Canadians will ring in 2017 with some tax changes - Nationally & Provincially

Canadians will ring in 2017 with some tax changes

The changes will affect the bottom line of federal and provincial governments for instance Ontarians will get an eight-per-cent rebate on rising hydro bills.

https://www.thestar.com/business/2016/12/28/canadians-will-ring-in-2017-with-some-tax-changes.html



By Ross MarowitsThe Canadian Press
Wed., Dec. 28, 2016





MONTREAL—Canadians will ring in the new year with a number of tax changes that will affect the bottom line of federal and provincial governments. Here’s a look at some of them:


Nationally



The federal government is ending four child tax credits this year: arts, fitness, education and textbooks in 2017. Parents of children under the age of 16 can pre-pay 2017 arts and fitness programs to claim them on 2016 tax returns as long as total spending for 2016 does not exceed $250 and $500 limits, respectively.


It is also cancelling income splitting for families, a tax reduction measure that allowed someone to transfer up to $50,000 of income to a spouse with lower income if they had a child under 18 years of age. The tax credit for income splitting was capped at $2,000.


Offsetting those changes are the Canada Child Benefit and changes to Employment Insurance benefits introduced in 2016.



“High income earners in most provinces will pay more but for the majority of Canadians, these two changes will mean more money in their pockets,” Canadian Taxpayers Federation federal director Aaron Wudrick said Wednesday in a news release.


Several other changes at the federal level will affect life insurance, business owners selling their companies and some mutual funds.
Under changes enacted by the previous government, the tax treatment of universal life insurance policies will be less favourable starting Jan. 1. New policy holders will see a decrease in their ability to build up investment gains above death benefit premiums on a tax-free basis.

The new formula for calculating insurance will make policies a little more expensive or reduce death benefits, says Jason Safar, a PricewaterhouseCoopers partner specializing in personal taxes.


Business owners, large and small, will gain less from the sale of their operations as assets such as goodwill and trademarks will become fully taxable as investment income. Currently, half of the proceeds can be distributed tax-free as a dividend.


Investors will also no longer be able to rebalance their non-registered mutual fund investments in corporations structured as “switch funds” on a tax-deferred basis. As of the new year, capital gains from such moves will be taxed in the same way as equities.


Provincially



Cash-strapped Newfoundland and Labrador is the only province hiking its income tax rates next year, the second time it’s doing so in six months. Rates in all tax brackets will rise, with those earning between about $35,000 and $70,300 paying 14.5 per cent, up one percentage point from July and two points from 2015. The province is also raising entry fees into provincial parks and campsites.


Quebec is bidding adieu two years early to controversial health premiums introduced in mid 2010.


Ontarians will get an eight-per-cent rebate on rising hydro bills and see the maximum total cost of borrowing for a payday loan lowered to $18 per $100 borrowed from $21 per $100.


The province is also doubling the first-time homebuyers’ maximum land transfer tax refund to $4,000 and is introducing its carbon cap and trade system.


British Columbia is scrapping medical services plan premiums for children and young adults attending school.


Alberta is reducing its small business corporate income tax rate from three per cent to two per cent. It is also introducing a carbon tax on the purchase of fossil fuels, offset with a rebate for low- and middle-income earners.


The federal government and provinces have already mostly implemented tax changes announced in their 2016 budgets.
“There are a few changes that are unique for 2017 but the average Canadian is not going to see much difference between 2016 and 2017,” said Jamie Golombek, managing director of tax and estate planning for CIBC Wealth Advisory Services.


Jason Safar, of PricewaterhouseCoopers, said more changes are possible in 2017. He said the federal government could eliminate more tax credits and could feel pressure from possible personal and corporate tax cuts in the United States.


“I do find it interesting to consider that given (Donald) Trump’s election in the U.S. and the promise of lower tax rates in the U.S., what is going to happen with Canadian tax rates?” Safar said.


Finally, various tax amounts — including maximum RRSP contributions, tax brackets and maximum amounts of various credits — will increase in 2017 to reflect inflation but the tax-free savings account limit remains at $5,500.

These changes are for 2017.

So it won't really affect us, when we file this 2016 years taxes in the next few months. Some changes will be there throughout the year in 2017.

But in 2018, when you file the 2017 taxes, your IT refund might change.

Ending four child tax credits-that will hurt some families. Higher education-the loss of the education and textbook credits are another set of sacrifices for the presumably more accessible education grants/student loans.

^ The new Canada Child Benefit is supposed to more than offset those other changes.

Quote:

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Originally Posted by Ciel

Ending four child tax credits-that will hurt some families. Higher education-the loss of the education and textbook credits are another set of sacrifices for the presumably more accessible education grants/student loans.

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May suffer a little from the loss of Education and Textbook Credits, but since OSAP is changing, that may help to offset the loss of credits, should still get one more batch of credits for this coming tax season to help offset my income as well as my parents income. But I should be able to get full access to the free tuition through OSAP now with my mothers income being what it is. Only a year and a half into school and at over $10,000 in debt, so hopefully a lot less loan and a lot more grants to cover school for me!!

ON hydro is decreasing - yes
But natural gas heating and gas at the gas station will have the carbon tax added.
So one cancels the other :(

All my T4 slips and T5 slips are online. I usually get them in January online.

Scotia bank, they insist on mailing the T5 slip. They have no option for online T5 slip. I am saving them postage and paper charges, but they are living in stone age.

Everything is online. People who want them in mail should have them, but people who want to opt out should have the same chance.

Quote:

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Originally Posted by Shwa Girl

ON hydro is decreasing - yes
But natural gas heating and gas at the gas station will have the carbon tax added.
So one cancels the other :(

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Hydro will provide 8% rebate. But it too will bury the $5-6 monthly cap and trade charge in that growing Delivery Charge (just as gas utilities will do) on the bill.

Quote:

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Originally Posted by Ciel

Hydro will provide 8% rebate. But it too will bury the $5-6 monthly cap and trade charge in that growing Delivery Charge (just as gas utilities will do) on the bill.

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Plus the gas stations.Premier No Wynne will have gas prices increasing at the pump.

Plus the promise of toll highways on the 400 series of highways and maybe for major Toronto roads just for fun.

I hope everyone remembers this in the June 2018 election. Premier No Wynne will probably be announcing goodies to entice people to vote Liberal in June 2018 (tentative date)

Quote:

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Originally Posted by Ciel

Hydro will provide 8% rebate. But it too will bury the $5-6 monthly cap and trade charge in that growing Delivery Charge (just as gas utilities will do) on the bill.

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Note that the original article was from the Star <shudder>. I swore to never read that rag again many years ago due to its blatant political bias.

I have no problem with political leanings that differ from my own. As a matter of course, I try to seek out different opinions to avoid living in an echo chamber, like the US media prior to their 2016 election where everyone was "surprised" by an outcome that the numbers were leaning heavily toward for a while. The Star, however, is quite blind to its own bias to make me question every character in its content.

The article discusses the removal of an 8% tax that the same party predecessor of the current government added on. To call that a "reduction", or a "rebate" would make Orwell himself blush. And yes, the total absence of the "cap and trade tax" from the article is reprehensible.

I am sick to tears of politicians of every stripe who think that the electorate are illiterate sheep whose votes can be bought with a few dollars scattered here and there that was taken from the pockets of the taxpayers to begin with.

Unfortunately, the conventional wisdom states that no politician can be elected who states "This is how much trouble we have gotten ourselves into, and this is the hard work that I am proposing that we do to get out". No, instead it is "The previous government spent waaaaay too much money on bad stuff - we're going to spend even more money on good stuff!". Except, like the long gun registry, eHealth, green power, "investments" in infrastructure and on and on, the "good stuff" is always just different bad stuff, and way more money than should have been spent.

Politicians are supposed to be wise stewards of taxpayer money. Instead, they spend like drunken sailors, throwing money at every bad idea that may get them a few more votes.

I may be coming across as a curmudgeon. I'm definitely a "glass half full" kinda guy, but government spending is really getting out of hand.

It's about time that governments realize that they don't have an income problem, they have a spending problem. Like all of us have realized here, the correct reaction to this realization is to carefully measure the "bang for the buck" of each expenditure, and try to make the existing money go the furthest with an eye to the future. We don't have the ability to, backed by the threat of force, to go to our boss and demand yet another undeserved raise that they cannot legally deny.

Kathlyne Wynne is destroying ON. She is only concerned about her re election now, so she is giving these foolish rebates and taking it back somewhere else.

All smokes & mirrors from her. Your NET benefit will be ZERO ! Your bills are going to be the same or MORE in 2017 compared to 2016.

Trust me 2017 will be more expensive than 2016, everything will be more water bill, gas bill, hydro bill, property taxes, city fees , gas at the pumps, groceries,rent yada yada. The only thing that won't be more is your Salary !

The ON Hydro rebate which is the 8 % PST tax exemption is expected to save the average home owner about $11 monthly, or $130 a year.This will cost the gov big time in tax revenues, so they will make big cuts somewhere else. But for consumers it will be next to nothing on their bills.

Instead of reducing the salaries of overpaid executives in Hydro, getting rid of ridiculous pricey contracts given to private companies to generate so called green energy and to build hydro plants and transmission lines, they decide to get rid of the 8 % PST at the cost of tax revenues.

Keep the sunshine list in check, the bribes, the kickbacks, ridiculous contracts, wastage at Hydro and the price will automatically come down. Not these gimmicks and rebates, which don't solve the root cause of the problem at Hydro.