesitate to contact us. 

Ontario Budget 2017

Ontario Finance Minister Charles Sousa delivered the province’s 2017 budget on April 27, 2017. The province’s 2017 budget is balanced, with projected balanced budgets for 2018 and 2019.

Corporate Income Tax Measures

No changes to corporate taxes were announced.

Corporate Income Tax Rates- As of January 1, 2017
Ontario Combined Federal & Ont
General 11.5% 26.5%
M&P 10.0% 25.0%
Small Business* 4.5% 15.0%
*on first $500,000 of active business income
  • Review of tax planning strategies involving private corporations: Ontario intends to review tax planning strategies involving private corporations
    • Income splitting with family members
    • Passive investment portfolio inside a corporation
    • Converting regular business income to capital gains
  • Employer Health Tax Exemption: Changes to prevent the multiplication of Employer Health Tax exemption for CCPCs.
  • Small Business Deduction limit: Parallel changes made to the federal small business deduction by the same amount the federal business limit is reduced

Personal Income Tax Measures

No changes to personal taxes were announced.

Personal Combined Federal/Provincial Top Marginal Rates
2017
Interest and regular income 53.53%
Capital gains 26.76%
Eligible dividends 39.34%
Non-eligible dividends 45.30%
  • Caregiver Tax Credit: This new non-refundable 5.05% credit is available in respect of relatives who are infirm dependents, including adult children of the claimant or of the claimant’s spouse or common‐law partner
  • Ontario Seniors’ Public Transit Credit: Ontario Seniors’ Public Transit Tax Credit for all Ontarians aged 65 or older.
  • Property and land tax measures: Adjust the rules on land transfer tax including preventing qualifying purchasers from claiming their spouse’s interest for the first‐time homebuyers refund if the spouse is not a Canadian citizen or permanent resident of Canada.

Please don’t hesitate to contact us if you have any questions.

Federal Budget 2017: Business

Finance Minister Bill Morneau delivered the government’s 2017 federal budget on March 22, 2017. The budget expects a deficit of $23 billion for fiscal 2016-2017 and forecasts a deficit of $28.5 billion for 2017-2018. Find out what this means for businesses.

Small Business

  • No changes to income tax rates
  • No changes to capital gains inclusion rate

Tax Planning using private companies

While no specific measures are mentioned, the government will review the use of tax planning strategies involving private corporations “that inappropriately reduce personal taxes of high-income earners.” including:

  • Income Splitting: Reducing taxes by income splitting with family members who are subject to lower personal tax rates.
  • Regular income to Capital Gains: Converting income to capital gains (instead of income being taxed as dividends)
  • Passive income inside Corporation: Since corporate income tax rates are generally lower than personal tax rates, this strategy can facilitate the accumulation of earnings by owners of private corporations.

For Professionals

The government eliminated a tax deferral opportunity for certain professionals. Accountants, dentists, lawyers, medical doctors, veterinarians and chiropractors will no longer be able to elect to exclude the value of work in progress in computing their income. This will be phased-in over two taxation years, starting with taxation years that begin after this budget.

Please don’t hesitate to contact us if you have any questions.

Alberta Budget 2017

Alberta Finance Minister Joe Ceci delivered the province’s 2017 budget on March 16, 2017. The budget anticipates a deficit of $10.3 billion for the 2017-2018 fiscal year, $9.7 billion for 2018-2019 and $7.2 billion for 2019-2020.

Read more

BC Budget 2017

BC Finance Minister Michael de Jong delivered the province’s 2017 budget on Feb. 21, 2017. The budget anticipates a surplus of $295 million for the current year, $244 million in 2018-2019 and $223 million in 2019-2020.

Corporate Income Tax Measures

Reduction in Corporate income Tax Rate from 2.5% to 2.0% effective April 1, 2017

Corporate Income Tax Rates- As of January 1, 2017
British Columbia Combined Federal & BC
General 11% 28%
M&P 11% 26%
Small Business* 2.5%/2.0%** 13.0%/12.5%**
*on first $500,000 of active business income **effective April 1, 2017

Personal

Increase in the personal tax rate from 40.61% to 40.95% for ineligible dividends effective January 1, 2017.

Personal Combined Federal/Provincial Top Marginal Rates
2017
Interest and regular income 47.70%
Capital gains 23.85%
Eligible dividends 31.30%
Non-eligible dividends 40.95%

Medical Services Plan Premiums: Rate will remain at $75/month/adult. Effective Jan 1, 2018: 50% MSP premium reduction for households with annual net incomes up to $120,000.

Firefighter & Search & Rescue Volunteer Tax Credit: Non-refundable tax credit of up to $3,000 for 2017.

Back to School Tax Credit: Non-refundable tax credit of $250 per child (ages 5 to 17) for 2016 to 2018. Effective Jan 1, 2018, the education tax credit will be eliminated.

Electricity- Provincial Sales Tax Act: Effective Oct 1, 2017, the tax rate is reduced to 3.5% of the purchase price.

Property transfer tax: For first time home buyers to save property transfer tax on the purchase of their property the partial exemption has been increased to $500,000 from $475,000.