Tax Alerts:

The federal government has announced the Old Age Security payment rates which will be in effect for the second quarter (April 1 to June 30) of 2019.

OAS payment rates are indexed quarterly to inflation and, as the Consumer Price Index did not increase for the previous quarter, OAS amounts payable remain the same as those paid in the first quarter of 2019.

The full OAS payment for the second quarter is therefore $601.45. That rate, as well as Guaranteed Income Supplement (GIS) rates for the second quarter, are listed on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.

All payments of individual income tax owed for the 2018 taxation year must be received by the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2019.

There are a number of means by which payments of tax owed for 2018 can be made, including online banking, through the CRA’s My Payment online service, through pre-authorized debit, by credit card, by PayPal, or by Interac e-Transfer. Payments can also be made, for a fee, through third-party service providers. Finally, payment can be made in person at a financial institution or a Canada Post Outlet, or by cheque sent to the CRA.

Details of the various available payment methods, and the requirements for each, are outlined on the CRA website at https://www.canada.ca/en/revenue-agency/services/make-a-payment-canada-revenue-agency/make-payment/general-payment.html.

The Canada Revenue Agency (CRA) has issued an updated guide to be used by taxpayers who are claiming medical expenses on their income tax returns for 2018.

Individual taxpayers are entitled to claim a credit for qualifying medical expenses which exceed the lesser of 3% of their net income or $2,302.

The updated guide can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4065.html.

The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change in the overall unemployment rate for the month of March. That rate remained at 5.8%.

Employment increased in Saskatchewan, New Brunswick, and Prince Edward Island, but there was little change in the other provinces.

More details of the employment picture for the month by province, demographic group, and industry can be found in the April release of the Labour Force Survey, available on the StatsCan website at

https://www150.statcan.gc.ca/n1/daily-quotidien/190405/dq190405a-eng.htm?HPA=1&indid=3587-2&indgeo=0.

The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the month April 2019.

The prescribed rate for the upcoming month is 3.1%.

A chart showing all prescribed interest rates for leasing since 2010 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

The Canada Revenue Agency has announced the interest rates which will apply to amounts owed to and by the Agency for the first half of 2019, 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                6%                   2% / 4%       2%

April 1 – June              30                6%                  2% / 4%         2%

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 half of 2019 can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2019/interest-rates-for-the-second-calendar-quarter.html.

The Canada Revenue Agency (CRA) has posted a number of Tax Tips for seniors and students on its website. Those Tax Tips list and explain particular credits, deductions, or benefits which are most likely to be available to individuals in those groups when preparing their tax returns for 2018.

The Tax Tips for seniors can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk-seniors-money.html, while the Tax Tips for students are available at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk-students-benefits-credits.html.

The most recent release of Statistics Canada’s Consumer Price Survey indicates that the rate of inflation for the month of February, as measured on a year-over-year basis, stood at 1.5%. The comparable rate for January was 1.4%.

Inflation for the month of February was broad-based, with prices up in all eight of the major index components. The largest contributor to inflation during February was the cost of shelter, which rose by 2.4%.

Details of the inflation picture for the month, by province and index component, can be found on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/190322/dq190322a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

Budget 2019 is proposing that the excise duty framework for cannabis products be amended to more effectively apply the excise duty on new classes of cannabis products, as well as to cannabis oils, which are already legally available for sale. For most products, namely fresh and dried cannabis, and seeds and seedlings, there will be no changes to the current excise duty framework. However, for cannabis edibles, cannabis extracts (which will include cannabis oils), and cannabis topicals, excise duties will be imposed on the quantity of tetrahydrocannabinol (THC) contained in a final product. The proposed measure will come into effect on May 1, 2019.

Budget 2019 proposes to expand health-related tax relief under the Goods and Services Tax/Harmonized Sales Tax (GST/HST) system to better meet the health care needs of Canadians by:

  • providing GST/HST relief for Canadians experiencing infertility, as well as single individuals and same-sex couples who are increasingly turning to assisted human reproduction to help build their families, by relieving human ova and in vitro embryos of the GST/HST.
  • expanding the list of GST/HST-exempt health care services to specifically include a multidisciplinary health care service, such as when a physician, occupational therapist and physiotherapist combine their expertise and work together as a team to provide a rehabilitation service.
  • allowing the purchase of certain foot care devices to be relieved of the GST/HST on the written order of licenced podiatrists and chiropodists.

The changes to the GST/HST health-related measures will be effective March 20, 2019.

Budget 2019 announces the Government’s intent to limit the use of the current employee stock option tax regime and move toward aligning the tax treatment with the United States for employees of large, long-established, mature firms. Further details of this measure will be released before the summer of 2019.

Budget 2019 proposes that the Canada Revenue Agency (CRA) will be allowed to send requirements for information electronically to a bank or credit union only if the bank or credit union notifies the CRA that it consents to this method of service. This measure will apply as of January 1, 2020.

Budget 2019 proposes that the joint and several liability for tax owing on income from carrying on a business in a TFSA be extended to the TFSA holder. The joint and several liability of a trustee of a TFSA at any time in respect of business income earned by a TFSA will be limited to the property held in the TFSA at that time plus the amount of all distributions of property from the TFSA on or after the date that the notice of assessment is sent. This measure will apply to the 2019 and subsequent taxation years.

Budget 2019 proposes to introduce a new rule that would deny a mutual fund trust a deduction in respect of the portion of an allocation made to a unitholder on a redemption of a unit of the mutual fund trust that is greater than the capital gain that would otherwise have been realized by the unitholder on the redemption, if the following conditions are met:

  • the allocated amount is a capital gain; and
  • the unitholder’s redemption proceeds are reduced by the allocation.

This measure will apply to taxation years of mutual fund trusts that begin on or after Budget Day.

Budget 2019 proposes to prohibit Individual Pension Plans (IPPs) from providing retirement benefits in respect of past years of employment that were pensionable service under a defined benefit plan of an employer other than the IPP’s participating employer (or its predecessor employer). Any assets transferred from a former employer’s defined benefit plan to an IPP that relate to benefits provided in respect of prohibited service will be considered to be a non-qualifying transfer that is required to be included in the income of the member for income tax purposes. This measure applies to pensionable service credited under an IPP on or after Budget Day.

To bring the Specified Multi-Employer Plan (SMEP) rules in line with the pension tax provisions that apply to other defined benefit RPPs, Budget 2019 proposes to amend the tax rules to prohibit contributions to a SMEP in respect of a member after the end of the year the member attains 71 years of age and to a defined benefit provision of a SMEP if the member is receiving a pension from the plan (except under a qualifying phased retirement program). This measure will apply in respect of SMEP contributions made pursuant to collective bargaining agreements entered into after 2019, in relation to contributions made after the date the agreement is entered into.

Amounts paid for cannabis products may be eligible for the medical expense tax credit where such products are purchased for a patient for medical purposes in accordance with the Access to Cannabis for Medical Purposes Regulations (under the Controlled Drugs and Substances Act). However, cannabis is no longer regulated under this Act. Instead, as of October 17, 2018, access to cannabis is subject to the Cannabis Regulations (under the Cannabis Act). Eligible expenses for the medical expense tax credit will also include expenses for other classes of cannabis products purchased for a patient for medical purposes, once they become permitted for legal sale under the Cannabis Act. Budget 2019 proposes to amend the Income Tax Act to reflect the current regulations for accessing cannabis for medical purposes. This measure will apply to expenses incurred on or after October 17, 2018.

A recent court decision related to the interpretation of “national importance” has created uncertainty about the availability of these tax incentives. Budget 2019 proposes to introduce legislative amendments to ensure that the tax incentives continue to be available for donations of cultural property of outstanding significance made to designated institutions in Canada. This measure will apply in respect of donations made on or after Budget Day.

Budget 2019 proposes to amend the Income Tax Act to clarify that financial assistance payments received by care providers under a kinship care program are neither taxable nor included in income for the purposes of determining entitlement to income-tested benefits and credits. This measure will apply for the 2009 and subsequent taxation years

Budget 2019 proposes to amend the Income Tax Act to clarify that an individual may be considered to be the parent of a child in their care for the purpose of the Canada Workers Benefit, regardless of whether they receive financial assistance from a government under a kinship care program. Kinship care providers will thus be eligible for the Canada Workers Benefit amount available for families, provided all other eligibility requirements are met. This measure will apply for the 2009 and subsequent taxation years.

To ensure that the Registered Disability Savings Plan (RDSP) continues to respond to the needs of Canadians with disabilities, Budget 2019 proposes two changes that will better protect the long-term savings of persons with disabilities:

  • Budget 2019 proposes to eliminate the requirement to close an RDSP when a beneficiary no longer qualifies for the DTC. Doing so will allow grants and bonds otherwise required to be repaid to the Government to remain in the RDSP.
  • Budget 2019 also proposes to exempt RDSPs from seizure in bankruptcy, with the exception of contributions made in the 12 months before the filing.

Budget 2019 proposes to amend the tax rules to permit PRPPs and defined contribution RPPs to provide a variable payment life annuity (VPLA) to members directly from the plan. A VPLA will provide payments that vary based on the investment performance of the underlying annuities fund and on the mortality experience of VPLA annuitants.

Budget 2019 proposes to amend the tax rules to permit an advanced life deferred annuity (ALDA) to be a qualifying annuity purchase, or a qualified investment, under certain registered plans. An ALDA will be a life annuity the commencement of which may be deferred until the end of the year in which the annuitant attains 85 years of age.

To improve the consistency of the tax treatment of owners of multi-unit residential properties in comparison to owners of single-unit residential properties, Budget 2019 proposes to allow a taxpayer to elect that the deemed disposition that normally arises on a change in use of part of a property not apply. This measure will apply to changes in use of property that occur on or after Budget Day.

Budget 2019 proposes to increase the Home Buyers’ Plan (HBP) withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019. Budget 2019 also proposes to extend access to the HBP in order to help Canadians maintain homeownership after the breakdown of a marriage or common-law partnership.

Budget 2019 proposes this new, non-taxable credit that would help Canadians pay for training fees. Every year, eligible workers between the ages of 25 and 64 would accumulate a credit balance of $250 per year, up to a lifetime limit of $5,000. With this credit, a Canadian worker would accumulate $1,000 every four years, to be used for training fees. The accumulation of this refundable tax credit would be available to workers with earnings of at least $10,000 (including maternity and parental benefits) and income less than around $150,000 a year ($147,667 in the 2019 tax year). Canadians would be able to apply their accumulated Canada Training Credit balance against up to half the cost of training fees at colleges, universities, and eligible institutions providing occupational skills training starting in 2020. Canadians would claim this refund when they file their tax return.

Budget 2019 proposes to:

  • extend the foreign affiliate dumping rules in the Income Tax Act to prevent a corporation resident in Canada that is controlled by a non-resident individual or trust from reducing its tax payable by investing in a foreign affiliate.
  • introduce an ordering rule to ensure that the transfer pricing rules (i.e., rules that apply to certain international transactions) in the Income Tax Act apply before other provisions of the Act.
  • ensure that the term “transaction” has the same meaning in both the transfer pricing rules and the assessment rules in the Income Tax Act.
  • prevent non-resident taxpayers from avoiding Canadian dividend withholding tax on compensation payments made under cross-border share lending arrangements with respect to Canadian shares.

In Budget 2019, the Government proposes further amendments to the Income Tax Act to make the beneficial ownership information maintained by federally incorporated corporations more readily available to tax authorities and law enforcement.

Budget 2019 proposes an amendment that introduces an additional qualification for the commercial transaction exception in the definition “derivative forward agreement” as the exception applies to purchase agreements.

Budget 2019 proposes to add The Memorandum of Understanding between the Government of Canada and the Respective Governments of the Flemish, French and German-speaking Communities of the Kingdom of Belgium concerning Audiovisual Coproduction to the list of instruments under which a film or video production may be produced in order to qualify as a treaty co-production. This measure will allow joint projects of producers from Canada and Belgium to qualify for the Canadian film or video production tax credit and will apply as of March 12, 2018.

Budget 2019 proposes to repeal the use of taxable income as a factor in determining a CCPC’s annual expenditure limit for the purpose of the enhanced SR&ED tax credit. As a result, small CCPCs with taxable capital of up to $10 million will benefit from unreduced access to the enhanced refundable SR&ED credit regardless of their taxable income. As a CCPC’s taxable capital begins to exceed $10 million, this access will gradually be reduced. This measure will apply to taxation years that end on or after Budget Day.

Budget 2019 proposes to eliminate the requirement that sales be to a farming or fishing cooperative corporation in order to be excluded from specified corporate income. As such, this exclusion will apply to the income of a CCPC from sales of the farming products or fishing catches of its farming or fishing business to any arm’s length purchaser corporation. However, consistent with the existing rules, amounts allocated to a CCPC as patronage payments from a purchaser corporation will not qualify for this exclusion. This measure will apply to taxation years that begin after March 21, 2016.

Budget 2019 proposes that these vehicles be eligible for a full tax write-off in the year they are put in use. Qualifying vehicles will include electric battery, plug-in hybrid (with a battery capacity of at least 15 kWh), or hydrogen fuel cell vehicles, including light-duty, medium-duty, and heavy-duty vehicles purchased by a business. Immediate expensing will apply to eligible vehicles purchased on or after March 19, 2019 and before January 1, 2024. Capital costs for eligible zero-emission passenger vehicles will be deductible up to a limit of $55,000 plus sales tax.

Budget 2019 proposes to introduce three new tax measures to support Canadian journalism:

  • allowing journalism organizations to register as qualified donees;
  • a refundable labour tax credit for qualifying journalism organizations; and
  • a non-refundable tax credit for subscriptions to Canadian digital news.

The most recent release of Statistics Canada’s Labour Force survey shows that, while the rate of unemployment for the month of February was unchanged, employment grew by 56,000 positions. The unemployment rate for the month was 5.8%.

The province of Ontario was the only one to show significant employment gains for the month, while employment declined in Manitoba and was largely unchanged in the other provinces.

More details of the employment picture for the month, by province, sector, and demographic group, are summarized in the March release of the Labour Force Survey, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/190308/dq190308a-eng.htm.

In its regularly scheduled interest rate announcement made on March 6, the Bank of Canada indicated that, in its view, no change was needed to current rates. Accordingly, the Bank Rate remains at 2%

In the announcement, which can be found on the Bank’s website at https://www.bankofcanada.ca/2019/03/fad-press-release-2019-03-06/, the Bank stated that the temporary slowdown which it had forecast for the last quarter of 2018 had been sharper and more broadly based than anticipated. In the Bank’s view, the economy will be weaker during the first half of 2019 than originally projected. The Bank also expects that the rate of inflation will be slightly below the 2% target for most of 2019.

The Bank’s next regularly scheduled interest rate announcement will take place on April 24, 2019.

The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows a drop in the rate of inflation for the month of January. That rate, as measured on a year-over-year basis, was 1.4%. The equivalent rate for December 2018 was 2%.

The biggest contributor to the decrease in the inflation rate was a 6.9% drop in energy prices, particularly gasoline. Excluding gasoline, the CPI for the month was up 2.1% on a year-over-year basis.

More details of the inflation picture for January, by province and index component, are summarized in the February release of the Consumer Price Index, which can be found on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/190227/dq190227a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

The first instalment payment of individual income taxes for the 2019 tax year is due on or before Friday March 15, 2019. Individuals who have previously paid tax by instalments will have received an instalment reminder, which sets out the payment amount to be made by March 15.

Canadians who wish to pay tax by instalments but who did not receive an instalment reminder can calculate instalment amounts for themselves. The calculation sheet for doing so can be found on the Canada Revenue Agency website at https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/Instalment_chart_fill-19e.pdf.

More information on the instalment payments system generally Is available on the same website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments.html.

The Canada Revenue Agency (CRA) has announced that its Individual Income Tax Enquiries line (1-800-959-8281) is now available for extended hours.

Until April 30, 2019, telephone agents will be available Monday to Friday (except holidays) from 9 am to 9 pm (local time), and from 9 am to 5 pm (local time) on Saturdays (except Easter weekend). The CRA’s automated information service will remain available 24 hours a day, 7 days a week.

The announcement of the extended hours can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/2019/02/the-canada-revenue-agency-launches-the-2019-tax-filing-season.html.

The Minister of Finance has announced that the 2019-20 federal Budget will be brought down on Tuesday, March 19, 2019.

Once the Budget is released, at around 4 p.m., the Budget Papers will be posted on the Finance Canada website at https://www.fin.gc.ca/access/budinfo-eng.asp.

The announcement of the Budget date can be found on the Finance Canada website at https://www.fin.gc.ca/n19/19-015-eng.asp.

The 2018 T1 Individual Income Tax Return and Guide package is now available on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html.

The CRA has also announced that it has mailed the income tax package for 2018 to individuals who filed on paper for the 2017 taxation year. Such mailings were to take place in the first half of February.

Finally, a “limited” quantity of tax return and guide packages are being made available at Canada Post and Service Canada locations and, in Quebec only, at some Caisse Populaire Desjardin outlets.

The CRA’s announcement of its distribution of the Income Tax Return and Guide Package for 2018 can be found at https://www.canada.ca/en/revenue-agency/news/2019/02/the-canada-revenue-agency-launches-the-2019-tax-filing-season.html.

The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns is available as of Monday, February 18, 2019.

The current NETFILE service (which will be available until Friday, January 24, 2020) can be used for the filing of individual income tax returns for the 2015, 2016, 2017, and 2018 taxation years.

More information on the NETFILE service can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview.html.

The Canada Revenue Agency (CRA) has issued a Tax Tip for post-secondary students and graduates who will be filing an income tax return for the 2018 tax year.

That Tax Tip, which can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk-students-benefits-credits.html, lists the most common credits and deductions which are normally claimed by those attending post-secondary education, as well as graduates.

The topics covered in the Tax Tip include the tuition tax credit, the credit for interest paid on student loans, eligible moving expenses, child care expenses, the Canada Child Benefit, the Working Income Tax Benefit, the Goods and Services/Harmonized Sales Tax Credit and the Climate Action Incentive Payment. A link is also provided to the Community Volunteer Income Tax Program, which prepares income tax returns free of charge for eligible taxpayers.

During the month of January, the number of people employed in Canada rose by 67,000, with that figure attributable for most part to increased employment of those aged 15 to 24 and those working in the services-producing industries

Notwithstanding that increase, the most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of January, as measured on a year-over-year basis, rose by 0.2%, as more people looked for work. The unemployment rate for the month stood at 5.8%.

During January, while employment in services rose, there was a decline in employment in the goods-producing industries. More details of the employment picture for the month, by industry, demographic group, and province, can be found in the February release of the Labour Force Survey, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/190208/dq190208a-eng.htm?HPA=1&indid=3587-2&indgeo=0.

The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of March 2019.

That prescribed rate for the month of March will be 3.11%.

A chart showing all prescribed interest rates for leasing since 2010 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

The Canada Revenue Agency (CRA) has posted a Tax Tip which lists the tax deductions and credits which are most relevant to seniors, and which can be claimed by eligible seniors when preparing and filing their tax returns for 2018.

That Tax Tip, which can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk-seniors-money.html, lists and provides a brief description of the various tax measures which will allow seniors to reduce their tax payable for the year. The Tax Tip includes a link to a listing of free tax return preparation clinics, as well as information on the most common kinds of tax scams and advice on how to avoid becoming a victim of such scams.

The Canada Revenue Agency (CRA) has announced that its NETFILE service for the filing of individual income tax returns for the 2018 tax year will be available online on Monday February 18, 2019. The NETFILE service is currently closed.

The T1 General Income Tax Return and Guide for 2018 will be made available on the same date.

The CRA announcement, and more information on the NETFILE service generally, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/certified-software-netfile-program.html.

Effective as of February 11, 2019, the Canada Revenue Agency (CRA) will be merging its online mail and account alerts services. Notification of the change is being sent to users of those services, and such individuals will automatically be registered for the new service, unless they choose to opt out before February 8.

More information on the combined service and how to register or opt out can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/online-mail-helping-you-organize-your-canada-revenue-agency-mail.html.

Finance Canada has issued a reminder that the current consultation process with respect to the upcoming 2019-20 federal Budget will end on Tuesday, January 29, 2019.

Interested stakeholders can make their views known through an online survey — available at https://www.budget.gc.ca/2019/prebudget-prebudgetaire/index-en.html?utm_source=FIN&utm_medium=homepage&utm_campaign=PBC19 — or, for more lengthy submissions, can send an email. An email link can be found on the budget survey page.

The date for the 2019-20 federal Budget has not yet been announced.

The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation, as measured on a year-over-year basis, stood at 2% during the month of December 2018. The equivalent rate for November was 1.7%.

While the price of energy was down during December, that decrease was offset by cost increases in the price paid by consumers for various services. The cost of such services rose 3.5% for the month, also as measured on a year-over-year basis.

More details of the inflation picture for the month, by province and index component, can be found in the January release of the Consumer Price Index, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/190118/dq190118a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

Finance Canada has announced the automobile deduction limits and expense benefit rates which will apply to businesses and their employees during the 2019 taxation year.

Most of the limits which applied during 2018 are unchanged, with only two exceptions. Those exceptions, as well as a summary of the 2018 rates which will continue to apply in 2019, can be found in the Finance Canada release, which is available at https://www.fin.gc.ca/n18/18-125-eng.asp.

In its regularly scheduled interest rate announcement made on January 9, 2019, the Bank of Canada indicated that no change would be made to current interest rates. The Bank Rate therefore remains at 2%.

In its announcement, which can be found at https://www.bankofcanada.ca/2019/01/fad-press-release-2019-01-09 the Bank indicated that core inflation measures remain close to 2%. As expected, CPI inflation eased to 1.7% in November, due to lower gasoline prices. Projections call for CPI inflation to edge further down and be below 2% through much of 2019, owing mainly to lower gasoline prices.

The Bank’s next regularly scheduled interest rate announcement will take place on March 6, 2019.

The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will be in effect during the months of January and February 2019.

The prescribed rate for January is 3.39%, and the rate for February will be 3.12%.

A chart showing all prescribed interest rates for leasing since 2010 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

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 2019, 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 6% 2% / 4% 2%

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 2019 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/interest-rates-for-the-first-calendar-quarter.html.

Over the next seven years, significant changes will be made to the Canada Pension Plan. Those changes will result, overall, in an increase of about 50% in the maximum retirement benefit.

The first such change will take effect on January 1, 2019, when the required contribution rate (for both employers and employees) will increase to 5.1% of pensionable earnings. More information on the changes can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/news/2018/10/the-canada-pension-plan-enhancement–businesses-individuals-and-self-employed-what-it-means-for-you.html.

The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of November, as measured on a year-over-year basis, stood at 1.7%. The comparable rate for October was 2.4%

The rate for November marked the smallest increase since January 2018, a result attributed by StatsCan to recent decreases in the price of gasoline. Prices were, however, up in all other major index components, with the mortgage interest cost index recording its largest year-over-year gain since October 2008.

More details of the inflation picture for the month, by province and index component, can be found in the December release of the Consumer Price Index, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/181219/dq181219a-eng.htm?HPA=1.

Taxpayers who have not yet filed their individual income tax returns for 2017 (or the three prior years) can file those returns on NETFILE until Friday, January 25, 2019. Until that date, the Canada Revenue Agency’s (CRA’s) NETFILE service will accept such returns for the 2014, 2015, 2016, and 2017 taxation years.

After January 25, the NETFILE service will be unavailable for a period of several weeks, while it is re-configured for the filing of returns for the 2018 tax year.

More information on how to file a prior-year return on NETFILE can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview.html.

The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of January 2019.

The prescribed rate for that month will be 3.39%.

A chart showing all prescribed interest rates for leasing since 2010 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

Where taxpayers fail to meet their tax filing or payment obligations, penalties and interest are usually levied for that failure. However, the Minister of National Revenue has the authority to forgive or waive such penalty and interest charges where the failure to file or pay was the result of circumstances beyond the taxpayer’s control.

The discretion of the Canada Revenue Agency (CRA) to grant such penalty or interest relief is limited to any period that ended within 10 calendar years before the year in which the request is made. Consequently, any request for relief made with respect to the 2008 taxation year must be filed on or before December 31, 2018.

The form used to apply for such interest and/or penalty relief can be found on the CRA website at Form RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest. More information on the circumstances in which relief may be provided is available at Taxpayer relief provisions.

The most recent release of Statistics Canada’s Labour Force Survey shows that the unemployment rate for the month of November was the lowest recorded since 1976.

The unemployment rate for the month, as measured on a year-over-year basis, was 5.6%. Employment was up in six of the ten provinces, with a total gain of 94,000 jobs.

More details of the employment picture for the month, by province, sector, and demographic group, can be found in the December release of the Labour Force Survey, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/181207/dq181207a-eng.htm?HPA=1&indid=3587-2&indgeo=0.

In its regularly scheduled interest rate announcement made on December 5, the Bank of Canada indicated that, in its view, no change to current interest rates was needed. Accordingly, the Bank Rate remains at 2%.

The Bank’s announcement, which can be found on its website at https://www.bankofcanada.ca/2018/12/fad-press-release-2018-12-05/, indicates that the Canadian economy as a whole has grown in line with the Bank’s projection, but that the recent fall in oil prices means that activity in the energy sector will likely be materially weaker than expected. The rate of inflation has been evolving as expected, but will likely ease in coming months due to lower gasoline prices.

The Bank’s next regularly scheduled interest rate announcement will take place on January 9, 2019.

The federal government will provide the following personal tax credit amounts for 2019:

Basic personal amount ……………………………… $12,069

Spouse or common law partner amount …… $12,069, less spouse’s net income for the year

Age amount ………………………………………………… $7,494

Disability amount ………………………………………… $8,416

All such credit amounts are multiplied by 15% to determine the actual tax credit which can be deducted from federal income tax otherwise payable. A full listing of personal tax credit amounts which can be claimed for 2019, and the income thresholds which may apply to each, is set out in the federal TD1 form and worksheet for 2019, which are available at https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later.html.

The most recent release of Statistics Canada’s Consumer Price Index shows a slight increase in the rate of inflation rate for the month of October. That rate rose 2.4%, following a 2.2% increase for the month of September. Both rates are as measured on a year-over-year basis.

During October, prices rose in all major components of the index, with increases in the cost of transportation and shelter contributing most to inflation for the month.

More details of the inflation picture for the month, by region and by index component, can be found in the November release of the Consumer Price Index, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/181123/dq181123a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

Finance Canada has announced details of the consultation process leading up the release of the 2019-20 Federal Budget next spring.

The budget consultation process will include both in-person and digital events, but details of those events have yet to be announced. The federal government has, however, created a website to which budget submissions can be sent. That website can be found at https://www.budget.gc.ca/2019/prebudget-prebudgetaire/index-en.html.

The press release outlining the upcoming budget consultation process is available at https://www.fin.gc.ca/n18/18-110-eng.asp.

In the 2018-19 Fall Economic Statement, the Minister of Finance announced that three new tax initiatives would be introduced to support both traditional and digital news organizations.

Those changes will allow non-profit journalism organizations to issue charitable donation receipts for contributions made and will provide a new refundable tax credit to non-profit and for-profit news organizations, to help offset the labour costs of producing original news content. In addition, qualifying subscribers to eligible digital news media will be able to receive a temporary, non-refundable 15% tax credit.

More information on the changes can be found on the Finance Canada website at https://www.budget.gc.ca/fes-eea/2018/docs/statement-enonce/chap02-en.html#s2.

In the Fall Economic Statement issued on November 21, the Minister of Finance announced new tax measures that would:

  • allow businesses to immediately write off the cost of machinery and equipment used for the manufacturing or processing of goods; and
  • allow businesses to immediately write off the full cost of specified clean energy equipment to spur new investments and the adoption of advanced clean technologies.

In addition, a new Accelerated Investment Incentive (in the form of accelerated capital cost allowance) will be made available for businesses of all sizes, in all sectors of the economy, which are making capital investments.

Each of these measures is effective for qualifying acquisitions made after November 20, 2018. More information on each can be found in the Fall Economic Statement, which is available on the Finance Canada website at https://www.budget.gc.ca/fes-eea/2018/docs/statement-enonce/anx03-en.html.

Some of the non-monetary benefits which employers provide to their employees must be included in the employee’s income and taxed as such. Each year, employers must include the amount of any such taxable benefits on the T4 and T4A information slips issued to employees for tax reporting purposes.

The CRA recently issued its 2018 Employers’ Guide to Taxable Benefits and Allowance. That guide identifies, for the 2018 tax year, which employee benefits are taxable and how each such tax benefit is to be calculated.

The 2018 guide, which includes information on such benefits as automobile and motor vehicle benefits and allowances, employee loans, moving expense and relocation benefits, child care expenses, and cell phone and internet services, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4130.html.

The Canada Revenue Agency (CRA) provides a mobile web app for small business owners and sole proprietors which enables them to manage their business tax accounts on any browser-enabled mobile device.

Features available through the CRA’s BizApp were recently enhanced, and those enhancements will now allow users to make secure payments using a mobile phone, make payroll remittances, pay GST/HST and corporate income tax instalments, view payroll accounts, and generate a QR code to make payments at Canada Post outlets.

More information on the enhancements and on BizApp generally can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/whats-new-for-cra-bizapp.html.

The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in unemployment during the month of September. That rate stood at 5.8%, down 0.1% from the rate posted for August.

Employment figures were steady in most provinces, with the exception of Saskatchewan, which recorded a slight increase in employment. Across the country, there was little change in private sector employment and self-employment, while public sector employment declined slightly.

More details of the employment picture for the month can be found in the November release of the Labour Force Survey, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/181102/dq181102a-eng.htm?HPA=1.

The Canada Revenue Agency has announced the contribution rates and amounts for the Canada Pension Plan which will apply during the 2019 calendar year, and that announcement can be found at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/maximum-pensionable-earnings-2019.html.

The yearly maximum pensionable earnings(YMPE) for 2019 will be $57,400 and the basic exemption amount is unchanged at $3,500.

The contribution rate for 2019 is increased from 4.95% to 5.1% for both employers and employees. As a result, the maximum employer and employee contribution for 2019 will be $2,748.90 each. The maximum contribution for self-employed individuals, who pay both the employer and employee portions, will be $5,497.80.

The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of November.

The prescribed rate for that month will be 3.43%.

A chart showing all prescribed interest rates for leasing since 2009 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

The Canada Revenue Agency (CRA) (as well as other federal government departments and agencies) has issued information indicating how government payments will be handled during the current postal disruption.

The CRA Tax Tip, which can be found at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/important-notice-about-a-postal-disruption.html, indicates that many benefit payments, like the Canada Child Benefit, were sent out early, but that the payment date on such cheques was not changed. Other mail to or from the CRA, including refunds, rebates, and other benefit payments may be delayed or will be held and delivered once normal postal operations are resumed.

The postal disruption does not affect amounts which are paid to the taxpayer by direct deposit.

The most recent release of Statistics Canada’s Consumer Price Index shows that the inflation rate for the month of September stood at 2.2%, as measured on a year-over-year basis. The comparable rate for August was 2.8%.

Inflation during September was broad-based, with prices rising in all eight major index components. As in August, the transportation index was the largest contributor to inflation for the month.

More details of the inflation picture, by index component and by province, can be found in the October release of the Consumer Price Index, which can be found on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/181019/dq181019a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

In its regularly scheduled interest rate announcement made on October 24, the Bank of Canada once again increased the bank rate, which now stands at 2%.

In the press release announcing the increase, which is available on the Bank’s website at https://www.bankofcanada.ca/2018/10/fad-press-release-2018-10-24/, the Bank indicated that growth in the Canadian economy is expected to average 2% during the second half of 2018. As well, the Bank’s core measures of inflation all remain at around 2%, which the Bank views as consistent with an economy that is operating at capacity.

The Bank’s next interest rate announcement is scheduled to take place on Wednesday, December 5, 2018.

The federal government has announced the maximum Old Age Security (OAS) benefit amount which will be paid to eligible recipients in the last quarter — October, November, and December — of 2018.

The increase for that quarter, based on changes to the Consumer Price Index, is 0.7%. The maximum OAS benefit payable during the quarter will be $600.85 per month, and recipients whose income is between $75,910 and $123,386 will have some or all of that benefit clawed back by the OAS recovery tax.

More information on OAS rates for the quarter, including Guaranteed Income Supplement amounts, can be found on the Government of Canada website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.

In some circumstances, taxpayers are entitled to request a reduction in the amount of tax being deducted at source from their income. An employee can request that the amount of income tax being deducted from his or her paycheque be reduced, and recipients of Old Age Security benefits can request that the amount of any OAS recovery tax be similarly reduced.

The Canada Revenue Agency (CRA) recently re-issued the forms to be used by taxpayers in each of those circumstances. The updated forms can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html and https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213oas.html.

A number of changes have been made over the past few years to the Canada Pension Plan (CPP), with those changes generally providing greater flexibility to CPP contributors. Some of those changes particularly affect self-employed individuals, and the Canada Revenue Agency (CRA) will be holding a webinar on Wednesday November 7 (postponed from an earlier date) to review and explain the CPP changes as they affect such individuals.

The webinar, entitled Self-Employed: What the CPP Enhancement means for you, will be held at 1 p.m. Eastern Time. There is no charge for the webinar, and information on how to register can be found on the CRA website at https://www1.webcastcanada.ca/cra-arc/registration/10182eng.php.

The most recent release of Statistics Canada’s Labour Force Survey shows a small decrease in the overall unemployment rate for the month of September. That rate decreased from the 6% rate recorded for the month of August to 5.9% for September, a result attributed by StatsCan to an increase in part-time employment.

Among the provinces, employment was up in Ontario and British Columbia, with little change recorded for the other provinces.

Details of the employment picture for the month, by province, sector, and demographic group are outlined in the October release of the Labour Force Survey, which is available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/181005/dq181005a-eng.htm?HPA=1&indid=3587-2&indgeo=0.

The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of October.

The prescribed rate for that month will be 3.33%.

A chart showing all prescribed interest rates for leasing since 2009 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of October.

The prescribed rate for that month will be 3.33%.

A chart showing all prescribed interest rates for leasing since 2009 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.
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Prescribed interest rates for the fourth quarter of 2018

The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the fourth quarter of 2018, as well as the rates that will apply for the purpose of calculating employee and shareholder taxable benefits.

Debit rate Credit rate Shareholder Benefits

October 1 – December 31 6% 2% / 4% 2%

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 fourth quarter of 2018 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/interest-rates-fourth-quarter.html.

While the deadline for filing of individual income tax returns for the 2017 tax year (for both employees and the self-employed) has passed, the Canada Revenue Agency’s (CRA’s) NETFILE service through which such returns can be filed online remains available.

That NETFILE service can also be used for the online filing of individual income tax returns for the 2014, 2015, and 2016 taxation years. The service will be available for all such prior year filings until Friday January 25, 2019.

More information on how to NETFILE a prior year return can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview.html.

The most recent release of Statistics Canada’s Consumer Price Index shows that the rate of inflation for the month of August 2018 stood at 2.8%, as measured on a year-over-year basis. The comparable rate for July was 3%.

Inflation during the month of August was broad-based, with prices up in all eight major index components. Among the provinces, prices rose less on a year-over-year basis in eight provinces, when compared to the month of July. The exceptions to that trend were Nova Scotia and Ontario, where the inflation rate was unchanged.

Details of the inflation picture for the month of August, by province and by index component, can be found in the September release of the Consumer Price Index, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180921/dq180921a-eng.htm?HPA=1.

Canada’s tax system is one based on residency, and individuals who are considered to be residents of Canada are subject to federal and provincial tax.

The federal government has issued a fact sheet (RC643(E)) for use by individuals who are working in Canada temporarily, to help them determine their residency status and tax obligations.

For Canadian tax purposes, such individuals may be considered factual residents, deemed residents, non-residents, or deemed non-residents. The fact sheet, which is available at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc643.html, outlines the criteria used to determine the characterization of an individual’s residency status, and summarizes the resulting tax obligations in each category.

The Minister of Finance has announced that the employment insurance premium rate payable by employees and the self-employed for the 2019 tax year will be reduced.

The premium rate for that year will be $1.62 per $100 of earnings, which represents a 4-cent decrease from the rate levied during 2018.

The press release announcing the 2019 rate can be found on the Department of Finance website at https://www.fin.gc.ca/n18/18-078-eng.asp.

The federal government has updated and re-issued its guide to child benefits paid by the federal and several provincial governments.

The updated guide (T4114), which is available on the Canada Revenue Agency (CRA) website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4114.html, reviews the eligibility criteria and application and payment processes for the federal Canada Child Benefit, and outlines the related benefits which are available in the provinces of Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Nunavut, Ontario, and the Yukon Territory. The benefits for each of these jurisdictions are administered by the CRA.

The updated publication also covers Quebec child assistance payments, which are administered by the government of Quebec.

The most recent release of Statistics Canada’s Labour Force Survey shows a small increase in the unemployment rate posted for the month of August. That rate rose by 0.2%, from 5.8% to 6%.

Most of the job loss recorded was in part-time employment, which fell by 92,000. Among the provinces, employment declined in Ontario and increased in Alberta and Manitoba, with little change in the other provinces.

More details of the employment picture for the month, by demographic group, economic sector and province, can be found in the September release of the Labour Force Survey, which is available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180907/dq180907a-eng.htm?HPA=1.

The Canada Revenue Agency (CRA) can provide interest and penalty relief to taxpayers who are unable to meet their tax filing or payment obligations due to circumstances beyond their control, including natural disasters.

Such relief is provided through the Agency’s Taxpayer Relief Program, and the CRA recently issued a reminder to Canadians who have been affected by this summer’s wildfires, encouraging them to seek such administrative relief. Requests for relief can be made online, using Form RC4288, or by calling 1-800-959-8281 for individual enquires or 1-800-959 5525 for business enquiries. All requests are considered on a case-by-case basis.

The CRA’s press release reminding affected taxpayers of the availability of the Taxpayer Relief Program (which includes a link to Form RC 4288) can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/news/2018/08/canada-revenue-agency-offers-taxpayer-relief-to-canadians-affected-by-wildfires.html.

In its scheduled interest rate announcement made on September 5, the Bank indicated that no change would be made to current interest rates. Accordingly, the Bank Rate remains at 1.75%.

The Bank acknowledged that the 3% inflation rate recorded for the month of July was higher than expected, but indicated that, in its view, inflation would move back toward the Bank’s 2% target in early 2019. As well, the Bank’s core measures of inflation remain “firmly” around 2%.

The press release announcing the Bank’s decision can be found on its website at https://www.bankofcanada.ca/2018/09/fad-press-release-2018-09-05/. The next scheduled interest rate announcement date is October 24, 2018.

Each year the Canada Revenue Agency (CRA) sends a letter and questionnaire to approximately 350,000 taxpayers, seeking to determine whether such taxpayers are receiving the correct tax credits and benefits (including the Harmonized Sales Tax Credit and the Child Tax Benefit).

The CRA recently issued a Tax Tip providing information on the benefits review process and the steps taxpayers should take if they are contacted by the CRA for purposes of a benefit review.

That Tax Tip can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/benefits-reviewed.html.

The due date for the third instalment payment of 2018 income taxes by individuals falls on September 15, 2018. As that date is a Saturday, instalment payments will be considered to be made on time if they are made by the end of the day on Monday September 17.

Individuals who pay tax by instalments will have received an Instalment Reminder from the Canada Revenue Agency (CRA) which specifies the amount of payment to be made in September. More information on how to make that payment and the general rules regarding instalment payments of income tax can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments.html.

The federal government has announced that changes will be made to the administrative rules governing the extent to which charities can engage in non-partisan political activities.

The intended amendments will allow charities to pursue their charitable purposes by engaging in non-partisan political activities and in the development of public policy. Charities will still be required to have exclusively charitable purposes and restrictions against partisan political activities will remain.

The announcement of the policy developments can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/news/2018/08/statement-by-the-minister-of-national-revenue-and-minister-of-finance-on-the-governments-commitment-to-clarifying-the-rules-governing-the-political.html.

The most recent release of Statistics Canada’s Consumer Price Survey shows a significant increase in inflation for the month of July. That rate, as measured on a year-over-year basis, stood at 3%. The rate for the month of June was 2.5%.

While price increases were recorded for all eight of the index components, the largest contributor to inflation during the month was the transportation index, which rose by 8.1%.

Details of the inflation picture for the month, by index component and by province, can be found in the August release of the Consumer Price Index, which is available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180817/dq180817a-eng.htm?HPA=1.

The most recent release of Statistics Canada’s Labour Force Survey indicates that the overall rate of unemployment was down slightly for the month of July. That rate stood at 5.8%, down by 0.2% from the rate recorded for the month of June.

The increase in employment was driven by public sector employees, with little change recorded in the number of private sector employees and the self-employed. Employment for the month rose by 54,000, most of that in part-time positions.

More details of the employment picture for the month, by province, sector, and demographic group, are outlined in the August release of the Labour Force Survey, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180810/dq180810a-eng.htm?HPA=1.

The Minister of Finance has announced that two major payment card networks have agreed to lower costs charged to small and medium-sized businesses.

Both VISA and Mastercard have agreed to reduce domestic consumer interchange fees to an annual average effective rate of 1.40% for a period of five years, to narrow the range of interchange rates (lowest vs. highest fee) charged to businesses and to require verification by an independent third party.

The Finance announcement of the changes can be found on the Department’s website at https://www.fin.gc.ca/n18/18-069-eng.asp.

The Canada Revenue Agency (CRA) prepares and posts on its website a number of podcasts and webinars covering tax and tax-related issues of particular interest to small businesses.

There are currently a number of such podcasts and webinars available (free of charge) on the CRA website which cover topics including the following:

  • meeting payroll obligations, including deducting, remitting, and reporting;
  • claiming the federal small business deduction;
  • tax treatment of employee benefits, gifts, and awards, including motor vehicle benefits; and
  • upcoming changes to the Canada Pension Plan.

A complete listing of topics for the podcasts and webinars can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/podcasts.html and https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/businesses-video-gallery.html.

The Bank of Canada has issued a listing of the dates on which it will make announcements during the 2019 calendar year with respect to current interest rates.

There are eight such interest rate announcement dates during 2019, and a listing of those dates can be found in the Bank’s announcement, available on its website at https://www.bankofcanada.ca/2018/07/bank-canada-publishes-2019-schedule-fad-announcements-release-mpr-bos-slos/.

The Bank also confirmed that the three remaining scheduled interest rate announcements during 2018 will take place on September 5th, October 24th, and December 5th.

The Canada Mortgage and Housing Corporation (CMHC) has announced that, effective as of October 1, 2018, changes will be made to the process by which self-employed taxpayers are assessed for mortgage financing. The CMHC announcement indicates that, in order to give lenders more guidance and flexibility to help self-employed borrowers, it will:

  • provide examples of factors that can be used to support the lender’s decision to lend to self-employed borrowers who have been operating their business for less than 24 months, or in the same line of work for less than 24 months; and
  • provide a broader range of documentation options to increase flexibility for satisfying income and employment requirements when qualifying self-employed borrowers.

Details of those new factors and documentation options are outlined in the CMHC announcement, which can be found on the Agency’s website at https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2018/cmhc-introduces-changes-help-self-employed-canadians-own-their-own-home.

The Canada Revenue Agency (CRA) has updated and re-issued its Form RC366, which allows businesses to have amounts owed to them deposited directly to a bank account.

The updated form can be used to either start direct deposit or to notify the CRA of a change in existing direct deposit information. The form can be sent to the taxpayer’s tax centre, or can be attached to a refund or rebate application.

The requirements which must be met in order to set up a direct deposit arrangement for a business are listed on the updated form, which can be found on the CRA website at https://www.canada.ca/en/revene-agency/services/forms-publications/forms/rc366.html.

The Canada Revenue Agency (CRA) has updated and re-issued its publication RC4092(E) on Registered Education Savings Plans.

The updated publication incorporates changes, originally announced as part of the 2017 federal Budget, which extend existing anti-avoidance rules to apply to RESPs.

The latest version of RC4092(E) can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4092.html.

The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of June, as measured on a year-over-year basis, stood at 2.5%. That change is the largest such year-over-year increase since February of 2012.

Inflation for the month was broad-based, with prices increasing in seven of the eight major index components. The cost of transportation, which was up by 6.6%, was the largest contributor to inflation in June.

More details of the inflation picture for the month, by province and by index component, can be found on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180720/dq180720a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

The Canada Revenue Agency (CRA) has announced the prescribed interest rates for leasing rules which will apply during the months of July and August 2018.

Those prescribed rates will be 3.28% for July and 3.15% for August.

A chart showing all prescribed interest rates for leasing since 2009 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

The Canada Revenue Agency has updated and re-issued its publication outlining the tax treatment of funds held in a RRIF on the death of the RRIF annuitant.

The updated publication (RC4178(E)) also reviews the different tax reporting requirements which may apply to income earned on RRIF proceeds for specific time periods following the date of death.

The new publication can be found on the CRA website at https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4178/rc4178-17e.pdf.

While employment rose by 32,000 during the month of June, the unemployment rate was also up, by 0.2%, a result attributed by Statistics Canada an increase in the number of individuals seeking to enter the labour market.

During June, employment increased in Ontario, Saskatchewan, and Manitoba, with little change recorded in the other provinces. As well, employment rose for men aged 55 and older, while it held steady for other demographic groups.

More details of the employment picture for the month of June, by province, industry, and demographic sector, can be found in the July release of the Labour Force Survey, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180706/dq180706a-eng.htm?HPA=1.

In its regularly scheduled interest rate announcement made on July 11, the Bank of Canada indicated that it was increasing its benchmark interest rate by one-quarter of a percentage point. Accordingly, the Bank Rate is now set at 1.75%.

In the press release announcing its decision, which can be found on the Bank’s website at https://www.bankofcanada.ca/2018/07/fad-press-release-2018-07-11/, the Bank indicated that it views the Canadian economy as currently operating at close to capacity and that it expects average growth in the economy over the 2018-20 period to be close to 2%. The press release also indicated that while core inflation is currently near 2%, the Bank’s expectation is that inflation will increase to 2.5% before returning to 2% by the second half of 2019.

The Bank’s next regularly scheduled interest rate announcement will take place on September 5, 2018.

Each year, the Canada Revenue Agency reviews approximately 3 million returns which have already been filed and assessed. Generally, such reviews are carried out to confirm income amounts reported, and deductions and credit claims made. Most often, taxpayers are advised by telephone or letter that their return has been selected for review.

The Agency has issued a Tax Tip outlining the purpose and process involved in its return review program, and providing information on how a taxpayer whose return has been selected for review should respond.

That Tax Tip is available on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/tax-return-reviewed.html.

Old Age Security (“OAS”) benefits received by Canadians are indexed to changes in the overall Consumer Price Index, and are adjusted each quarter to reflect increases in that Index.

The federal government has announced that the indexing factor for the third quarter of 2018 is 1.2%. Consequently, the maximum OAS benefit for the quarter has been set at $596.67.

More information on benefits payable during the third quarter under the OAS and Guaranteed Income Supplement programs can be found on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.

The most recent release of Statistics Canada’s Consumer Price Index indicates the rate of inflation for the month of May stood at 2.2%. The same rate was recorded for the month of April, and both rates are as measured on a year-over-year basis.

While price increases were recorded in May for all 8 of the major index components, the greatest increase was recorded for energy prices. Overall, year-over-year energy prices for the month rose by 11.6%. The price of gasoline was the largest contributor to that increase, as it rose (on a year-over-year basis) by 22.9% in May.

More details of the inflation picture for the month, by index component and by province are included in the June release of the Consumer Price Index, which is available at https://www150.statcan.gc.ca/n1/daily-quotidien/180622/dq180622a-eng.htm?HPA=1.

The Canada Revenue Agency (CRA) has re-issued the payroll deductions online calculator to be used by employers in calculating employee source deductions as of July 1, 2018.

The updated version of that calculator now includes changes to source deductions for the province of Ontario, which take into account new tax brackets and rates which take effect on July 1.

The updated calculator can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/payroll-deductions-online-calculator.html.

The Canada Revenue Agency (CRA) has announced the prescribed interest rate for leasing rules which will be in effect during the month of July.

The prescribed rate for that month will be 3.28%.

A chart showing all prescribed interest rates for leasing since 2009 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the Agency for the third quarter of 2018, as well as the rates that will apply for the purpose of calculating employee and shareholder taxable benefits.

Debit rate Credit rate Shareholder Benefits

July 1 – September 30 6% 2% / 4% 2%

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 third quarter of 2018 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/interest-rates-third-calendar-quarter.html.

The Canada Revenue Agency has updated and re-issued its standard form for filing an objection to a Notice of Assessment or Reassessment. The 2018 T-400A E, Notice of Objection, can be found on the CRA website at https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t400a/t400a-18e.pdf.

Those taxpayers who are registered for the CRA’s online My Account service can also file a Notice of Objection online at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html.

The most recent release of Statistics Canada’s Labour Force Survey shows little change in unemployment during the month of May. For the fourth consecutive month, that rate stood at 5.8%.

There was some change in employment among different age groups, as employment increased for those over age 55 and decreased for those aged 25 to 54.

More details of the employment picture for the month, by province, demographic group, and economic sector are summarized in the June release of the Labour Force Survey, which can be found on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/180608/dq180608a-eng.htm?HPA=1.

The filing deadline for individual income tax returns for the 2017 year for self-employed individuals and their spouses is midnight Friday June 15, 2018.

Returns can be filed using the Canada Revenue Agency’s NETFILE service, or can be e-FILED by an authorized e-FILE service provider. Taxpayers can also file a paper return, and the mailing addresses for the Tax Centres to which such returns are sent can be found at https://www.canada.ca/en/revenue-agency/corporate/contact-information/where-mail-your-paper-t1-return.html.

More information on the 2017 filing requirement, deadline, and filing methods can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk25.html.

For Canadians who make quarterly instalment payments of personal income tax, the next due date for such payment is Friday June 15, 2018.

The Canada Revenue Agency has posted a notice on its website indicating that individuals who may be required to make instalment payments but have missed such payments in the past may receive a telephone call from the Agency to remind them of the upcoming payment due date.

That notice, together with more information on the instalment payment system and how payments may be made can be found on that website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments.html.

The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who have been affected by this spring’s floods of the availability of administrative tax relief.

Under the federal government’s Taxpayer Relief Program, individuals and corporations who are unable, for reasons outside their control, to meet their tax filing and payment obligations can be provided with relief from the penalty and interest charges which would otherwise be levied. Details of the administrative relief which may be provided is outlined at https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/taxpayer-relief-provisions.html.

Such requests can be made online, by using Form RC4288, Request for Taxpayer Relief, or taxpayers can call 1-800-959-8281 for individual enquiries or 1-800-959 5525 for business enquiries. The CRA considers all requests for relief on a case-by-case basis.

In its regularly scheduled interest rate announcement made on May 30, the Bank of Canada indicated that, in its view, no change was needed to current interest rates. Accordingly, the Bank Rate remains at 1.5%.

In its press release announcing the decision, which can be found at https://www.bankofcanada.ca/2018/05/fad-press-release-2018-05-30/, the Bank indicated that the rate of inflation has been close to the Bank’s 2% target. As well, recent economic data has generally supported the Bank’s economic growth projections, and economic activity during the first quarter of 2018 has been a little stronger than expected.

The Bank’s next regularly scheduled interest rate announcement will be made on July 11, 2018.

The Canada Revenue Agency (CRA) has issued updated payroll deduction formulas for use by employers for payroll periods beginning after July 1, 2018. The updated formulas reflect changes in provincial individual tax rates and credit amounts which take effect as of July 1.

The updated payroll deduction formulas (T4127) can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jul.html.

The most recent release of Statistics Canada’s Consumer Price Index shows that the overall rate of inflation for the month of April stood at 2.2%, as measured on a year-over-year basis. The rate for March was 2.3%.

Inflation during April was broad-based, as prices rose in seven of the eight major index components. The one exception was the cost of education and reading materials, which declined on a year-over-year basis. The greatest percentage increase was recorded in the price of gasoline, which rose by 14.2%, also as measured on a year-over-year basis.

More details of the inflation picture for the month, by province and by index component, can be found in the May release of the Consumer Price Index, which is available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180518/dq180518a-eng.htm?HPA=1.

The Canada Revenue Agency (CRA) will be making changes to its distribution method for GST/HST reporting and remittance forms for small businesses, with those changes generally directed toward reducing the amount of paper and number of mailings required each year.

Starting this spring, the CRA will no longer mail monthly or quarterly return and remittance forms to GST/HST registrants each month or each quarter. Rather, all such registrants will receive a package of forms once each year, which will include return and remittance forms for each reporting period during that year. As well, the annual package will no longer include a working copy of the return form(s). Finally, the new annual package will include, in addition to the reporting and remittance forms, a cover letter listing the registrant’s reporting periods and filing due dates for the entire year.

Registrants are being advised of the upcoming changes by means of a personal letter sent by regular mail from the CRA.

The most recent release of Statistics Canada’s Labour Force Survey indicates that there was no change during the month of April to either employment figures or the overall unemployment rate.

That unemployment rate for the month stood at 5.8%, as measured on a year-over-year basis. Among demographic groups, employment increased for women in the 25 to 54 age group, while it declined for youth aged 15 to 24.

More details of the employment picture for the month, by demographic group, province, and industry, can be found in the May release of the Labour Force Survey, which is available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180511/dq180511a-eng.htm?HPA=1.

The Canada Revenue Agency prepares and posts podcasts on a number of different tax topics, both individual and corporate. Those podcasts are available for download from the CRA website.

The current series available for download are as follows:

  • payroll podcast;
  • small business deduction series;
  • Canada Pension Plan enhancement series; and
  • taxable benefits series.

Each of the above series can be found on the CRA website at

https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/podcasts.html.

The Canada Revenue Agency has announced the prescribed interest rates for leasing rules which will be in effect during the months of May and June 2018.

Those prescribed rates will be 3.22% during the month of May and 3.45% for June.

A chart showing all prescribed interest rates for leasing since 2009 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/prescribed-interest-rates-leasing-rules.html.

Taxpayers who have filed their return for the 2017 tax year and are expecting to receive a refund can track the status of that refund payment through a toll-free telephone line. That line, the CRA’s Telerefund service, can be reached at 1-800-959-1956, and information on the service can be found at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/refunds.html#hwcnchckthsttsfrrfnd.

In order to use Telerefund, taxpayers must be able to provide their social insurance number, month and year of birth, and the total income figure which was entered on line 150 of their 2017 tax return.

Taxpayers should wait 8 weeks after filing their return before calling to check on the status of the return and refund.

The Canada Revenue Agency (CRA) has issued a warning to taxpayers of the need to be particularly vigilant with respect to fraudulent text, telephone, and e-mail communications, which increase during tax filing and assessment season.

The CRA warning, which is available at https://www.canada.ca/en/revenue-agency/news/2018/04/service-improvements-are-benefiting-millions-of-canadians-this-tax-season.html, reminds taxpayers that the Agency will never send an email with a link that asks the taxpayer to divulge personal or financial information, ask for personal information of any kind by email or text message, request payment by prepaid credit cards, send an email in English or French only, or leave personal information on an answering machine or voice mailbox.

Finally, the CRA notes that if a taxpayer receives a telephone call saying that he or she owes money to the Agency, the correct course of action is to call the CRA at 1-800-959-8281 to verify that information before making any kind of payment.

The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation stood at 2.3% during the month of March 2018, as measured on a year-over-year basis. The year-over-year rate posted for the month of February was 2.2%.

The March increase was broad-based in nature, with prices increasing in seven of the eight major index components. In addition, the increase was the largest year-over-year increase in the rate of inflation recorded since October 2014.

Details of the inflation picture for the month, by province and by index component, can be found in the April release of the Consumer Price Index, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180420/dq180420a-eng.htm?HPA=1.

The Canada Revenue Agency (CRA) has issued a reminder that all individual income tax balances owed for the 2017 tax year must be paid on or before Monday April 30, 2018.

April 30 is also the deadline by which most individual income tax returns for the 2017 year must be filed. Self-employed taxpayers and their spouses have until June 15, 2018 to file their returns, but the payment due date for all taxpayers for 2017 balances owed is April 30. Interest charges will begin to accrue on all unpaid amounts as of May 1, 2018.

Payment of tax amounts owed can be made in a number of ways. The CRA reminder of the upcoming deadline, which is available at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk28.html, provides information on each of those payment methods.

The most recent release of Statistics Canada’s Labour Force Survey shows that the rate of unemployment for the month of March 2018 stood at 5.8%. The same rate was recorded for February 2018.

Employment for the month was up among the 15 to 24-year-old age group and for women aged 25 to 54. Among the provinces, employment was up in Quebec and Saskatchewan, with little change recorded for the other provinces.

More details of the employment picture for the month, by province, demographic group, and industry can be found in the April release of the Labour Force Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180406/dq180406a-eng.htm?HPA=1.

In its regularly scheduled interest rate announcement made on April 18, the Bank of Canada indicated that no change was required to current interest rates. Accordingly, the Bank Rate will remain at 1.5%.

In its announcement, the Bank noted that inflation is running at close to 2%. In addition, domestic economic growth in the first quarter was weaker than the Bank had anticipated, but the expectation is that growth should rebound during the second quarter, resulting in 2% average growth in the first half of 2018.

The press release announcing the Bank’s decision can be found on its website at https://www.bankofcanada.ca/2018/04/fad-press-release-2018-04-18/. The next regularly scheduled interest rate announcement will take place on May 30, 2018.

It is not uncommon for taxpayers to discover an error or omission in an already-filed return, and the usual means by which such error can be corrected is the filing of a T1-Adjustment form. While a correction to a return can still be done using a T1-Adj., the Canada Revenue Agency (CRA) also provides an online alternative, in the form of its ReFILE service.

The ReFILE service is available to taxpayers who filed their returns online using NETFILE. Changes can be made in returns filed for the 2016 and 2017 tax years, using the same NETIFILE software that was used to file the return(s). EFILE service providers can also send adjustments to returns filed for any of the 2015, 2016, or 2017 tax years.

More information on the ReFILE service and how to use it can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/refile-online-t1-adjustments-efile-service-providers.html.

The Canada Revenue Agency (CRA) has issued a reminder to taxpayers who receive income from the “sharing economy” that such income is taxable and must be reported on the annual tax return.

Although there are a number of such income sources, the CRA reminder focuses on the tax treatment of income received from accommodation rentals and from ride-sharing services. It notes in particular that, as of July 1, 2017, ride-sharing services are considered to be taxi services, for which HST/GST must be charged.

The CRA’s Tax Tip on shared economy income can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk26.html.

The Bank of Canada’s regularly scheduled interest rate announcement dates for the remainder of calendar year 2018 are as follows:

  • April 18, 2018;
  • May 30, 2018;
  • July 11, 2018;
  • September 5, 2018;
  • October 24, 2018; and
  • December 5, 2018.

More information on the Bank’s policy interest rate announcements, including recent changes and historical rates, can be found on the Bank’s website at https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/.

Proceeds received from the sale of one’s principal residence are, in most circumstances, not taxable, as such sales are eligible for the principal residence exemption. However, as of the 2016 tax year, taxpayers who are claiming the principal residence exemption must report the sale of their home on Schedule 3 to their return for the year. Beginning with the 2017 tax year, an additional form (Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Trust)) must also be completed when claiming the exemption.

The Canada Revenue Agency has posted information on its website to assist taxpayers who must comply with the new reporting requirements, and that information can be found at www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/sale-your-principal-residence.html.

The most recent release of Statistics Canada’s Consumer Price Index shows a sharp increase in inflation for the month of February. That rate stood at 2.2%, while the rate for January 2018 was 1.7%. Both rates are measured on a year-over-year basis.

While price increases were recorded for all eight of the major index components during February, the largest contributor to inflation for the month was the cost of energy, which rose by 5.3%, as measured on a year-over-year basis.

More details of the inflation picture for the month, by province and index component can be found in the March release of the Consumer Price Index, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180323/dq180323a-eng.htm?HPA=1.

The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the second quarter of 2018, as well as the rates that will apply for the purpose of calculating employee and shareholder taxable benefits.

Debit rate Credit rate Shareholder Benefits

April 1 – June 30 6% 2% / 4% 2%

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 second quarter of 2018 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2018/interest-rates-for-the-second-calendar-quarter.html.

I am text block. Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.While taxpayers fall victim to tax scams year-round, such scams are more prevalent during and just following tax filing season. During that time, taxpayers expect to hear from the tax authorities, and so are perhaps less likely to question the validity of phone calls or e-mails which purport to be from the Canada Revenue Agency (CRA).

With that in mind, the CRA has issued a reminder to taxpayers of the need to be aware of the possibility of falling victim to a tax scam. The CRA’s warning, which can be found on its website at https://www.canada.ca/en/revenue-agency/corporate/security/protect-yourself-against-fraud.html, outlines the ways in which the CRA does and does not communicate with taxpayers and the warning signs which should alert taxpayers that a communication received is not in fact from the CRA.

In December 2017, the Canada Revenue Agency (CRA) announced that substantive changes would be made to the Agency’s Voluntary Disclosure Program (VDP). That program enables taxpayers who are in default of their tax filing or payment obligations to make full disclosure of such default while limiting their exposure to interest and penalty charges and criminal prosecution. The announced changes took effect as of March 1, 2018.

The CRA has updated its publication on the VDP to include the new rules now in place. That publication, IC00-1R6 — Voluntary Disclosures Program, which is currently available only in electronic format, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/campaigns/ic00-1r6-voluntary-disclosures-program.html#toc3.

The Canada Revenue Agency has issued its Guide RC4018, Electronic Filers Manual for 2017 Income Tax and Benefit Returns. That guide is for use by certified e-filers in filing individual income tax returns for clients for the 2017 tax year. Such e-filing can also be done for individual tax returns for the 2014, 2015, and 2016 tax years.

The guide, which is available in both PDF and HTML formats, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4018.html.

The most recent release of Statistics Canada’s Labour Force Survey shows a small decline in the overall unemployment rate for the month of February 2018. That rate declined from 5.9% in the month of January to 5.8% in February.

During February, employment increased for both men and women in the core working group of individuals aged 25 to 54, with little change recorded for other age groups. There was little change in employment in most provinces, with employment increasing only in New Brunswick and Nova Scotia, and decreasing in Saskatchewan.

More details of the employment picture for the month, by age, province, and demographic group, can be found in the March release of the Labour Force Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180309/dq180309a-eng.htm?HPA=1&indid=3587-2&indgeo=0.

The most recent release of Statistics Canada’s Consumer Price Index indicates that the rate of inflation for the month of January 2018 stood at 1.7%. The rate for the previous month was 1.9%.

Inflation for the month of January was broad-based, with prices increases recorded for all of the major Index components. The greatest increase was recorded for transportation costs, which rose by 3.2%, as measured on a year-over-year basis, following a 4.9% increase in December 2017.

More details of the inflation picture for the month, by province and index component, can be found in the February release of the Consumer Price Index, which is available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180223/dq180223a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

In its regularly scheduled interest rate announcement made on March 7, the Bank of Canada indicated that no change would be made to current interest rates. Accordingly, the bank rate remains at 1.5%.

In the press release announcing its decision, which can be found at https://www.bankofcanada.ca/2018/03/fad-press-release-2018-03-07/, the Bank indicated that inflation is running close to the Bank’s 2% target and that the inflation picture generally is consistent with an economy that is operating close to full capacity.

The Bank concluded that “while the economic outlook is expected to warrant higher interest rates over time, some continued monetary policy accommodation likely will be needed to keep the economy operating close to potential and inflation on target”.

The Bank’s next regularly scheduled interest rate announcement will take place on April 18, 2018.

Budget 2018: No personal tax credits have been repealed, and there are no new personal tax rate changes.

Budget 2018: Foreign-born Status Indians may now be eligible for child benefits, retroactive to 2005.

Budget 2018: Eligibility of specially trained service animals will be expanded for the purposes of the medical expense tax credit.

Budget 2018: Taxpayers will no longer need to apply when filing their return in order to receive the Canada Workers Benefit.

Budget 2018: The Working Income Tax Benefit amounts are enhanced as of 2019, and the credit is renamed the Canada Workers Benefit

Budget 2018: The non-resident surplus stripping rules are tightened to address the use of partnerships and trusts.

Budget 2018: Where a CRA compliance order or information requirement is contested, a new rule will “stop the clock” to prevent the tax year from being statute barred.

Budget 2018: A corporation will have two RDTOH accounts going forward: eligible and non-eligible RDTOH.

Budget 2018: A corporation with $100,000 of investment income will have its small business limit reduced to $250,000.

Budget 2018: A corporation’s small business limit will be reduced where the corporation earns investment income exceeding $50,000.

The Canada Revenue Agency (CRA) provides a 1-800 telephone service to provide tax information to Canadian taxpayers. Such information can be general in nature, or can involve the specific tax affairs of the particular taxpayer.

The CRA has announced that that telephone service, which can be reached at 1-800-959 8281, will have extended hours during the 2018 tax filing season. Specifically, from February 26 to April 30, 2018, telephone agents will be available to answer questions Monday to Friday from 9 a.m. to 9 p.m. and on Saturdays from 9 a.m. to 5 p.m. The service is closed on Sundays, on all statutory holidays and on Easter weekend.

More information on the CRA’s phone services, including its automated services, can be found at https://www.canada.ca/en/revenue-agency/corporate/contact-information/telephone-numbers.html.

The Canada Revenue Agency’s NETFILE service for filing of individual income tax returns will be available starting Monday February 26, 2018.

Taxpayers do not need to obtain an access code to file their 2017 returns using NETFILE, but must use an authorized software program to prepare those returns. A current listing of the software programs which have been approved by the CRA for the filing of 2017 returns can be found at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/certified-software-netfile-program.html.

General information on the NETFILE service can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview.html.

The most recent release of Statistics Canada’s Labor Force Survey shows a slight increase in the overall unemployment rate for the month of January. That rate rose by 0.1%, from 5.8% to 5.9%.

That change was attributed in part to a sharp drop in, particularly, part-time employment. For the month, such employment declined by 137,000 jobs, and overall employment fell by 88,000. Among demographic groups, employment declined for those aged 15 to 24, for women aged 25 to 54, and for workers aged 55 and older.

More details of the employment picture for the month, by sector, demographic group, and province, can be found in the February release of the Labour Market Survey, available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180209/dq180209a-eng.htm?HPA=1.

The Federal Minister of Finance has announced that the 2018-19 federal Budget will be brought down on Tuesday, February 27, 2018.

The Budget will be released at around 4 p.m. and the full Budget Papers will then be posted on the Finance Canada website at https://www.fin.gc.ca/access/budinfo-eng.asp.

The Minister’s announcement of the upcoming Budget date can be found on that website at https://www.fin.gc.ca/n18/18-006-eng.asp.

This year, the Canada Revenue Agency (CRA) will be providing taxpayers with hard copies of the 2017 Income Tax and Benefit package through a variety of means, and at various dates.

Individuals who paper-filed a return last year will receive a 2017 Income Tax and Benefit package in the mail, and those mailings began in January.

It’s also possible to order copies online by going to canada.ca/get-cra-forms, but there is an order limit of 9 packages. Forms and guides can also be accessed online and printed, without limitation, directly from canada.ca/taxes-2017-general-package.

In addition, a “limited” quantity of tax packages will be available in both official languages at Canada Post, Service Canada, and most Caisse populaire Desjardins outlets starting February 26.

Finally, it’s possible to order tax forms to be sent by mail, by calling the CRA’s Individual Income Tax Enquiries line at 1-800-959-8281.

More information on how to obtain a 2017 tax package can be found in a Tax Tip released by the Agency and available at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-filing-season-media-kit/tfsmk15.html.

The Canada Revenue Agency (CRA) has announced the date on which NETFILE service for the filing of individual income tax returns for the 2017 tax year will be available.

NETFILE service will be available for those returns as of Monday February 26, 2018, and will then be accessible 21 hours a day, 7 days a week, with those hours varying among time zones.

Specifics of the service hours for NETFILE in different time zones can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview/hours-service.html.

While the majority of Canadians now file their individual income tax returns electronically, there is still a significant minority of tax filers who file using a printed return.

The Canada Revenue Agency (CRA) has announced that this year, tax filers who have previously filed using printed return forms will receive a 2017 tax package (which includes the tax return form and guide) by mail. Such tax packages will also be available, as in previous years, at Canada Post, Service Canada, and Caisse populaire Desjardins outlets.

The announcement of change in the distribution of tax packages can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/2018/01/minister_lebouthillierannouncesimprovementstotaxfilingservicesfo0.html.

The Canada Revenue Agency (CRA) has posted a notice on its website that an “update” has been made to individual 2017 tax forms. Those forms are to be used by individual Canadians to file their returns for the 2017 tax year.

The CRA’s notice does not specify the nature or extent of the updates or the specific form or forms to which changes have been made, but does indicate that anyone who downloaded forms prior to January 19, 2018 should now download or print the updated forms.

The CRA’s announcement can be found on the home page of its website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html.

For a number of years, taxpayers whose tax situation was relatively straightforward were able to file their return by telephone. That service, which was called TELEFILE, was withdrawn a few years ago.

The Minister of National Revenue has announced that the Canada Revenue Agency (CRA) will be launching a new automated telephone filing service, to be called File My Return. During that launch, which will begin in mid-February 2018, just under a million eligible individuals will receive an invitation to file their 2017 tax returns using the new service. Such invitations will go to taxpayers who have low income or a fixed income that is unchanged from year to year.

More information on the new File My Return service can be found on the Tax Tips section of the CRA website, at https://www.canada.ca/en/revenue-agency/news/2018/01/minister_lebouthillierannouncesimprovementstotaxfilingservicesfo0.html.

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 2018, 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 2018 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2017/interest-rates-first-calendar-quarter-2018.html.

As widely expected, the Bank of Canada indicated, in its regularly scheduled interest rate announcement made on January 17, that an increase in the bank rate was required.

The Bank’s announcement, which can be found on its website at www.bankofcanada.ca/2018/01/fad-press-release-2018-01-17/, indicates that the bank rate has now been set at 1.5%, an increase of 0.25%.

In that press release, the Bank noted that recent economic data was strong, showing both that rate of inflation was close to the Bank’s target and that the Canadian economy was operating at close to capacity. The Bank indicated as well that, while “the economic outlook is expected to warrant higher interest rates over time”, the Bank would remain “cautious in considering future policy adjustments”.

The next scheduled interest rate announcement date is March 7, 2018.

Finance Canada has announced that the consultation process leading to the release of the 2018-19 federal Budget will conclude on Friday January 26, 2018.

Canadians can provide input by submitting their ideas as part of pre-Budget consultations until January 26 at 11:59 p.m., through the Budget consultation website at www.budget.gc.ca/pbc18.

The press release announcing the end of the budget consultation process can be found on the Finance Canada website at www.fin.gc.ca/n18/18-002-eng.asp.

The Canada Revenue Agency has released the T1 Individual Income Tax Return and Benefit form to be used by individual Canadian taxpayers in filing their return for the 2017 tax year. The T1 form is available on the federal government website at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package.html, while the Guide can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/5000-g.html.

Taxpayers who wish to receive hard copies of the T1 forms and the return filing guide can order both the 2017 Forms Book and the 2017 T1 General Guide from the TD1 form webpage.

The most recent release of Statistics Canada’s Labour Force Survey indicates that the unemployment rate for the month of December 2017 stood at 5.7%. The last period for which that rate was recorded was January 1976.

Increases in employment for December were largely in part-time work, which rose by 55,000 positions. In addition, employment increased across all demographic groups except those aged 15 to 24, for whom there was little overall change.

More details of the employment picture for the month by province, demographic group, and economic sector, can be found in the January release of the Labour Force Survey, which is available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/180105/dq180105a-eng.htm?HPA=1.

As previously announced, the federal small business tax rate is reduced to 10.0%, effective as of January 1, 2018. There is no change in the federal small business limit, which remains at $500,000.

The rate reduction is the first of two such planned changes. The second will take effect on January 1, 2019, when the federal small business tax rate will be further reduced to 9.0%.

Details of the rate changes are outlined in the Finance Canada press release, which is available at http://www.fin.gc.ca/n17/17-132-eng.asp

Finance Canada has announced the limits and thresholds which will apply for purposes of determining automobile benefits and deductions during 2018.

Most such deduction limits and thresholds are unchanged. However, the limit on the deduction of tax-exempt allowances that are paid by employers to employees who use their personal vehicle for business purposes for 2018 will be increased by 1 cent to 55 cents per kilometre for the first 5,000 kilometres driven, and to 49 cents per kilometre for each additional kilometer. As well, the general prescribed rate that is used to determine the taxable benefit of employees relating to the personal portion of automobile operating expenses paid by their employers will also accordingly be increased by 1 cent to 26 cents per kilometre. For taxpayers who are employed principally in selling or leasing automobiles, the prescribed rate used to determine the employee’s taxable benefit will be increased by 1 cent to 23 cents per kilometre.

More details of the changes for 2018 can be found in the Finance Canada announcement, which is available at http://www.fin.gc.ca/n17/17-131-eng.asp

Planned changes to the federal income tax rules governing the taxation of small incorporated Canadian businesses are to take effect for 2018. One of those changes will include greater restrictions on the ability to split income among adult family members.

The Canada Revenue Agency has issued administrative guidance on how the new rules will be implemented, and that document can be found on the federal government website at https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/income-sprinkling/guidance-split-income-rules-adults.html?utm_source=CRAwebsite&utm_medium=NTEmail&utm_campaign=tracker-highlights.

The Canada Revenue Agency (CRA) provides an administrative program under which taxpayers who have failed to file returns or pay taxes on a timely basis can bring their tax affairs into compliance, usually without payment of penalties or risk of prosecution.

The CRA has announced that significant changes will be made to that Voluntary Disclosure Program. Those changes include a new requirement that taxpayers pay any estimated taxes owed in order to qualify for the VDP, and an end to the policy under which taxpayers or their representatives could make an initial “no-names” disclosure.

Details of the planned changes are outlined in a CRA press release and backgrounder, both which can be found at https://www.canada.ca/en/revenue-agency/news/2017/12/minister_lebouthillierannouncestighteningofthevoluntarydisclosur.html.

Taxpayers who are turning age 71 during the year and who have available contribution room are entitled to make a final RRSP contribution for that year.

Such contributions must be made by the end of the calendar year, meaning that taxpayers who turn 71 during 2017 must make any contribution on or before December 31, 2017.

More information on making a final RRSP contribution is available on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/rrsp-options-when-you-turn-71.html.

Taxpayers who have not yet filed their return for the 2016 tax year will have until January 19, 2018 to file that return using NETFILE. Until that date, returns for the 2013, 2014, 2015, and 2016 tax years can be NETFILED.

After January 19th, the NETFILE service will be suspended until mid-February, when it will become available for the filing of individual income tax returns for the 2017 tax year.

More information on the NETFILE service can be found on the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview.html.

In its regularly scheduled interest rate announcement made on December 6, the Bank of Canada indicated that, in its view, no change is required to current rates. Accordingly, the bank rate remains at 1.25%.

In the press release announcing its decision, which can be found at www.bankofcanada.ca/2017/12/fad-press-release-2017-12-06/, the Bank stated that recent Canadian economic data is in line with the Bank’s outlook. The rate of inflation has, however, been slightly higher than anticipated and measures of core inflation have edged up in recent months.

The Bank noted that, while no change to interest rates is currently needed, “higher interest rates will likely be required over time”. The Bank’s next scheduled interest rate announcement date is January 17, 2018.

The most recent release of Statistic’s Canada’s Labour Force Survey shows a slight decline in the overall unemployment for the month of November. That rate declined by 0.4%, to 5.9%. The November rate is the lowest since February 2008.

The change in the employment picture varied by demographic group and among the provinces. Employment increased for women 55 years of age and older, for individuals aged 15 to 24, and for men aged 25 to 54. Provincially, employment rose in Ontario, British Columbia, Quebec, and Prince Edward Island.

More details of the employment picture for the month can be found in the December release of the Labour Force Survey, available on the Stats Can website at www.statcan.gc.ca/daily-quotidien/171201/dq171201a-eng.htm?HPA=1.

The Canada Revenue Agency has issued the 2018 version of its publication T4127(E), Payroll Deductions Formulas. The guide is intended for use by payroll software providers and by employers which manage their own in-house payroll functions.

The updated publication, which is available at https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jan.html, outlines the provincial and territorial tax changes which will affect payroll deductions for 2018, and sets out the formulas to be used to calculate federal, provincial, and territorial tax amounts to be paid by employees.

The Canada Revenue Agency has issued the federal TD1 Form and Worksheet which will be used by taxpayers and their employers to determine required federal income tax source deductions for the upcoming 2018 tax year.

The TD1 Form, which is available at https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later/td1.html, lists the most common federal tax credit amounts claimable by individual Canadians. The Worksheet, which can be found at https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later/td1-ws.html, is used to determine eligibility for federal credit amounts, including the age amount and the caregiver amounts, which are subject to income limitations.

The federal TD1 Form and Worksheet will not be available in hard copy until January 2018.

The most recent release of Statistics Canada’s Consumer Price Index (CPI) shows an inflation rate of 1.4% for the month of October, as measured on a year-over-year basis. The equivalent rate for the month of September was 1.6%.

Inflation during October was broad-based, with prices up in seven of the eight major CPI components. Price increases in the month of October (as measured on a year-over-year basis) were, however, down from the previous month in five of the provinces.

More details of the inflation picture for the month, by index component and province, can be found in the November release of the Consumer Price Index, which is available on the StatsCan website at www.statcan.gc.ca/daily-quotidien/171117/dq171117a-eng.htm?HPA=1&indid=3665-1&indgeo=0.

Finance Canada has begun the consultation process leading to the release of the 2018-19 federal Budget.

As part of that budget consultation process, the Minister of Finance is holding in-person public roundtables in a number of locations. There is also a budget survey tool available to Canadians online.

That budget survey tool can be found on the Finance website at https://www.budget.gc.ca/2018/prebudget-prebudgetaire/index-en.html, and more information on the budget consultation process in general is available at www.fin.gc.ca/n17/17-113-eng.asp.

Effective as of January 8, 2018, administrators and representatives of qualifying Canadian trusts will be able to file trust income tax and information returns online, through the Canada Revenue Agency (CRA) website.

In order to take advantage of the online filing option, updated tax software and forms which meet the required conditions for processing must be used. A list of the relevant specifications and restrictions can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/trust-administrators/t3-return/how-file-t3-return.html.

Information on the new filing option and the types of trusts which can use that option is available at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2017/online-filing-trust-income-tax-information-returns.html.

The federal government has announced the premium rates and maximum insurable earnings amount which will be in place for the 2018 calendar year.

The premium rate for the year for employees has been set at 1.66%. Employers, who pay 1.4 times the employee rate, will pay premiums at a rate of 2.32%. Maximum insurable earnings for 2018 will be $51,700, meaning that the maximum employee contribution for that year will be $858.22. Employers will pay a maximum of $1,201.51.

More information on the EI premium structure for 2018, including premiums payable by self-employed individuals, can be found on the federal government website at https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/premium/rates2018.html.

The Canada Revenue Agency (CRA) has announced the contribution rates and amounts for both employers and employees which will apply for 2018.

Maximum pensionable earnings for the year will be $55,900 (with a basic exemption of $3,500), and employer and employer contribution rates are unchanged, at 4.95% each.

The maximum employer and employee contribution amounts for the year will therefore be $2,593.80 each. The maximum contribution by self-employed individuals, who pay both the employer and employee portions, will be $5,187.60.

The announcement of the contribution rates and amounts for 2018 can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2017/maximum-pensionable-earnings-2018.html.

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