Claiming Medical Expenses: Free Healthcare?

Free Health Care? Did you know that Canadians spend on average more than $1,000 on medical expenses each year? It’s estimated that government programs, via our taxes, cover about 72% of medical expenses, which means that we pay for the rest. Your clients may be over-paying on their taxes because they don’t know about medical expense deductions. 

The federal government's Economic Action Plan 2012 will change Canada's retirement system in significant ways. Here is what's ahead: The proposed changes: The age of eligibility for Old Age Security (OAS) and Guaranteed Income Supplements (GIS) will be gradually increased to 67 from 65, starting in April 2023, with full implementation by January 2029. An 11-year notification period, followed by a six-year phase-in period, is being provided to ensure that individuals have sufficient advance notification to plan their retirements and make adjustments. This proposed legislative change to the age of OAS/GIS eligibility will not affect anyone who is 54 years of age or older as of March 31, 2012 (that is, those born on March 31, 1958, or earlier). Those who were born on or after Feb. 1, 1962, will be eligible for OAS at 67. Those born between April 1, 1958, and Jan. 31, 1962, will have an age of eligibility between 65 and 67. Someone born in April 1960 ó one year and one month after the minimum eligibility age of March 31, 1958 ó will be eligible for OAS/GIS at age 66 and one month ó one year and one month later than the age 65 start date in place today. In line with the increase in age of OAS/GIS eligibility, the ages at which the Allowance and the Allowance for the Survivor are provided will also gradually increase from 60 and 64 today to 62 and 66 starting in April 2023. This change will not affect anyone who is 49 years of age or older as of March 31, 2012. The government will ensure that certain federal programs, including those provided by Veterans Affairs Canada and Aboriginal Affairs and Northern Development Canada that provide income-support benefits until age 65, are aligned with changes to the OAS program. The government will discuss the impact of the OAS changes on Canada Pension Plan (CPP) disability and survivor benefits with provinces and territories, who are joint stewards of the CPP, in the course of the next triennial review. To improve flexibility and choice in the OAS program, starting on July 1, 2013, the government will allow for the voluntary deferral of the OAS pension for up to five years, allowing Canadians the option of deferring take-up of their OAS pension to a later time and receiving a higher, actuarially adjusted, annual pension. GIS benefits, which provide additional support to the lowest-income seniors, will not be eligible for actuarial adjustment. The government will improve services for seniors by putting in place a proactive enrolment regime that will eliminate the need for many seniors to apply for OAS and GIS. This measure will reduce the burden on seniors of completing application processes and will reduce the government's administrative costs. Proactive enrolment will be phased-in from 2013 to 2015. On Nov. 17, 2011, the federal government introduced the Pooled Registered Pension Plans (PRPPs) Act. PRPPs will provide a new, accessible, large-scale and low-cost pension option to employers, employees and the self-employed. The PRPP Act will apply to employees in industries that are federally regulated. It will also apply to individuals employed in the Yukon, Northwest Territories and Nunavut. Provinces must introduce enabling legislation in their own jurisdictions to make PRPPs available throughout Canada. Where do we go from here? If you wish to make up this difference through self-funding, the good news is that the tools to make this happen in an efficient manner are already available: i) increase your RRSP contributions by $100 a month over the next 10 years;ii) put your RRSP refund back into your RRSP;iii) put your RRSP refund into a TaxFree Savings Account (TFSA)iv) review your household expenditures and reduce your monthly expenses in retirement by a few hundred dollars. By deferring OAS to age 67, the only loss is the additional income you would have received under the old rules for a two-year period. In today's dollars, this is equivalent to $400 to $800 a month of spendable, after-tax income, or a total of about $14,400. Considering that most Canadians will require additional savings in their pension plans and RRSP accounts of many hundreds of thousands of dollars, this small amount of money for a two-year period of time is easily recoverable. What's the best change to the retirement system in the budget? One of the most exciting changes occurring at this time is the launch of PRPP. One of the great hopes of this plan will be a lower-cost, stable pension structure for the vast majority of Canadians. Over their lifetime, many Canadians will pay hundreds of thousands of dollars in investment-management fees. While it is obvious that fees for investment products can never be zero, a reduction of 15% to 25% can add many thousands of dollars to income each and every year of retirement. Lowering fees to 1.5% of the value of the portfolio from 2.5% can provide as much as $10,000 of additional income each year of retirement. Over 20 years of retirement, this adds up $200,000. This will be far more beneficial to Canadians than a mere deferral of OAS benefits to an aging population. Douglas Nelson, B.Comm. (hons.), CFP, CLU, MFA, CIM, is an independent financial advisor in Winnipeg and the author of Master Your Retirement: How to fulfill your dreams with peace of mind.   Additional Educational Resources: Elements of Real Wealth Management, Tax Efficient Retirement Income Planning and Tax Strategies for Financial Advisors.  

Corporations, for the most part, were left alone in the 2012 Federal Budget with only some tinkering and fine-tuning applied.   Capital Cost Allowance In 1994, the federal government added class 43.1 (30% declining) to Schedule II of the Income Tax Regulations in order to allow for the depreciation of clean energy and conservation equipment. This was enhanced in 2005 with class 43.2 (50% straight line) for the same equipment that met a higher standard of efficiency.   Today, the budget adds to Schedule II: Waste-fuelled thermal energy equipment,  Equipment of a district energy system that uses thermal energy provided by eligible waste-fuelled thermal energy equipment, Equipment used to distribute thermal energy primarily generated through waste-fuelled thermal energy equipment, Equipment that uses the residual of plants to produce electricity and heat. In addition, the restriction requiring thermal energy equipment be used in generating heat in an industrial process or greenhouse has been eliminated. This opens waste-fuelled equipment as an alternative to heating oil or to hot water. In the past, costs incurred to create and develop these systems had to be added to the capital cost of the equipment. Today's budget removes this restriction and intangible project start-up costs will now be fully expensed or, alternatively, passed on to investors using follow-through shares. Finally, in order to qualify for the accelerated depreciation of these classes, the equipment must meet the environmental laws and regulations governing the equipment.   Phased-Out Tax Credits Mineral Exploration and Development Tax Credit Budget 2012 will eliminate the current corporate 10% tax credit available for pre-production mining expenditures. The credit will remain in place for 2012, reduce to 5% for 2013 and disappear entirely in 2013. Pre-production development expenses will also be phased out, dropping to 7% in 2014, 4% in 2015 and be eliminated in 2016. Agreements in place as of March 29, 2012, will be applied at the 10% tax credit rate until Dec. 31, 2015. Atlantic Investment Tax Credit (AITC) The AITC currently offers a 10% tax credit for qualifying acquisitions of new buildings and machinery and equipment primarily used in farming, fishing, logging, mining, oil and gas, and manufacturing in the Atlantic provinces. The current rate of 10% will remain until 2014, drop to 5% in 2015 and be eliminated entirely as of Jan. 1, 2016, on qualifying equipment purchased before March 29, 2012.   Scientific Research and Experimental Development Investment tax credits are available to Canadian corporations to assist in the cost of qualifying expenditures incurred to innovate and create economic opportunities for Canadian corporations. Qualifying expenditures are eligible for an Investment Tax Credit of 20%. The credit is further enhanced for Canadian-controlled private corporations (CCPCs) to 35% up to $3 million. Effective Jan. 1, 2013 this credit will be reduced to 15% from 20% and will be pro-rated for yearends that straddle the Jan. 1, 2013 date. The SR&D tax credit for CCPCs remains unchanged at 35% of the first $3 million. Certain changes and limitations have also been made to the types of items that qualify as expenditures; as well, the amount of wages that can be included has been reduced. The qualified expenditure pool will be reduced to 60% of eligible expenditure from 65% in 2013, and to 55% in 2014. Corporate partnerships tax avoidance Budget 2012 addresses sections 88 and 100 of the Income Tax Act that deal with the General Anti-Avoidance Rules (GAR). Essentially, the budget strengthens rules against liquidating partnerships and increasing the asset value of income-producing assets and the sale to offshore or tax-exempt entities.   Alan Rowell, Distinguished Financial AdvisorñTax Services Specialist, is president of The Accounting Place in Stoney Creek, Ont.   Additional Educational Resources: Introduction to Corporate Tax Preparation and Tax Strategies for Financial Advisors.  

The federal government's Economic Action Plan 2012 is squarely onside to eliminate the deficit by fiscal year 2014-15 ó without introducing draconian budget cuts or new taxes. In fact, Finance Minister Jim Flaherty's budget "remains focused on an agenda that will deliver high-quality jobs, economic growth and sound public finances.î The deficit ó $24.9 billion for 2011-12 ó will decline by steps over the five years reaching a surplus of $3.4 billion in 2015-16 and $7.8 billion in 2016-17. By that point, federal debt as a percentage of gross domestic product (GDP) will drop to 28.5% ó down from 33.9% in 2010-11 and in line with pre-recession levels. Another telling indicator, program expenses as a share of GDP, will likewise decline to pre-recession levels, hitting 12.7% by 2016-17 from 14.7% in 2010ñ11. As has been the habit for the past two decades, the feds have based the budget on the input of private sector economists. The March consultation with economists produced growth in real GDP of 2.1% in 2012 and 2.4% in 2013. But as those economists were quick to point out, those projections are not without downside risks. As a result, the government has adjusted the private sector forecast for nominal GDP downward by $20 billion a year over the 2012ñ2016 period. This adjustment for risk, says the federal budget, represents a $3-billion adjustment in fiscal revenues in each year of the forecast. The budget outlines revenues of $248 billion in 2011-12, a 4.6% increase based on year-to-date results and economic projections. Over the remainder of the forecast horizon until 2016-17, revenues are projected to grow at an average annual rate of 4.7%. Personal income taxes ó the largest component of budgetary revenues ó will increase by $7.4 billion or 6.5% to $120.9 billion in 2011ñ12. Over the remainder of the projection period, average annual growth is expected to be 5.4%. Corporate income tax revenues are projected to increase by 8.8% to $32.6 billion in 2011ñ12 and by 4.1% annually until 2016-17. Program spending, coming in at $241.9 billion in this fiscal year, will increase gradually to $268.6 billion in 2016-17. Under the heading of transfers to persons comes elderly benefits, one of the largest government expenses. Comprised of Old Age Security, Guaranteed Income Supplement and Spousal Allowance payments to qualifying seniors, elderly benefits are projected to grow to $50.1 billion over the planning period from $38.1 billion, or about 5.6% a year. This increase, says the budget, is due to consumer price inflation, because benefits are fully indexed, and a projected increase in the seniors' population to 6.0 million from 4.8 million over the time frame. Major transfers to other levels of government include the Canada Health Transfer (CHT) with a 6% annual escalator and Canada Social Transfer with a 3%-a-year escalator. Budget measures to support jobs and growth will cost $3.6 billion over the next five years. But, at the same time, the budget will reduce departmental spending by $20.1 billion between 2011ñ12 and 2016ñ17 after taking into account workforce adjustment costs. Overall, on a net basis, say the feds, budget measures will reduce spending by $20.8 billion in the current fiscal year and the next five years.   Additional Educational Resources: Debt and Cash Flow Management and Financial Recovery in a Fragile World.  

Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) Age eligibility for the OAS and GIS programs increases to age 67 from age 65 beginning in 2023 and concluding in 2029. The eligibility for the (spouse's) Allowance and the Allowance for Survivors will also increase to age 62 from age 60 in the same time period. Option to defer OAS Beginning on July 1, 2013, seniors will have the option to defer receiving their OAS pension for up to five years, in a manner similar to the deferral of Canada Pension Plan (CPP) benefits. Those who begin to receive their pensions later will receive a proportionately larger pension. Medical expenses Budget 2012 will add blood coagulation monitors for use by individuals who require anti-coagulation therapy ó including associated disposable peripherals such as pricking devices, lancets and test strips ó to the list of expenses eligible for the Medical Expense Tax Credit in 2012 and subsequent years. The devices must be prescribed by a medical practitioner. Registered Disability Savings Plans (RDSPs) Family members as plan holder Under the current rules, many adults with disabilities have had difficulty establishing plans because their legal capacity to enter into a contract is doubtful. Provincial law requires that, to open an RDSP, the individual must be declared legally incompetent and a legal guardian named. Budget 2012 will allow, on a temporary basis, certain family members (spouse or common-law partner or parent) to become the plan holder of the RDSP for an adult individual who might not be able to enter into a contract. This measure will ensure that individuals may still benefit from RDSPs. In the meantime, the provinces and territories are expected to make more accommodating provisions. Where the disabled individual is found not to be contractually competent, a legal representative of the disabled individual may replace the family member as the plan holder. This measure will become effective upon Royal Assent and will be in effect until Dec. 31, 2016. Repayment of grants and bonds For withdrawals from RDSPs after 2013, the "10-year Replacement Rule" will be replaced with a "Proportional Repayment Rule." Under the old rule, if any amount is withdrawn from a RDSP, any Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) amounts received in the past 10 years must be repaid (except for SDSPs). Under the new rule, the repayment amount will be the lesser of the amount removed times three, and the amount of the CDSG and CDSB amounts received in the past 10 years. Example: Proportional Repayment Rule vs 10-year Replacement Rule Issue: Arthur is the beneficiary of an RDSP. In the period 2008 to 2013, CDSG and CDSB contributions totalled $21,000. In 2014, he withdraws $1,000 from his RDSP. How much does he have to repay? Answer: Under the 10-year Replacement Rule, he would have to repay the full $21,000 government assistance contributed. Under the Proportional Replacement Rule, he will have to repay $1,000 x 3 = $3,000 of government assistance. Maximum annual limits for withdrawals For withdrawals made after 2013, the maximum Lifetime Disability Assistance Payment (LDAP) will be increased to no less than 10% of the fair market value of the assets in the plan at the beginning of the year. Where the maximum amount under the existing LDAP formula exceeds 10% of the asset value, then the maximum is the amount determined under the LDAP formula. Rollovers of Registered Education Savings Plans (RESPs) Beginning in 2014, the current RESP rollover provisions to RRSPs will be extended to RDSPs. RESP investments, after Canada Education Savings Grants and Canada Education Savings Bonds have been repaid, may be rolled into an RDSP, so long as the plan holder has sufficient RDSP contribution room. These contributions will not generate CDSB or CDSGs. Withdrawals of rolled-over RESPs will be taxable. Termination of RDSPs when a beneficiary is no longer disabled When an RDSP beneficiary ceases to qualify for the Disability Amount, currently the RDSP must be terminated immediately. Beginning in 2014, when this happens, the beneficiary may make an election to continue the plan for up to four calendar years after the end of the calendar year in which the beneficiary ceases to be eligible for the Disability Amount. During the election period: No contributions will be permitted. No new CDSBs or CDSGs will be paid into the plan. Withdrawals will be permitted subject to the new Proportional Repayment Rule. Current RDSPs which would be required to be terminated before 2014 will not be required to be terminated until the end of 2014. Mineral Exploration Tax Credit The Mineral Exploration Tax Credit will be extended for one more year for flow-through agreements entered into before March 31, 2013. With the "look-back rule," this means that the credits extend to agreements up to March 31, 2014. Eligible and other than eligible dividends For taxable dividends paid after March 28, 2012, the government will allow the payer of a dividend to designate what portion of that dividend is eligible and what portion is not for up to three years after the dividend is paid (a late designation). Example: Reclassification of Dividends Issue: In 2012, Harvey's corporation earned $550,000. At the end of the fiscal year (July 2012), the corporation issued a $100,000 dividend to Harvey as an other than eligible dividend as was done in prior years. In 2013, Harvey discovered that $50,000 of the dividends could have been eligible dividends because the corporation paid taxes on $50,000 at the higher tax rate. What can be done? Answer: under the new rule, the corporation may make a late designation to designate $50,000 of the dividends as eligible. Group Sickness and Accident Insurance Plans Employer contributions made to a plan after March 28, 2012, that relate to coverage after 2012 and are not in respect of a wage-loss replacement benefit payable on a periodic basis (i.e. the benefits will not be taxable to the employee) will be a taxable benefit. Such contributions made in 2012 will be included in income in 2013. Retirement Compensation Arrangements (RCAs) New prohibited investment and advantage rules will apply to RCAs that have a beneficiary who has a significant interest in the employer (a "specified beneficiary"). These rules parallel the rules for TFSAs. Prohibited investment rules Beginning March 29, 2012, the custodian of an RCA will be liable for a 50% tax on the fair market value of any prohibited investments in the RCA. The tax may be refunded if the prohibited investment is disposed of by the end of the year following the year in which it was acquired. Advantage rules A special tax equal to 100% of the fair market value of any RCA advantage will be payable in respect of any advantage extended, received or receivable after March 29, 2012. The definition of an advantage for an RCA will be adapted from the advantage rules from RRSPs. Advantages occurring before March 30, 2012, will not be subject to the tax if the amount of the advantage is included in income of the "specified beneficiary." RCA tax refunds Refunds of RCA taxes on contributions made after March 28, 2012, will not be refunded if the RCA property declines in value unless the decline cannot be reasonably attributed to prohibited investments or advantages. Employee profit-sharing plans (EPSPs) A special tax at the top marginal rate of the "specified employee" will be assessed for contributions to an employee profit-sharing plan for a "specified employee" to the extent that the contribution exceeds 20% of the employee's salary received that year. A "specified employee" is an employee who has a significant equity interest in the employer or does not deal at arm's length with the employer. This measure will apply to EPSP contributions made by an employer on or after Budget Day, other than contributions made before 2013 pursuant to a legally binding obligation arising under a written agreement or arrangement entered into before Budget Day. Where this tax is applied, a deduction will be allowed for the excess EPSP contribution so that it is not taxed twice. Life insurance policy exemption test The criteria for determining if a life insurance policy is an exempt policy will change for policies issued after 2013. The government has made several technical proposals and will consult with key stakeholders on these proposed changes over the coming months. Gifts to foreign charitable organizations For gifts to foreign charitable organizations to be eligible for the donation tax credit, the organization must be a "qualified donee." Currently, the Canadian government must donate to these organizations for them to qualify. Beginning in 2013, foreign organizations that pursue activities: related to disaster relief or urgent humanitarian aid, or in the national interest of Canada may apply to receive "qualified donee" status, even if they do not receive a donation from the government of Canada. Canada Revenue Agency will develop guidelines for granting such status. Travellers' exemptions Beginning June 1, 2012, the tariff exemption for goods brought into Canada will increase to $200 from $50 for travellers who are out of Canada for 24 hours or more, and to $800 for travellers who are out of Canada for 48 hours or more.   Additional Educational Resources: Introduction toPersonal Tax Preparation Services, Essential Tax Facts 2012 Edition and EverGreen Explanitory Notes.  

The repercussions of Ontario's March 27 budget will be felt across Canada ó especially among the corporations that bear the brunt of the changes. Consumers and employees, too, will feel the squeeze as, thanks to the "trickle downî effect, corporations pass on the additional cash drains through cost-cutting, reduced employment and price increases. Ontario is no longer the manufacturing giant it once was; it is now a service-based economy. At the head of the pack is the financial services industry. Toronto is one of the 10 largest financial centres in the world and handles 70% of Canada's financial services. As a result of Ontario's budget, this large corporate segment will pay 13% more taxes ó affecting consumers and employees nation-wide. Ontario's public service will also feel the impact of what can only be termed an "austerityî budget, as the Ontario government attempts to balance its budget by 2017-2018 "by finding savings and curtailing planned spending.î To reduce wage costs, Ontario plans to impose a two-year wage freeze on 1.2 million government employees. It intends to do this through negotiation and the collective-bargaining process. But the provincial government has indicated it will introduce legislation to force the freeze if the public-service unions disagree. This is all going to happen without the government increasing taxes. Apparently "not increasing taxesî does not include eliminating previously announced tax cuts and increasing fees.ï Taxation Corporations expecting to take advantage of long-promised reductions in the general corporate tax rate will have to wait a little longer, at least until there is a balanced budget. The general tax rate for corporations ó which was scheduled to drop by 0.5% on July 1, 2012, and an additional 1% on July 1, 2013 ó is frozen at 11.5%. This 1.5% cut to the corporate tax rate represents a 13% increase in funds no longer available for investment. This will ultimately filter through, increasing costs and pricing as well as decreasing employment. The removal of the tax reduction, however, does not affect manufacturing and processing or small business which currently have provincial tax rates of 10% and 4.5%, respectively. Also frozen at its current level is the Business Education Tax (BET), a component of commercial property taxes. Ontario's phased-in cuts to BET, which started in 2007, will halt until Ontario reaches a balanced budget. Neither of these freezes sound like a big deal on the surface, but for a province that is in financial difficulty to hobble the commercial engine that drives employment and the economy sounds a little counterproductive. The proposed Healthy Homes Renovation Tax Credit designed to provide a 15% non-refundable tax credit on expenditures "that improve accessibility or help seniors with their mobility at homeî will remain. Even though this legislation has not yet been passed, the qualifying period began October 1, 2011, and expires December 31, 2012, to be claimed on the 2012 personal tax return. Although this program is currently in place and active, it is important to note that this legislation has not been passed and it does form part of the budget. It may ultimately be defeated. In another move, as of March 27, the Ontario government has taken back the determination process regarding employee-employer relationships for the purpose of assessing taxes under the Employer Health Tax from the Canada Revenue Agency (CRA). While CRA rulings will remain, Ontario is no longer bound by the rulings for the purpose of the Employer Health Tax. Retail Sales Tax (RST) was harmonized with the GST/HST on July 1, 2010. Ontario taxpayers have had the ability to apply for RST rebates and refunds until June 30, 2014. This period has been shortened; the deadline is now Dec. 31, 2012. Administratively, the Ontario government plans to amend various statutes to enhance its ability to collect tax revenue, including the garnishment of monies to be loaned or advanced to taxpayers. Research & Development tax credits, the Apprenticeship Training Tax Credit and Tobacco Tax Enforcement are also under review but the budget gave no details on what changes, if any, will be implemented. Collectively, the tax measures proposed in Tuesday's budget should increase Ontario's revenue by $325 million in 2012-2013, $1.04 billion in 2013-2014 and $1.675 billion in 2014-2015.ï Pension Systems Public-sector defined-benefit pension plans also came under the gun as the Ontario government targeted unfunded liabilities. Ontario is proposing legislative changes within the following parameters: In case of a deficit, a plan will be required to reduce future benefits or ancillary benefits before increasing employer contributions. In exceptional circumstances, a limit will be set on the amount or value of benefit reductions before additional contribution increases can be considered. Any benefit reductions will involve future benefits only, not those already accrued. Current retirees will not be affected. If employee contributions are currently less than employer contributions, increased employee contributions can be employed to reduce pension deficits. When plan sponsors cannot agree on benefit reductions through negotiation, a new third-party dispute resolution process will be invoked; the framework will be reviewed after the budget is balanced. Alan Rowell, Distinguished Financial AdvisorñTax Services Specialist, is president of The Accounting Place in Stoney Creek, Ont.   Additional Educational Resources: Esstential Tax Facts 2012 Edition and Introduction to Personal Tax Preparation Services.  

With every federal budget, we anticipate the continued reform of personal and corporate tax systems. The March 29 budget is no different. If the age of eligibility for Old Age Security (OAS) is pushed back, Thursday's budget could be both historically significant and hugely unpopular (or so indicates Knowledge Bureau's polling). You will do well to pay close attention to this budget and project its effects onto your retirement and estate plan. In the aftermath of the global financial crisis, governments are forced to rein in spending and reduce deficits. So, you should be prepared for possible tax increases ó such as social benefit clawbacks, increased user fees or changes to our taxing framework, which is based on another significant tax reform introduced in 1969. Canada's then-minister of finance, the Hon. E. J. Benson, not only proposed increases to personal and corporate taxes but also, most significantly, brought capital gains into taxable income. His reasons were interesting in the context of today's choices. "The needs of the federal and provincial governments for money to do useful and important things are so great,î he began his proposed reforms, "that we cannot now afford to reduce the over-all revenues from personal and corporate income taxes.î Over time, inclusion of net capital gains in taxpayers' income has added extensively to government coffers. In the first year ó the reforms took effect Jan. 1, 1972 ó it was estimated that single provision generated net government revenue of $60 million; by its fifth year of existence, it produced $245 million. Those were large sums for the times. But Benson did something else: he recognized the punitive effect of including in income "irregularî sources of income that would push taxpayers into a higher tax bracket and cause taxes to be paid at a higher tax rate that year than in a normal year. The "General Income-Averaging Optionî ó which averaged out income and taxes payable over five years ó was introduced to help taxpayers avoid tax-rate spikes. Unfortunately, that provision was abolished years ago. Benson's reforms were effective in their mission. They redistributed the income-tax burden and increased government revenue from personal and corporate taxes. The burden, however, landed squarely on the large, baby-boomer taxpayer base that was just graduating from university and beginning its work life. Yet, despite high tax rates on both income and capital, boomers were incented to work in this country, rather than leave for more competitive tax jurisdictions. Most attempted to save for retirement, despite high taxation in the 1990s (which was needed to reduce previous governments' deficits and debt) and the debilitating effects of the recent global crisis. Retiring boomers now need to count on what's left of their private savings, the Canada Pension Plan and the OAS to make it in a very different world. Unfortunately, heavily indebted federal and provincial governments once again face great needs to do important things. The federal government will have to make significant choices come Thursday's budget. So may you, too. In fact, engaging with well-informed tax and financial advisors to mitigate any losses with sound tax and financial planning is a good first line of defense.   It's Your Money. Your Life. The degree to which the March 29, 2012, federal budget changes your tax burden will be of special interest. To find out what it means to you and your savings, please join the Knowledge Bureau Report team at http://www.knowledgebureau.com/ for our Special Budget Report. We'll be there to help you decipher Budget 2012. Evelyn Jacks, president of Knowledge Bureau, is author of Essential Tax Facts 2012 and co-author of Financial Recovery in a Fragile World. To purchase your books, visit www.knowledgebureau.com/Books.asp. Follow on Evelyn on Twitter @evelynjacks