In part 1 of this article, Millards Chartered Professional Accountants presented the tax related changes which have already been introduced into legislation by the Federal Liberal Party. The party have also proposed a significant number of other upcoming tax related changes in their platform.

Among the proposed changes would be the amalgamation of The Universal Child Care Tax Benefit, National Child Supplement and Child Tax Benefit into a new benefit called the Canada Child Tax Benefit.

Steve McGaghran, CPA, CA, CGA, LPA

Steve McGaghran
CPA, CA, CGA, LPA and Partner
Millards Chartered Professional Accountants

Steve McGaghran, CPA, CA, CGA, LPA and Partner at Millards Chartered Professional Accountants says that the new benefit will be beneficial for many families.

“Per the Liberal campaign materials, the break-even point compared to the previous government is family income of $150,000. Families under $150,000 should fare better under the Liberal platform and vice-versa. The Benefit will be fully eroded at approximately $200,000, however, this will vary depending on the number and ages of children.”

The new Canada Child Benefit will provide a base amount of $6,400 per child under 6 and $5,400 per child aged 6 to 17. The payments will be reduced based on a percentage of family income level. No reduction will occur for income below $30,000 and amounts will be non-taxable.

The Federal Liberal Government also announced a number of other proposed programs that will begin July 1, 2016.

Those programs include the elimination of the Family Tax Cut, increasing Guaranteed Income Supplement for single, low-income seniors and lowering EI premiums.

“EI will be reduced slightly from $1.88 to $1.65 per $100 by 2017. At the same time the government intends to add more availability and flexibility to the EI program.”

While The Tuition Credit will remain available to Canadians, the Education and Textbook Credit will be cancelled in favour of increasing student grants. There remains some confusion over the Teacher and Early Childhood Educator School Supply Tax Credit.

“The Federal Liberal party platform noted this proposed refundable credit is planned to be effective for 2015. That said, there has been no announcement by the Government as of January 6, 2016 to formalize this credit for the 2015 year.”

The credit is to be valued at a maximum of $150. It is uncertain whether receipts would be required or not.

The changes will increase the tax deduction available to Northern Residents by approximately 1/3rd and indexed annually for inflation. The amount available for those living in the Intermediate Zone will increase by the same proportion.

The Home Buyers’ Program will continue but with more flexibility for those that have experienced sudden and significant life changes. The examples cited by the government include job relocation, death of a spouse or marital breakdown.

Do you have questions about what the new tax rules mean for you or your business? Contact a Millards Chartered Professional Accountants representative today and find out more.

Steve McGaghran, CPA, CA, CGA, LPA, is a partner at Millards Chartered Professional Accountants. His practice areas include both personal and corporate tax planning as well as accounting and auditing. He has extensive experience with small and medium sized business and auditing of both private and not-for-profit organizations.