Just last month, the Government of Canada released the 2018 Federal Budget which showed a strong economic growth. Canada saw GDP growth of 3.2% along with a low unemployment rate of 5.9% and improvements in consumer confidence, average weekly earnings and household consumption.
While there was much speculation about what this Budget would bring, from a personal tax perspective, many were not introduced/reintroduced in the 2018 Federal Budget.
There were, however, some proposed changes that should be noted.
To be renamed the Canada Workers Benefit (CWB) effective 2019, the Working Income Tax Benefit is a non-refundable tax credit which provides relief to eligible low-income workers.
In the past, taxpayers were required to check a box to be enrolled in the Working Income Tax Benefit. Come 2019, taxpayers will no longer have to do so and will be automatically enrolled based on eligibility.
The amount received for the CWB will be equal to 26% of earned income over $3,000 providing a maximum benefit of $2,335 for families (including both couples and single parents) and $1,355 for individual taxpayers without dependents. For individuals with net income over $12,820 and families with a net income of $17,025, the benefit will be reduced to 12%.
If you are eligible for the Disability Tax Credit, you may also be eligible for the increased CWB disability supplement of $700, as of 2019.
From 2018 onwards, the Budgets looks to expand the eligibility of the medical expense tax credit to expenses incurred with respect to a service animal which has been specifically trained to perform tasks for taxpayers with a severe mental impairment, such as post-traumatic stress disorder (PTSD). Currently, only those coping with blindness, epilepsy, diabetes, deafness, autism and impairments effecting the use of arms and/or legs are eligible.
Eligible expenses will include food, veterinary care, and training the user of the service dog.
It is important to note that this change does not apply to service animals that provide comfort and support but are not specifically trained.
While provisions allowing certain family members to be a Registered Disability Savings Plan (RDSP) holder, where a legal representative is not in place, were to expire come 2018, they have been extended to 2023. In addition, so long as you are an RDSP plan holder prior to 2023 you will remain as such, inevitably.
While the Child Benefit has been available to Canadian-born Status Indians for a number of years, new changes to the benefit will now allow Status Indians, born outside of Canada who reside in Canada but are not Canadian citizens or permeant residents, to be eligible for the benefit.
The benefit will also be retroactive for Foreign-born Status Indians.
In the past, the federal government has not shared Child Benefit information with provincial and territorial governments. As of July 1, 2018 the Federal Government proposes to share information with provinces and territories to assist taxpayers in receiving social assistance.
Under the 2018 Budget, it is proposed that the Mineral Exploration Credit will be available for Flow-Through Share Investors for expenses that are abdicated on or before March 1, 2019.
The Budget puts forth a new Employment Insurance Program benefit known as the Parental Sharing Benefit. This benefit will offer parents, who agree to share parental leave, an additional five-weeks to be used as a top-up. Adoptive parents, same-sex parents and different-sex parent will all be eligible. This will allow more flexibility when one parent is looking to return to work sooner.
Currently, all registered apprentices, who have completed training and obtained their journeyperson certification receive a one-time taxable grant of $2,000, known as the Apprenticeship Completion Grant. It is proposed that a new benefit – The Apprenticeship Incentive Grant for Women – be introduced, to promote women in skilled trades.
This benefit will provide women, in male-dominated Red Seal trades, with a $3,000 grant for each of their first two years of training.
It is predicted that 90% of Red Seal trades will be eligible for this new benefit.
For more information on the proposed budget and how it could affect you, both as an individual or business owner, contact our advisory team today!