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2015 Federal Budget

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Federal Budget -> 2015 Budget

Federal 2015 Budget / Economic Action Plan - April 21, 2015

See the following on the 2015 Federal Budget, Department of Finance and Parliament websites:

bulletEconomic Action Plan 2015 - News Release
bulletTax Measures Supplementary Information
bulletNotice of Ways and Means Motion April 21, 2015
bulletBill C-59 An Act to implement certain provisions of the budget tabled in Parliament on April 21, 2015 and other measures.  May 7, 2015
bulletRoyal Assent June 23, 2015
bulletDraft legislative proposals released for consultation purposes July 31, 2015

Not all budget measures are included below.  See the Federal Budget website for complete information.

Foreign Asset Reporting - Streamlining Reporting Requirements

A simplified form for 2015 and later taxation years is being developed for taxpayers for whom the total cost of specified foreign property is less than $250,000 throughout the year.

Lowering EI Premium Rate in 2017

In 2017, the previously-announced seven-year break-even EI premium rate-setting mechanism will be implemented. which is expected to reduce the EI premium rate from $1.88 in 2016 to approximately $1.49 in 2017.

Extending Compassionate Care Benefits

The Budget proposes to extend the duration of Compassionate Care Benefits from the current 6 weeks to 6 months, as of January 2016.  Compassionate Care Benefits, through the Employment Insurance program, provide financial support to people who have to be away from work temporarily to care for a family member who is gravely ill with a significant risk of death.

See Extending Compassionate Care Benefits on the Budget 2015 website.

Personal Income Tax Measures

Tax Free Savings Account Contributions

The Budget increased the annual limit to $10,000 for the 2015 and subsequent taxation years, with no further increases for inflation.

Home Accessibility Tax Credit

This non-refundable credit will be 15% of up to $10,000 of eligible expenses per year, per qualifying individual, to a maximum of $10,000 per eligible dwelling.  This tax credit will be available for expenditures made after 2015.

See Home Accessibility Tax Credit on the 2015 Budget website.

Registered Retirement Income Fund Withdrawal Rates

The 2015 Federal Budget reduced the RRIF withdrawal factors for both pre-1993 and post-1992 RRIFs.  All RRIFs, LIFS and LRIFs now use the same factors, regardless of the year in which the plan was started.

Lifetime Capital Gains Exemption (LCGE) for Qualified Farm or Fishing Property

The LCGE for qualified farm and fishing property dispositions on or after April 21, 2015 is increased to a maximum of $1 million.

Transfer of Education Credits - Effect on the Family Tax Cut

The Budget proposes to revise the calculation of the Family Tax Cut for the 2014 and subsequent taxation years so that the transfer of education-related credits between spouses will not reduce the Family Tax Cut tax credit.

Donations of Private Corporation Shares and Real Estate

Dispositions of certain private corporation shares and real estate occurring after 2016 will be exempt from capital gains tax when the proceeds are donated to a qualified donee.  This measure was not included in Bill C-59.  The 2016 Federal budget 

Business Income Tax Measures

The Budget revises the Small Business Tax Rate and the non-eligible dividend tax credit starting in 2016, as follows:

  2015 2016 2017 2018 2019+
Small business tax rate 11% 10.5% 10% 9.5% 9%
Non-eligible dividend gross-up  18% 17% 17% 16% 15%
Non-eligible dividend tax credit 11.017% 10.5% 10% 9.5% 9%

Remittance Thresholds for Employer Source Deductions

The budget proposes to reduce the frequency of remittance of source deductions for the smallest new employers, by allowing eligible employers to immediately remit on a quarterly basis.  Eligible employers will be new employers with withholdings of less than $1,000 for each month.

See Quarterly Remitter Category for New Employers on the 2015 Budget website.

Synthetic Equity Arrangements

Budget 2015 proposes to modify the dividend rental arrangement rules to deny the inter-corporate dividend deduction on dividends received by a taxpayer on a Canadian share in respect of which there is a synthetic equity arrangement.

See Synthetic Equity Arrangements on the 2015 Budget website.

Manufacturing & Processing Machinery & Equipment Accelerated Capital Cost Allowance (CCA)

Budget 2015 provides a CCA rate of 50% on a declining-balance basis for machinery & equipment acquired after 2015 and before 2026 primarily for use in Canada for the manufacturing and processing of goods for sale or lease.  Eligible assets are those that are currently in Class 29 with a temporary 50% CCA rate, and the new CCA Class will be Class 53.  The half-year rule will apply to Class 53.

Eligible assets acquired in 2026 and later years will be in Class 43 with a 30% declining-balance rate.

See Accelerated CCA on the 2015 Budget website.

Consultation on Active versus Investment Business re the Small Business Deduction

Active business income, which is eligible for the small business deduction, does not include income from a "specified investment business".  A specified investment business usually has the purpose of earning income from property.  However, a specified investment business does not include a business with more than 5 full-time employees, which results in the small business deduction being available even though the principal purpose is to derive income from property.

The Government would like interested parties to submit comments by August 31, 2015.  See Small Business Deduction Consultation on the 2015 Budget website.

International Income Tax Measures

bulletWithholding for Non-Resident Employers
bulletStreamlining Reporting Requirements for Foreign Assets
bulletCaptive Insurance
bulletUpdate on Tax Planning by Multinational Enterprises
bulletUpdate on Automatic Exchange of Information for Tax Purposes

Other Measures

bulletAboriginal Tax Policy
bulletPreviously Announced Measures

The above measures are not a complete list of all measures proposed by the 2015 Budget.  Please see the 2015 Federal Budget website for complete information.

Revised: March 30, 2016

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