Federal Budget -> 2011 Budget
See the following on the Federal Budget 2011 and Department of Finance websites:
See also the Canada Revenue Agency questions and answers re provisions of the 2011 Budget.
All budget proposals are subject to legislative approval.
Personal Income Tax measures included in the Budget:
Beginning in 2011:
Personal Income Tax Changes
For all personal income tax measures see the Budget 2011 website Personal Income Tax Measures.
Basic personal amount, tax brackets
There were no new changes of amounts announced for these items. They were indexed for inflation in 2011. See our tables of non-refundable tax credits and the marginal tax rate tables for 2011 amounts and rates.
Income Tax Act proposed s. 118.06
The Budget proposes to to provide a non-refundable tax credit of 15% of $3,000, for volunteer firefighters who perform 200 hours or more of eligible volunteer firefighting services in the year for one or more fire departments. If requested, a written certificate from the fire chief or a delegated official of each fire department must be provided, attesting to the number of hours.
A firefighter who claims this credit will not be eligible for the existing tax exemption for the first $1,000 of income from being a volunteer firefighter.
Income Tax Act s. 118.2(1)
There is currently a cap of $10,000 on eligible expenses that can be claimed for other eligible dependents. The budget proposes to eliminate this cap, starting with the 2011 tax year.
Income Tax Act s. 118(4)(b)
Currently, only one individual per domestic establishment can claim the child tax credit. If two adult siblings share a home and both have children, only one can claim a child tax credit.
The budget proposes to change the legislation so that sharing a home does not prevent otherwise-eligible parents from claiming the child tax credit for their children. This will apply beginning in 2011.
It is proposed to amend the Tuition Tax Credit to recognize fees paid for examinations that are required to obtain a professional status recognized by federal or provincial statute, or to be licensed or certified in order to practice a profession in Canada.
Currently, courses taken outside Canada are only eligible for the tuition tax credit if the course is of a duration of at least 13 weeks. It is proposed to reduce this required duration to 3 weeks. It is also proposed to reduce the similar 13 week requirement for Educational Assistance Payments (EAP) from a Registered Education Savings Plan (RESP) to 3 weeks when the student is enrolled in a full-time course.
RESPs - asset sharing among siblings: The budget proposes to allow transfers between individual RESPs for siblings, without tax penalties and without triggering the repayment of CESGs, provided that the beneficiary of a plan receiving a transfer of assets had not attained 21 years of age when the plan was opened.
These measures would apply beginning in 2011.
Income Tax Act s. 120.4
The budget proposes to extend the tax on split income to capital gains realized by, or included in the income of, a minor from a disposition of shares of a corporation to a person who does not deal at arm's length with the minor, if taxable dividends on the shares would have been subject to the tax on split income (at the highest marginal tax rate). These capital gains would be treated as dividends and thus would not benefit from the lower capital gains inclusion rates, and would not qualify for the lifetime capital gains exemption.
This measure would apply to capital gains realized on or after March 22, 2011.
The budget proposes that for flow-through shares acquired by a taxpayer on or after March 22, 2011, the capital gains exemption on donations of publicly listed securities, if any of these shares are subsequently donated, will only be available to the extent that the capital gain exceeds a threshold amount (the "exemption threshold"). Generally, the threshold amount will be the original cost of the shares, but the threshold amount will be reduced by capital gains realized after March 22, 2011, on any shares of the same class.
Income Tax Act s. 146.4(1), proposed s. 146.4(1.1) to 146.4(1.4)
Allow RDSP beneficiaries with shortened life expectancies (five years or less) to make withdrawals without the requirement to repay the assistance holdback amount. A medical doctor must certify as to the life expectancy, and the holder of the plan can elect for the RDSP to become a specified disability savings plan.
There may be certain circumstances in which the assistance holdback amount may still have to be repaid, even with a shortened life expectancy.
This would take effect upon royal assent.
For all business tax measures see the Budget 2011 website Business Income Tax Measures.
Manufacturing and processing machinery and equipment (class 29)
Clean energy generation equipment (class 43.2)
The government announced the phase-out of quarterly allowances for political parties.
Guaranteed Income Supplement (GIS)
Excise Duties and Sales and Excise Taxes
Revised: September 20, 2017
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