Koroll & Company Blog

The budgetary cycle of the federal government follows a regular schedule. The Budget for the upcoming fiscal year (which runs from April to March) is brought down by the Minister of Finance in late winter or early spring.

About six months later, or half way through the fiscal year, the revenue, expenditure, and deficit/surplus numbers, announced and projected in the budget (for both the current and future fiscal years), are updated by the Minister in the Fall Fiscal and Economic Update. On occasion, the federal government will use the Fiscal and Economic Update to announce new taxation and expenditure measures.

Canada Pension Plan (CPP) retirement benefits are available to virtually any Canadian who has participated in the work force and made contributions to the CPP and for most retirees, that monthly CPP benefit represents a substantial percentage of their income. Consequently, knowing what to expect in the way of CPP retirement benefits is crucial to an individual’s retirement income planning.

Unfortunately, it’s also a safe bet that most Canadians don’t know how much they can expect to receive each month from the CPP – or even how to find out that amount.

It has become something of a dreary chorus over the past decade, as financial advisers, central bankers and even Ministers of Finance remind, warn, and even scold, Canadians about the risks associated with their ever-increasing levels of household debt.

That chorus was renewed this month, as statistics issued for the second quarter (April to June) of 2016 showed that the amount of household debt held by Canadians, expressed as a percentage of disposable income, had set yet another record. At the end of that quarter, as reported by Statistics Canada, Canadians households held $1.68 in credit market debt for every dollar of disposable income.

At the Canada Revenue Agency (CRA), taxes are a year-round business. During the spring and early summer, the CRA is busy processing the millions of individual tax returns filed by Canadians for the previous tax year. The volume of returns filed and the Agency’s self-imposed processing turnaround goals mean that the CRA cannot possibly do an in-depth review of each return filed.

Once the season of processing and assessing tax returns is, for the most part, complete, the CRA moves to the next phase of its activities – specifically, the start of its annual post-assessment tax return review process.

The start of fall marks a lot of things, among them a number of runs, walks, and other similar events held to raise money for a broad range of Canadian charities. And, in a few months, as the holiday season approaches, charities will launch their year-end marketing campaigns.

Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit, at both the federal and provincial/territorial levels, for qualifying  donations made.

Each spring, Canadians are required to fulfill two tax obligations. The first is the requirement to file an individual income tax return providing details of income earned, deductions and credits claimed, and the amount of income tax payable for the previous calendar year. The second such obligation is to pay any amount of income tax owed for that year which is still outstanding. And although the Canadian tax system is for the most part a voluntary self-reporting and self-assessing one, most Canadians do comply with those two obligations in a timely way.

When it comes to questions around personal finance, two issues tend to dominate current discussions. The first is whether and to what extent Canadians are financially prepared for retirement, and the second is the seemingly inexorable increase in the value of residential real estate. For many retired Canadians, those two issues are very much interlinked. 

Most Canadians are eligible to receive Canada Pension Plan(CPP) and Old Age Security (OAS) payments in retirement. While those two programs provide the “backbone” of retirement income in Canada, they are almost never enough, on their own, to provide for a comfortable standard of living in retirement.

Having access to mobile communications is useful and practical for any number of reasons. In fact, Canadians who don’t have a cell or smart phone are likely now the exception, rather than the rule. But, did you know that cellphone rates payable by Canadians are among the highest in the world? As such, having an employer provide a cellphone (and pay the associated costs) is consequently a valued employment benefit.

That being said, Canadians who enjoy such an employment benefit should be aware that, while they may not have to pay a monthly cell phone bill, there still can be a cost in the form of a taxable benefit, as with an employer-provided vehicle, which must be reported on the annual return.