Tax facts and figures

Transcription

1 Tax facts and figures Canada 2017 Canadian individual and corporate tax changes, tax rates, tax deadlines and a wide range of other valuable tax information.

2 Key 2017 income tax rates individuals and corporations For December 31 year end (12-month taxation year). Individuals (page 5) Corporations (page 20) Applies to taxable income above $202,800 in all jurisdictions except: $303,900 in Alberta Top combined marginal rates Combined rates $220,000 in Ontario $500,000 in Yukon Canadian-Controlled Ordinary Canadian dividends Capital General Private Corporations (CCPCs) income and gains and M&P interest Active business Investment Eligible Non-eligible income to $500,000 income Federal 33.00% 16.50% 24.81% 26.30% 15% 10.5% 38.67% Alberta 48.00% 24.00% 31.71% 41.29% 27% 12.5% 50.67% British Columbia 47.70% 23.85% 31.30% 40.95% 26% 12.62% 49.67% Manitoba 50.40% 25.20% 37.78% 45.74% 27% 10.5% or 22.5% 50.67% New Brunswick 53.30% 26.65% 33.51% 46.25% 29% 13.62% 52.67% Newfoundland and Labrador 51.30% 25.65% 42.61% 43.62% 30% 13.5% 53.67% Northwest Territories 47.05% 23.53% 28.33% 35.72% 26.5% 14.5% 50.17% Nova Scotia 54.00% 27.00% 41.58% 46.97% 31% 13.5% 54.67% Nunavut 44.50% 22.25% 33.08% 36.35% 27% 14.5% 50.67% Ontario 53.53% 26.76% 39.34% 45.30% General 26.5% 50.17% 15% M&P 25% n/a Prince Edward Island 51.37% 25.69% 34.22% 43.87% 31% 15% 54.67% Quebec 53.31% 26.65% 39.83% 43.84% General 18.5% 50.47% 26.8% M&P 14.5% n/a Saskatchewan 47.75% 23.88% 30.33% 39.62% General 26.75% 50.41% 12.5% M&P 24.75% n/a Yukon 48.00% 24.00% 24.81% 40.18% General 28.49% 13% 52.15% M&P 17.5% 12% n/a Tax facts and figures is on our website: No part of this booklet may be reproduced without permission from PricewaterhouseCoopers LLP (PwC). Cette brochure est également disponible en français:

3 Tax facts and figures Canada 2017

4 A message from our tax leader Welcome to PwC s 40th edition of Tax facts and figures. This convenient reference tool will help you stay up-to-date on the federal as well as provincial and territorial tax changes, tax rates and tax deadlines that apply to you or your company. Peruse to stay current on a wide range of tax developments. To get our tax publications in your inbox or update your contact information, go to Let s talk For a deeper discussion of how the tax issues in Tax facts and figures might affect you or your business, please contact: your PwC tax adviser any of the individuals listed at Office addresses and telephone numbers are available at Be sure to check out PwC s: Tax rate app* to get the latest corporate, personal and sales tax rates income tax calculator at to estimate your personal tax bill and marginal tax rates worldwide tax summaries at for summaries on corporate and personal tax systems in over 150 countries I also invite you to visit for information on Canadian tax and Canadian, US and global immigration services provided by PwC Law LLP, a law firm affiliated with PwC. We would be happy to help you plan for and respond to the myriad tax and immigration issues you or your business face. Please contact us. Lana Paton National Managing Partner, Tax PwC Canada *To get our Tax rate app, scan this code on your iphone and ipad

5 Contents Click on a heading to go to that page. Highlights for individuals and corporations: 2017 and beyond... 2 Individuals... 4 Individual marginal rates...4 How much tax? Individual tax table...6 Income tax filing and payment deadlines individuals and trusts...7 Health care premiums and personal tax levies...8 Probate fees (for estates over $50,000)...9 Key tax changes Federal Alberta, British Columbia...12 Manitoba...13 New Brunswick, Newfoundland and Labrador Northwest Territories, Nova Scotia Nunavut, Ontario Prince Edward Island Quebec...18 Saskatchewan, Yukon...19 Individuals and corporations CPP/QPP, EI and QPIP premiums...35 Sales tax rates...36 Retirement savings and profit sharing plans...37 R&D tax credits...38 Land transfer tax and registration fees...39 Filing deadlines...40 Prescribed interest rates income, capital and payroll taxes...41 Canada s treaty withholding tax rates...42 Corporations Corporate income tax rates...20 Other federal tax rates and income tax deadlines...21 Provincial income tax holidays and M&P investment tax credits...22 Payroll tax rates...23 Financial institutions capital tax rates and deadlines...24 Key tax changes...25 Federal...25 Alberta...26 British Columbia Manitoba, New Brunswick...28 Newfoundland and Labrador, Northwest Territories...29 Nova Scotia, Nunavut Ontario Prince Edward Island, Quebec...32 Saskatchewan, Yukon This booklet is published with the understanding that PwC is not thereby engaged in rendering accounting, legal or other professional service or advice. The comments included in this booklet are not intended to constitute professional advice, nor should they be relied upon to replace professional advice. Rates and other information are current to June 26, 2017, but may change as a result of legislation or regulations issued after that date.

6 Highlights for individuals and corporations: 2017 and beyond Federal Personal and corporate income tax rates: unchanged (pp. 10, 25) Tax system review: targets tax planning and tax reduction strategies that use private corporations to unfairly advantage high-income individuals (p. 10) Principal residence exemption: reporting requirements expanded, starting 2016, and exemption restricted for certain trusts and non-residents (p. 10) Sale of real or immovable property: assessment period extended for taxation years ending after October 2, 2016 (p. 10) Billed-basis accounting: deduction for cost of work in progress restricted, for taxation years beginning after March 21, 2017, for designated professions (p. 10) Derivatives: timing and recognition of gains and losses on derivatives held on income account clarified (p. 25) Country-by-country reporting: form and additional guidance issued; an arrangement to allow for the exchange of country-by-country reports signed with the United States (p. 26) Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS): signed by Canada (p. 26) Enhanced Canada Pension Plan: higher contributions to be phased in over seven years, starting 2019 (p. 11) Voluntary Disclosures Program (VDP): significant changes proposed (p. 11) Income tax objection process: improvements planned (p. 11) Tax avoidance and evasion: to be targeted by additional resources and aggressive enforcement and timelines (p. 11) Alberta Personal income tax rates: increasing for non-eligible dividends, starting 2017 (p. 12) Corporate income tax rates: general and M&P rate unchanged; CCPC rate decreased from 3% to 2% on January 1, 2017 (p. 26) British Columbia Because of the May 9, 2017 election, it is uncertain whether British Columbia tax changes that have not been enacted into law will proceed. At the publication date, the 2017 British Columbia budget measures had not been enacted. Personal income tax rates: increasing for non-eligible dividends, starting 2017 (p. 12) Corporate income tax rates: general and M&P rate unchanged; CCPC rate decreased from 2.5% to 2% on April 1, 2017 (p. 27) Land transfer tax: 15% additional tax imposed on foreign buyers of residential property in the Greater Vancouver Regional District transferred after August 1, 2016 (pp. 13, 27) Manitoba Personal and corporate income tax rates: unchanged (pp. 13, 28) Financial corporation capital tax: $10 million deduction eliminated for fiscal years ending after April 30, 2017 (p. 28) Research and development tax credit: rate reduced from 20% to 15% for eligible expenditures made after April 11, 2017 (p. 28) New Brunswick Personal income tax rates: changing for eligible and non-eligible dividends in 2017 (p. 14) Corporate income tax rates: general and M&P rate unchanged; CCPC rate decreasing from 3.5% to 3%, on April 1, 2017, and to 2.5% by 2018 (p. 28) Newfoundland and Labrador Personal income tax rates: increasing at all taxable income levels in 2017 (p. 14) Corporate income tax rates: unchanged (p. 29) 2

7 Highlights for individuals and corporations: 2017 and beyond Northwest Territories Personal and corporate income tax rates: unchanged (pp. 15, 29) Nova Scotia Personal and corporate income tax rates: unchanged (pp. 15, 30) Small business threshold: increased from $350,000 to $500,000 on January 1, 2017 (p. 30) Nunavut Personal and corporate income tax rates: unchanged (pp. 16, 30) Ontario Personal and corporate income tax rates: unchanged (pp. 16, 31) Land transfer tax: 15% additional tax imposed on foreign buyers of residential property in the Greater Golden Horseshoe for agreements signed after April 20, 2017 (pp. 17, 31) Prince Edward Island Personal and corporate income tax rates: unchanged (pp. 17, 32) Saskatchewan Personal income tax rates: decreasing at all income levels in 2017, 2018, 2019 and 2020 (p. 19) Corporate income tax rates: general rate decreasing from 12% to 11.5% on July 1, 2017, and to 11% on July 1, 2019; minimum M&P rate decreasing from 10% to 9.5% on July 1, 2017, and to 9% on July 1, 2019; CCPC rate unchanged (p. 34) Financial corporation capital tax: rate increased from 3.25% to 4% for large financial institutions on April 1, 2017 (p. 34) Research and development tax credit: new 10% refundable tax credit, starting April 1, 2017, and total refundable and non-refundable tax credits capped at $1 million per year (p. 34) Provincial Sales Tax (PST): rate increased from 5% to 6% on March 23, 2017, and PST base expanded on April 1, 2017 (pp. 19, 34) Yukon Personal income tax rates: increasing for eligible and non-eligible dividends, starting 2018 (p. 19) Corporate income tax rates: decreasing on July 1, 2017 general rate from 15% to 12% and CCPC non-m&p rate from 3% to 2%; M&P rate and CCPC M&P rate unchanged (p. 34) Quebec Personal income tax rates: unchanged (p. 18) Employee stock option deduction: increased from 25% to 50% for options granted after February 21, 2017, in shares of certain public corporations (p. 18) Corporate income tax rates: general and M&P rate decreasing from 11.9% to 11.5% over four years, starting 2017; CCPC regular rate remains 8% and lowest CCPC M&P rate remains 4%; criteria to qualify for CCPC rates revised after 2016, which may increase rates (p. 32) Business tax credits: many changes (p. 33) 3

8 Individuals Individual marginal rates The tables on this page and page 5 show 2017 combined federal and provincial (or territorial) marginal tax rates the percentage of tax paid on the last dollar of income, or on additional income. Provincial brackets below $11,635 are not shown. Brackets $ Taxable income $11,635 to $45,916 Taxable income $45,916 to $91,831 Taxable income $91,831 to $142,353 Ordinary Capital Canadian dividends 1 Brackets Ordinary Capital Canadian dividends 1 Brackets Ordinary Capital Canadian dividends 1 income & gains Eligible Non-eligible $ income & gains Eligible Non-eligible $ income & gains Eligible Non-eligible interest % % % % interest % % % % interest % % % % Federal 11, (0.03) to , , , (0.03) to , Alberta 45, , (0.03) to , , British 38, (3.20) to , , Columbia 11, (6.84) to , , to , to , Manitoba 91, , to , New Brunswick 41, to , , , (5.99) to , , Newfoundland and Labrador Northwest Territories Nova Scotia Nunavut Ontario 35,851 11,635 41,585 14,278 11,635 29,590 11,635 43,780 13,128 11,635 42,201 11, to to 4.55 (4.03) to 0 (7.76) to 0 (0.03) to to8.42 (0.11) to to 2.06 (2.11) to 0 (0.03) to 0 (1.20) to 0 (6.86) to to ,701 45,916 83,172 45,916 59,180 45,916 87,560 45, to , , , , to , , ,010 91, ,219 91,831 93,000 91, , , Prince Edward Island 31,984 11, to 4.55 (0.99) to ,408 91, Quebec 42, to , , , to , , , (0.02) to Saskatchewan 45, to , , (0.03) to , , , (0.03) to Yukon 11, (11.90) to , (0.72) to , to Non-resident 2 11, (0.04) to , , See page 5 for footnotes. 4

9 Individuals Individual marginal rates (continued) Brackets $ Taxable income $142,353 to $202,800 Taxable income > $202,800 Ordinary Capital Canadian dividends 1 Brackets Ordinary Capital Canadian dividends 1 income & gains Eligible Non-eligible $ income & gains Eligible Non-eligible interest % % % % interest % % % % Federal 142, , Alberta , ,353 British Columbia 142, , Manitoba 142, , New Brunswick 152, , , Newfoundland 179, and Labrador 142, , Northwest Territories 142, , Nova Scotia 150, , , Nunavut 142, , Ontario 150, , , ,800 Prince Edward Island 142, , Quebec 142, , Saskatchewan 142, , Yukon 142, to , , to Non-resident 2 142, , , , Eligible dividends are designated as such by the payor. Most dividends paid by public corporations are eligible dividends. When two dividend rates are indicated, the rate that applies depends on the level of the taxpayer s other income, with the higher rate applying if the taxpayer has no other income. 2. Non-resident rates for interest and dividends apply only in limited cases; generally, interest (other than most interest paid to arm s-length non-residents) and dividends are subject to Part XIII non-resident withholding tax. 5

10 Individuals How much tax? Individual tax table This table shows 2017 combined federal and provincial (or territorial) income taxes payable, assuming all income is interest or ordinary income (such as salary) and only the basic personal tax credit is claimed (except for non-residents). Certain types of income and deductions may trigger alternative minimum tax (AMT), affecting the results. For Quebec, the federal income tax amounts shown should be reduced by the 16.5% Quebec abatement. See page 18. This table assumes the non-resident will not qualify for the basic personal tax credit. A non-resident can claim this credit only if all or substantially all (i.e. 90% or more) of his or her worldwide income is included in taxable income earned in Canada for the year. Instead of provincial or territorial tax, non-residents pay an additional 48% of basic federal tax on income taxable in Canada that is not earned in a province or territory. Non-residents are subject to provincial or territorial rates on employment income earned, and business income connected with a permanent establishment, in the respective province or territory. Different rates may apply to non-residents in other circumstances. For the taxation of interest and dividends paid to non-residents, see footnote 2 on page 5. Taxable income Federal income tax Combined 2017 federal and provincial/territorial income tax AB BC MB NB NL NWT NS NU ON PEI QC SK YT Nonresident $1,000,000 $308,296 $447,310 $447,362 $477,519 $501,328 $483,791 $441,335 $508,688 $416,148 $498,663 $486,419 $505,602 $450,580 $440,908 $458,861 $1,000, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,000 77, , , , , , , , , , , , , , , , ,000 60,796 87,849 89,612 99, ,578 99,041 88, ,688 82,398 97, , ,814 92,455 86,408 92, , ,000 44,408 64,487 65,874 74,431 75,040 73,503 65,047 76,800 60,260 70,850 75,571 79,255 68,692 63,620 68, , ,000 29,908 43,507 44,024 51,231 50,441 50,145 43,522 51,800 40,010 46,865 51,886 54,273 46,817 42,720 46, , ,000 16,679 24,810 23,648 29,302 28,734 28,686 23,919 29,821 22,089 24,931 29,471 30,420 26,797 23,895 27, ,000 90,000 14,179 21,310 19,920 25,062 24,583 24,607 20,200 25,596 18,690 20,691 25,275 25,933 23,023 20,341 23,568 90,000 80,000 12,129 18,260 16,808 21,272 20,917 20,977 17,044 21,879 15,891 17,310 21,555 22,037 19,698 17,391 20,534 80,000 70,000 10,079 15,210 13,926 17,482 17,385 17,369 14,134 18,162 13,141 14,240 17,835 18,326 16,373 14,441 17,500 70,000 60,000 8,029 12,160 11,106 14,065 13,853 13,869 11,224 14,445 10,391 11,275 14,230 14,614 13,048 11,491 14,466 60,000 50,000 5,979 9,110 8,286 10,740 10,321 10,369 8,314 10,886 7,641 8,310 10,800 10,902 9,723 8,541 11,432 50,000 40,000 4,255 6,386 5,791 7,740 7,169 7,194 5,772 7,667 5,330 5,761 7,696 7,570 6,828 6,070 8,880 40,000 30,000 2,755 3,886 3,756 4,993 4,701 4,584 3,682 4,672 3,430 3,756 4,895 4,718 4,253 3,930 6,660 30,000 20,000 1,255 1,386 1,750 2,413 2,233 2,214 1,592 2,267 1,530 1,751 2,415 1,865 1,678 1,790 4,440 20,000 Taxable income 6

11 Individuals Income tax filing and payment deadlines individuals and trusts Deadlines falling on holidays or weekends may be extended to the next business day. See page 40 for other filing deadlines. Individuals Trusts Inter vivos Testamentary Trusts However, the Canada Revenue Agency s administrative policy is to not charge instalment interest or penalties to a trust. Instalments for 2017 Required If tax payable in 2017 and either 2016 or 2015 exceeds tax withheld by more than $3,000 ($1,800 for Quebec residents) Deadline 15th of March, June, September, December Graduated rate estates (an estate that is a testamentary trust, for the first 36 months after the date of death) are not required to remit instalments. Inter vivos Testamentary Applies to unit trusts, including mutual fund trusts. Mutual fund trusts can elect to have a taxation year that ends on December 15. Trust created Year end Tax rate During lifetime December 31 On death An exception applies to graduated rate estates, which can have non-calendar year ends. Filing deadline and balance due April 30 (extensions may be available) Top personal tax rate 90 days after trust year end See page 5 for tax rates. Tax forms T1 (and TP-1.D-V for Quebec filers) T3 (and TP-646-V for Quebec filers) Exceptions apply to graduated rate estates and qualifying disability trusts, which are taxed at personal marginal tax rates. Non-residents are not subject to instalment or filing requirements on these (and certain other) receipts. Instead, 25% Part XIII withholding tax applies (may be reduced by treaty). If a taxpayer (or his/her spouse) carried on a business and died: January 1 to December 15, filing deadline 1 is June 15 of the following year December 16 to December 31, filing deadline 1 is 6 months after date of death Special cases Filing Taxpayer (or spouse) carried June 15 1 on a business If a non-resident receives: rental income on Canadian real property and elects to file under section 216, filing deadline is two years after end of year the income was paid or Non-resident credited (June 30 if NR6 was filed) certain Canadian pension, retirement and social assistance benefits and elects to file under section 217, filing deadline is June 30 Taxpayer died Return for year of death If a taxpayer died: January to October, filing deadline 1 is April 30 November to December, filing deadline 1 is 6 months after date of death Return for year before death If a taxpayer died: after year-end, but before filing deadline for previous year s return, filing deadline 1 is 6 months after date of death 1. Applies to taxpayer and his or her spouse. Balance due April 30 (no extension) For deceased, if died: January to October, April 30 November to December, 6 months after date of death For spouse, April 30. For deceased, 6 months after date of death. For spouse, April 30. 7

12 Individuals Health care premiums and personal tax levies for 2017 The health care premiums and personal tax levies shown are payable by individuals, but may be remitted through payroll withholdings. Starting January 1, 2018, for the Medical Services Plan premium: households with annual net incomes up to $120,000 will pay 50% less premiums assistance for low-income earners will be enhanced See page 13. British Columbia Quebec Quebec Health Services Fund Medical Services Plan Prescription Drug Insurance Plan Individuals are subject to Quebec Health Services Fund contributions on income from all sources except employment, the gross-up on dividends and certain other exclusions. Individuals $660 Annual Income (subject to Annual premiums per individual premium) < $29,545 1% of income > $14,545 $29,545 to $135,750 $ % of income > $50,570 $135,570 $1,000 Employers are also liable for contributions to the Quebec Health Services Fund. See page 23. Maximum premiums Single $75.00 Couple $ Frequency Monthly Low-income earners can get assistance; children under 19 and dependent postsecondary students enrolled in full-time studies are exempt Exemptions apply (e.g. individuals covered by a group insurance plan, certain seniors, students) The premium will be adjusted on July 1, 2017 Quebec s health contribution was eliminated: on January 1, 2017, one year earlier than previously announced retroactively for 2016, when net income for that year $134,095 (when net income > $134,095, the health contribution equals 4% of the excess, to a maximum of $1,000) Thresholds are indexed. Relief The levy will be phased out over three years starting in Newfoundland and Labrador Temporary Deficit Reduction Levy Ontario Health Premium Taxable income Annual premiums per individual Fixed + 10% of taxable portion income > < $51,000 $0 $50,000 $51,000 to $56,000 $100 $55,000 $56,000 to $61,000 $200 $60,000 $61,000 to $66,000 $300 $65,000 $66,000 to $71,000 $400 $70,000 $71,000 to $76,000 $500 $75,000 $76,000 to $81,000 $600 $80,000 $81,000 to $101,000 $700 $100,000 $101,000 to $126,000 $800 $125,000 $126,000 to $176,000 $900 $175,000 $176,000 to $251,000 $1,000 $250,000 $251,000 to $301,000 $1,100 $300,000 $301,000 to $351,000 $1,200 $350,000 $351,000 to $401,000 $1,300 $400,000 $401,000 to $451,000 $1,400 $450,000 $451,000 to $501,000 $1,500 $500,000 $501,000 to $551,000 $1,600 $550,000 $551,000 to $601,000 $1,700 $600,000 $601,000 $1,800 n/a Taxable income Annual premiums per individual < $25,000 6% of income > $20,000 $25,000 to $38,500 $ % of income > $36,000 $38,500 to $48,600 $ % of income > $48,000 $48,600 to $72,600 $ % of income > $72,000 $72,600 to $200,600 $ % of income > $200,000 $200,600 $900 8

13 Individuals Probate fees (for estates over $50,000) Probate is an administrative procedure under which a court validates a deceased s will and confirms the appointment of the executor. This table shows probate fees or administrative charges for probating a will. Other fees may also apply. For some provinces and territories, different rates may apply to smaller estates (less than $50,000). Example fees Fee schedule (value over $50,000) $500,000 $2,000,000 $5,000,000 value value value Alberta $275 to $525 $525 British Columbia $ % of portion > $50,000 $6,650 $27,650 $69,650 Manitoba $ % of portion > $10,000 $3,500 $14,000 $35,000 New Brunswick 0.5% of estate $2,500 $10,000 $25,000 Newfoundland and Labrador $ % of portion > $1,000 $3,054 $12,054 $30,054 Northwest Territories $215 to $435 $435 Nova Scotia $1, % of portion > $100,000 $7,783 $33,208 $84,058 Nunavut $200 to $400 $400 Ontario $ % of portion > $50,000 $7,000 $29,500 $74,500 Prince Edward Island $ % of portion > $100,000 $2,000 $8,000 $20,000 Quebec Nominal fee Saskatchewan 0.7% of estate $3,500 $14,000 $35,000 Yukon $140 $140 Although Quebec does not levy probate fees, wills (other than notarial wills) must be authenticated by the Superior Court of Quebec. A nominal fee applies. 9

14 Individuals Key tax changes Federal Ordinary income Top federal rates Capital Dividends gains Eligible Non-eligible 33% 16.50% 24.81% 26.30% 2017 Federal Basic personal amount $11,635 Indexing factor 1.4% Bracket $0 $45,916 $91,831 $142,353 $202,800 Rate 15% 20.5% 26% 29% 33% Highlights of changes Tax system review: The government is reviewing tax planning and tax reduction strategies that use private corporations to unfairly advantage high-income individuals. These strategies include: causing income to be realized by an individual subject to a low or nil tax rate instead of by a high-tax rate family member retaining in a corporation business earnings that have been subject only to low corporate tax rates, to facilitate the accumulation of passive investments converting income that would be paid as a salary or dividend into corporate capital gains, allowing funds to be distributed at a lower tax rate The government is also reviewing features of the tax system that inappropriately affect genuine business transactions involving family members and intends to release a paper in the coming months on these issues with proposed policy responses. Principal residence exemption: Changes: require individuals who sell their principal residence after 2015 to report the sale (i.e. date of acquisition, proceeds of disposition and description of the property) and the principal residence designation, on their income tax returns to claim the full principal residence exemption; see our Tax Insights Selling your home? Reporting is now required at ensure that non-residents who acquire residential properties can no longer claim a portion of the principal residence exemption to shelter gains on a later sale, for dispositions after October 2, 2016; see our Tax Insights Canada targets trusts and non-residents holding residential property at limit the types of trusts that can claim the principal residence exemption, for dispositions by a trust in (or after) its first taxation year that begins after 2016 (transitional rules apply); see our Tax Insights Canada targets trusts and nonresidents holding residential property at Sale of real or immovable property: For taxation years ending after October 2, 2016, the Canada Revenue Agency (CRA) can reassess tax, after the end of the normal reassessment period, on a gain from the disposition of real or immovable property if the taxpayer does not initially report the disposition. See our Tax Insights Canada targets trusts and non-residents holding residential property at Billed-basis accounting: Taxpayers in certain designated professions (accountants, dentists, lawyers, medical doctors, veterinarians and chiropractors) can no longer exclude work in progress in computing their income, for taxation years beginning after March 21, 2017 (subject to a transitional rule). Automobile deductions and benefits: The 2017 prescribed rates for purposes of determining operating cost benefits for automobiles are 1 per kilometre lower than for All other 2017 prescribed rates will remain at their 2016 levels. See Car expenses and benefits A tax guide at Public transit tax credit: This credit is eliminated for public transit use after June Tuition tax credit: For courses taken after 2016, tuition fees paid for occupational skills courses offered by a university, college or other post-secondary institution and that are not at the post-secondary level will qualify for this credit, if the individual takes the course to acquire skills in an occupation and is at least 16 by the end of the year. Also, beginning 2017, these individuals will be qualifying students for the purposes of the tax exemption for scholarships and bursaries. Disability tax credit: As of March 22, 2017, nurse practitioners, whose profession is regulated by provincial and territorial nursing regulatory bodies throughout Canada, can certify eligibility for disability tax credits for impairments within the scope of their practice. Medical expense tax credit: Starting 2017, individuals requiring medical intervention to conceive a child can claim the same medical expenses as individuals experiencing medical infertility. If an election is made, this measure can apply for any of the immediately preceding ten years. Caregiver tax credit: Beginning 2017, a new Canada Caregiver Credit will replace the caregiver credit, infirm dependant credit and family caregiver tax credit. The new credit will not require the dependant to live with the caregiver and will not apply in respect of non-infirm seniors who reside with their adult children. Home relocation loans deduction: This deduction is eliminated, starting Anti-avoidance rules for registered plans: Certain anti-avoidance rules (i.e. the advantage rules, the prohibited investment rules and the non-qualified investment rules) that apply to Tax-Free Savings Accounts (TFSAs), Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) will be extended to Registered Education Savings Plans and Registered Disability Savings Plans, for transactions occurring after March 22, 2017 (exceptions to this date apply). 10

15 Individuals Payment of investment management fees: The CRA is considering whether, starting January 1, 2018, the payment of investment management fees in respect of registered plans, such as RRSPs, RRIFs or TFSAs, by a plan annuitant or holder will, in most cases, create an advantage. Retirement savings plans and deferred profit sharing plans: Contribution limits will increase. See page 37. Defined benefit registered pension plans (RPPs): The maximum pension benefit that can be paid from these plans is increasing as shown: Pension benefit (per year of service) $2,890 $2,914 Indexed Amounts are 1/9 the defined contribution RPP maximum contribution limit for the year. See page 37. Canada Pension Plan (CPP): Enhancements to the CPP mean that: annual CPP contributions will increase for employers and employees: 2019 to 2023 higher contribution rate will be phased in (from 4.95% before 2019 to 5.95% in 2023) on earnings below the Yearly Maximum Pensionable Earnings (YMPE), which is $55,300 in 2017, projected to be $59,700 in 2019 and $67,800 in to 2025 an enhanced contribution rate (expected to be 4%) will apply to earnings between the YMPE (projected to be $70,100 in 2024 and $72,500 in 2025) and the upper earnings limit (projected to be $74,900 in 2024 and $82,700 in 2025); enhanced CPP contributions will be deductible As a result, maximum contributions for employers and employees will be as follows: Regular Enhanced Maximum pensionable earnings $55,300 $67,800 $72,500 $82,700 Less: Exempt portion $3,500 $3,500 $3,500 $72,500 Maximum contributory earnings $51,800 $64,300 $69,000 $10,200 Contribution rate 4.95% 5.95% 5.95% 4% Maximum contribution $2,564 $3,826 $4,106 $408 The maximum CPP contribution in 2025 will be $4,514 (regular of $4,106 and enhanced of $408). Ecological gifts: New measures are intended to protect gifts of ecologically sensitive property (ecogifts), for transactions or events occurring after March 21, Voluntary Disclosures Program (VDP): In response to the recommendations of the Standing Committee on Finance and the report of the Offshore Compliance Advisory Committee which commented on the perceived shortcomings of the VDP the CRA released draft IC00-1R6, which proposes significant changes to the administration of the VDP. See our Tax Insights Voluntary Disclosures Program: Drastic changes underway at Income tax objection process: The CRA intends to improve this process in response to recommendations in the 2016 Fall Reports of the Auditor General of Canada Report 2, which examines whether the CRA has managed income tax objections efficiently. See our Tax Insights Improvements coming to income tax objection process: What they are at Tax avoidance and evasion: The CRA will: expand its review of international electronic funds transfers; see our Tax Insights CRA fishing net expands at increase verification activities hire additional auditors and specialists to focus on the underground economy develop robust business intelligence infrastructure and risk assessment systems to target high-risk international tax and abusive tax avoidance cases improve the quality of investigative work that targets criminal tax evaders In addition, the Minister of National Revenue accepted the 14 recommendations in the House of Commons Standing Committee on Finance report The Canada Revenue Agency, Tax Avoidance and Tax Evasion: Recommended Actions. See our Tax Insights at : Government commits to aggressive timelines for recommendations on tax avoidance and tax evasion Government progress report vows to crack down on tax cheats Tax treaties: Recent developments are shown below. the Working Income Tax Benefit will be enhanced income replacement will increase from 1/4 of pensionable earnings to 1/3 Mineral exploration tax credit for flow-through shares: This credit is extended by one year to apply to flow-through share agreements entered into before April 1, See page 42. Tax treaties Ratified and entered into force Israel Taiwan Signed but awaiting ratification Madagascar Under negotiation Germany Republic of San Marino Switzerland 11

16 Individuals Alberta British Columbia Top combined rates Ordinary Capital Dividends income gains Eligible Non-eligible % 48.00% 24.00% 31.71% % 2017 Alberta Basic personal amount $18,690 Indexing factor 1.3% Bracket $0 $126,625 $151,950 $202,600 $303,900 Rate 10% 12% 13% 14% 15% Ordinary income Top combined rates Capital Dividends gains Eligible Non-eligible 40.61% % 23.85% 31.30% % 2017 British Columbia Basic personal amount $10,208 Indexing factor 1.8% Bracket $0 $38,898 $77,797 $89,320 $108,460 Rate 5.06% 7.7% 10.5% 12.29% 14.7% Can be reduced for low incomes. Highlights of changes Dividends: Non-eligible dividends Dividend gross-up 17% Dividend tax credit (on grossed-up dividend) 3.08% 2.19% Top combined rate 40.25% 41.29% Political contribution tax credit: For political contributions made after 2016, this credit is extended to contributions to party leadership elections and candidate nomination races that meet the criteria established under the Election Finances and Contributions Disclosure Act. Because of the May 9, 2017 election, it is uncertain whether British Columbia tax changes that have not been enacted into law will proceed. At the publication date, the 2017 British Columbia budget measures had not been enacted. Highlights of changes Dividends: Non-eligible dividends Dividend gross-up 17% Dividend tax credit (on grossed-up dividend) 2.47% 2.18% Top combined rate 40.61% 40.95% Education tax credit: This credit will be eliminated on January 1, Unused credits can be claimed in 2018 and later years. Back-to-school tax credit: Parents can claim this new non-refundable tax credit that provides a benefit of up to $13 for each child who is 5 to 17 years old at the end of the year. The credit is available for 2016 to 2018, after which it will be reviewed. Volunteer firefighter and search and rescue volunteer tax credit: Starting 2017, individuals who provide at least 200 hours of volunteer service to a volunteer fire department and/or an eligible search and rescue organization can claim a nonrefundable tax credit that provides a benefit of up to $152 per year. Training tax credits: These credits are extended three years to December 31, Mining tax credits: BC mining flow-through share tax credit The credit is extended by one year to December 31, Mining exploration tax credit Qualified expenses that are eligible for this credit will include expenditures incurred after February 28, 2015, for environmental studies and community consultations incurred to obtain a right, licence or privilege related to carrying out grassroots mining exploration. Sales Tax: Recommendations of the Commission on Tax Competitiveness include engaging the public to consider and design a made-in-bc value added tax. 12

17 Individuals Medical Services Plan: Changes to maximum monthly premiums and the rate structure follow: Starting 2018: households with annual net incomes up to $120,000 will pay 50% less premiums, but will have to register to receive this reduction the income threshold up to which a household receives full premium assistance will increase by $2,000 Before January 1, January 1, No children $75 Singles $75 With children See Family Couples No children or with children $150 2 persons $136 Family See Singles or > 2 persons $150 Couples Increases to the premiums scheduled for 2017 were not implemented. The rates shown apply when annual household net income is: in 2017 over $42,000 for single adults or over $45,000 for couples (different thresholds apply to senior couples and families) in 2018 over $120,000 for all singles, couples and families Land transfer tax: First time home buyers program For transfers registered after February 21, 2017, the fair market value threshold for eligible residential property under this program will increase from $475,000 to $500,000 (full exemption) and from $500,000 to $525,000 (partial exemption). Foreign buyers For transfers registered after August 1, 2016, a 15% property transfer tax is imposed (in addition to the general property transfer tax) on foreign purchasers of residential property in the Greater Vancouver Regional District. Relief from the tax is provided to certain foreigners. See our Tax Insights at BC imposes new 15% tax on foreign buyers of residential property BC provides some foreign buyers relief from 15% property transfer tax Manitoba Ordinary income Top combined rates Capital Dividends gains Eligible Non-eligible 50.40% 25.20% 37.78% 45.74% 2017 Manitoba Basic personal amount $9,271 Indexing factor 1.5% Bracket $0 $31,465 $68,005 Rate 10.8% 12.75% 17.4% Can be reduced for low incomes. Tuition fee income tax rebate: Changes: eliminate the rebate after December 31, 2017 decrease the maximum rebate from $2,500 to $500 for 2017 eliminate the tax rebate advance for tuition and ancillary fees paid relating to a school term that begins after April 2017 Primary caregiver tax credit: Revisions: cap this refundable tax credit at $1,400, starting 2017 eliminate the limit of three care recipients provide that eligibility begins in the year the application is submitted to the assessing authority prohibit retroactive claims for years before 2017 (transitional rules apply to certain applications submitted in 2017) Political contributions tax credit: Starting 2018, the maximum contribution eligible for this credit will increase from $1,275 to $2,325, increasing the maximum annual credit from $650 to $1,000. Seniors school tax rebate and the volunteer firefighter and search and rescue tax credits: Amendments will ensure these incentives target Manitoba residents. Technical amendments: Enforcement and administration measures will be enhanced under The Tax Administration and Miscellaneous Tax Act and The Retail Sales Tax Act. 13

18 Individuals New Brunswick Ordinary income Top combined rates Capital Dividends gains Eligible Non-eligible 34.20% 45.81% % 26.65% % 46.25% Highlights of changes Dividends: Eligible dividends Non-eligible dividends Dividend gross-up 38% 17% Dividend tax credit (on grossed-up dividend) 13.5% 14% 3.625% 3.245% Top combined rate 34.20% 33.51% 45.81% 46.25% 2017 New Brunswick Basic personal amount $9,895 Indexing factor 1.4% Bracket $0 $41,059 $82,119 $133,507 $152,100 Rate 9.68% 14.82% 16.52% 17.84% 20.3% Can be reduced for low incomes. Education and tuition tax credits: These credits are eliminated after December 31, 2016, but unused credits can be carried forward for use after Newfoundland and Labrador Top combined rates Ordinary Dividends income gains Eligible Non-eligible % 24.90% 40.54% 41.16% or 41.86% % 25.65% 42.61% 43.62% For non-eligible dividends, 41.16% applies before July 1, Highlights of changes Personal tax system: Income tax rates Highest 16.8% 18.3% 15.8% 17.3% 14.55% 15.8% 13.5% 14.5% Lowest 8.2% 8.7% Dividends: Eligible dividends Non-eligible dividends before after 2017 July 1 June 30 Dividend gross-up 38% 17% Dividend tax credit (on grossed-up dividend) 5.4% 4.1% 3.5% Top combined rate 40.54% 42.61% 41.16% 41.86% 43.62% 2017 Newfoundland and Labrador Basic personal amount $8,978 Indexing factor 2.0% Bracket $0 $35,851 $71,701 $128,010 $179,214 Rate 8.7% 14.5% 15.8% 17.3% 18.3% Can be reduced for low incomes. Tax review: Newfoundland and Labrador will launch a comprehensive review of its tax system to simplify it and reduce costs for both government and taxpayers. 14

19 Individuals Northwest Territories Nova Scotia Ordinary income Top combined rates Capital gains Dividends Eligible Non-eligible 47.05% 23.53% 28.33% 35.72% 2017 Northwest Territories Basic personal amount $14,278 Indexing factor 1.4% Bracket $0 $41,585 $83,172 $135,219 Rate 5.9% 8.6% 12.2% 14.05% Ordinary income Top combined rates Capital gains Dividends Eligible Non-eligible 54.00% 27.00% 41.58% 46.97% 2017 Nova Scotia Basic personal amount $8,481 Indexing factor n/a Bracket $0 $29,590 $59,180 $93,000 $150,000 Rate 8.79% 14.95% 16.67% 17.5% 21% Can be reduced for low incomes. Highlights of changes Overseas employment tax credit: This credit is eliminated effective Highlights of changes Personal tax system: Changes to Nova Scotia s personal amounts follow: Personal amounts Basic / spouse / equivalent to spouse $8,481 $8,481 to $11,481 Age $4,141 $4,141 to $5,606 Starting 2018, individuals with taxable income: < $25,000 will qualify for the $11,481 and $5,606 personal amounts $25,000 will have the $11,481 and $5,606 personal amounts gradually reduced to $8,481 and $4,141, respectively as taxable income approaches $75,000 15

20 Individuals Nunavut Ordinary income Top combined rates Capital gains Dividends Eligible Non-eligible 44.50% 22.25% 33.08% 36.35% 2017 Nunavut Basic personal amount $13,128 Indexing factor 1.4% Bracket $0 $43,780 $87,560 $142,353 Rate 4% 7% 9% 11.5% Highlights of changes Tax rates review: Nunavut plans to review in its fiscal year: the methods used to set tax rates the appropriateness of current tax rates for all tax types Ontario Ordinary income Top combined rates Capital gains Dividends Eligible Non-eligible 53.53% 26.76% 39.34% 45.30% Dividend tax rates are determined by calculating the Ontario surtax before deducting dividend tax credits from Ontario tax Ontario Basic personal amount $10,171 Indexing factor 1.6% Bracket $0 $42,201 $84,404 $150,000 $220,000 Rate 5.05% 9.15% 11.16% 12.16% 13.16% Can be reduced Surtax: 20% of basic provincial tax in excess of $4,556 for low incomes. + 36% of basic provincial tax in excess of $5,831. Highlights of changes Medical expense tax credit: Starting 2017, individuals requiring medical intervention to conceive a child can claim the same medical expenses as individuals experiencing medical infertility. Caregiver tax credit: Beginning 2017, a new Ontario Caregiver Credit will replace the caregiver and infirm dependant tax credits. The new credit will not require the dependant to live with the caregiver and will not apply in respect of non-infirm seniors who reside with their adult children. Seniors public transit tax credit: This new 15% refundable tax credit will be available for Ontarians age 65 and older, for eligible public transit costs after June 30, 2017 (maximum credit is $225 for 2017 and $450 for subsequent years). Multijurisdictional tax filers: For taxation years ending after December 31, 2016, the calculation of the provincial surtax and the Ontario tax reduction will be revised for Ontario residents who pay tax to another province, and non-residents of Ontario who pay tax to Ontario. Tax system review: To promote fairness and efficiency and the integrity of the tax system, Ontario will conduct a policy, legislative and administrative review of all taxes, including those shared with the federal government. Income tax avoidance: Ontario will: devote expert resources to identify and address tax loopholes and sophisticated tax planning schemes work with the federal government to protect the common tax base and eliminate unfair tax advantages 16

21 Individuals Land transfer tax (LTT): Ontario LTT For transfers of property after December 31, 2016: the LTT rates increase (see page 39 and table below) the maximum first-time homebuyers LTT refund increases from $2,000 to $4,000, and the refund is available only to Canadian citizens and permanent residents Transitional rules apply. For more information, see our Tax Insights Ontario changes Land Transfer Tax and Ontario Interactive Digital Media Tax Credit rules at New LTT reporting requirement Starting April 24, 2017, persons that acquire land containing between one and six single family residence(s), or agricultural land, are required to report additional information; until May 5, 2017, failure to comply will not affect registration or result in penalties. Toronto municipal land transfer tax (MLTT) For transfers of property after February 28, 2017: the MLTT rates and structure will be the same as Ontario s (see page 39 and table below) the maximum first-time homebuyers MLTT rebate increases from $3,725 to $4,475 and this rebate is available only to Canadian citizens and permanent residents Foreign buyers For agreements of purchase and sale signed after April 20, 2017, a 15% non-resident speculation tax is imposed on foreign purchasers of certain residential property in the Greater Golden Horseshoe. Relief from the tax is provided to certain foreigners. See page 39 and our Tax Insights Ontario imposes new 15% tax on foreign buyers of residential property at A $75 fee also applies. General Family dwelling (one or two units) For transfers of property before January 1, 2017 before March 1, 2017 after December 31, 2016 after February 28, 2017 Ontario LTT Toronto MLTT Ontario LTT Toronto MLTT (of portion of value) (of portion of value) 0.5% $55,000 $55, % from $55,000 to $250, % > $250,000 from $55,000 to $400,000 from $400,000 to $40 million from $55,000 to $250,000 from $250,000 to $400, % > $40 million n/a n/a + 2% n/a > $400,000 As above + 0.5% > $400,000 from $400,000 to $40 million > $2 million + 1% n/a > $40 million n/a Prince Edward Island Ordinary income Top combined rates Capital gains Dividends Eligible Non-eligible 51.37% 25.69% 34.22% 43.87% Highlights of changes Personal tax system: Changes to Prince Edward Island s personal amounts follow: Personal amounts Basic $8,000 $8,160 Spouse / equivalent to spouse $6,795 $6,931 Prince Edward Island will prepare a report on its income tax credits to help guide a review of these credits in future provincial budgets Prince Edward Island Basic personal amount $8,160 Indexing factor Bracket $0 $31,984 $63,969 Rate 9.8% 13.8% 16.7% Can be reduced Surtax: 10% of basic provincial for low incomes. tax in excess of $12,500. Community Development Equity Tax Credit: Starting January 1, 2017, the revenues of a corporation or association must be under $50 million (up from under $25 million) to be an eligible investment for purposes of this credit. n/a 17