News Article

Provinces deliver few tax changes

Posted: May 09, 2012

All the provinces and territories but one have delivered their budgets for the fiscal year ending March 31, 2013. Although their governments are focusing on deficit reduction (See Knowledge Bureau Report, April 18), many provinces have opted to leave personal taxes as they were. But there are always exceptions, as the following table shows.

Province
Tax changes announced in 2012 provincial budgets
British Columbia
  • First-time new homeowners bonus ó from Feb 12, 2012, to March 31, 2013, first-time home buyers who purchase newly built homes are eligible for a $10,000 refundable bonus.
  • Childrenís fitness tax credit ó this $500 provincial tax credit mirrors the federal childrenís fitness tax credit.
  • Childrenís arts tax credit ó likewise, this $500 provincial tax credit mirrors the federal childrenís arts tax credit.
  • Medical Expense Limit for Other Dependants ó the $10,000 limitation on medical expense is being eliminated.
  • Dividend Tax Credit ó the B.C. DTC rate for eligible dividends increased to 10% from 9.76% as of Jan. 1, 2012.
  • HST ó the province reverts to the GST/PST system as of April 1, 2013.
Alberta
No personal tax changes.
Saskatchewan
  • First-time home buyersí tax credit ó a $10,000 non-refundable tax credit for first-time home buyers mirrors the federal first-time home buyersí tax credit.
  • Active Families Tax Credit ó the age of eligibility for this credit is extended to children up to age 17. Age 14 was the previous cutoff.
  • Post-secondary tuition credit ó up to $500 a year for four years for post-secondary students.
Manitoba
  • The basic personal amount will increase $250 to $8,634 in the 2012 tax year.
  • The dividend tax credit for eligible dividends will decrease to 8% from 11%.
  • After 2012, the Co-op Education & Apprenticeship Tax Credit will be expanded for apprentices and journey people outside of Winnipeg.
Ontario
  • Ontario Healthy Homes Renovation Tax Credit. Originally announced in the 2011 budget, this credit was not passed for the 2011 tax year. For the 2012 tax year, expenses from Oct. 1, 2011, to Dec. 31, 2012, will be eligible. The credit is only available to seniors and taxpayers who share a home with a senior. The refundable credit is 15% of the eligible expenditures up to a maximum credit of $1,500 ($10,000 eligible expenditures). Eligible expenditures are those that improve accessibility or help a senior be more functional or mobile in the home.
  • Ontario Child Benefit's maximum benefit will increase to $1,210 from $1,100 starting July 2013 and to $1,310 come July 2014.
  • Ontario Clean Energy Benefit will be capped at 3,000 kWh a month beginning Sept. 1, 2012.
  • Ontario Trillium Benefit combines the Ontario Sales Tax Credit, the Ontario Energy and Property Tax Credit and the Northern Ontario Energy Credit into one monthly payment. The budget promises to consider giving taxpayers the choice of receiving an annual lump sum vs. monthly payments.
  • Budget debate resulted the government introducing a 2% surtax to taxpayers with taxable incomes over $500,000. (See Knowledge Bureau Report, May 2)
Quebec
No new income tax changes for 2012.
New Brunswick
No new personal tax changes for 2012.
Nova Scotia
  • The amount for spouse or common-law partner as well as the amount for eligible dependants increased to $8,481 from $7,201 as of Jan. 1, 2012.
  • The disability amount was raised to $7,341 from $5,035 as of Jan. 1, 2012.
  • The Nova Scotia Child Benefit will increase by 5% effective July 1, 2012. The Nova Scotia Affordable Living refundable tax credit will increase to $255 an adult plus $60 a child effective July 1, 2012.
  • The Poverty Reduction refundable tax credit will increase to $250 a year effective July 1, 2012.
Prince Edward Island
  • PEI will introduce a 14% HST on April 1, 2013. An enhanced refundable tax credit will be announced for low-income families.
  • A refundable tax credit of $500 will be available for 2012 for volunteer firefighters with at least 200 hours of volunteer service.
Newfoundland & Labrador
No new income tax changes for 2012.
Yukon
No new income tax changes for 2012.
Northwest Territories
2012 Budget has not been delivered.
Nunavut
No new income tax changes for 2012.

Walter Harder is the co-author of several income tax courses for The Knowledge Bureau including Introduction to Personal Tax Preparation Services, Advanced Tax Preparation and Research, Tax Preparation for Proprietorships, Tax Strategies for Financial Advisors, and Death of a Taxpayer.