Confirmed:  The CCR for Small Business is Tax Free

Ottawa has confirmed that the CCR for Small Business received by eligible Canadian-controlled private corporations (CCPCs) will be tax free for the 2019-20 to 2023-24 fuel charge years, as will the final payment for the 2024-2025 fuel charge year.  Draft legislation was released on June 30, 2025 with this announcement; and will be introduced for law making in Parliament this Fall.   Some of the more significant details are discussed below.

Finance Minister Jim Flaherty tabled the Federal Budget on June 6, 2011 with very few changes from the one tabled on March 22.  The major difference between the two budgets is the dates when each provision will take place.  For the most part, items that were to become effective on "budget day" became effective on March 22.  The following is a list of the tax provisions that will now be effective retroactive to the original budget date.  For details of each provision, see the following article. RRSP Non-Qualifying Investments - the new penalties for non-qualifying investments will be effective for investments acquired after March 22, 2011 and also apply to income earned on non-qualifying investments after March 22, 2100. Past Service IPP Contributions - the new requirements for IPP Past Service contributions will apply to contributions made after March 22, 2011. Tax on Split Income - the treatment on capital gains as split income will apply to capital gains realized on or after March 22, 2011. Returned Gifts - the requirement that a qualified donee issue a revised receipt to the donor (and send a copy to the CRA) applies to gifts or property returned on or after March 22, 2011. Gift of Non-Qualifying Securities - the delay in the recognition of gifts of non-qualifying securities applies to securities disposed of by donees on or after March 22, 2011. Granting of Options to Qualified Donees - the delay in the recognition of the donation of an option to a qualified donnee until the option is exercised applies to options granted on or after March 22, 2011. Donations of Flow-Through Shares - the change to the zero-inclusion rate on the donation of flow-though shares applies to flow-through shares acquired on or after March 22, 2011. Accelerated CCA on Clean Energy Generation Equipment - the accelerated rate applies to assets acquired on or after March 22, 2011. Oil Sand Properties - the treatment of oil sand leases and other oil sand resource property as Canadian Oil and Gas Property Expense (CODPE) applies to acquisitions made on or after March 22, 2011. Redemption of Shares - new stop-loss rules apply to share redemptions on or after March 22, 2011. Limit of Deferral of Corporate Income Earned Through a Partnership - the new limits apply to taxation years of a corporation that end on or after March 22, 2011.    

The Speech from the Throne opened the 41st Parliament of Canada on June 3, 2011. In the address, the government described a fragile global economy that poses risks to recovery from the recent economic downturn. In Canada, the aging workforce is of concern, affecting productivity and straining pensions and the healthcare system. At the same time, the need to return to a balanced budget is going to require a review of government spending, as keeping taxes low and maintaining transfers to provinces and individuals is a priority of the government. Some other goals highlighted in the Speech from the Throne include: To negotiate a free trade agreement with the European Union by 2012 and with India by 2013 To establish a new, national securities regulator To implement Pooled Retirement Pension Plans To end the long gun registry To ensure that people living on reserve have the same matrimonial real property rights and protections as other Canadians To give access to clean water and clean energy technology to Aboriginal and northern communities To work with the U.S. on the Shared Vision for Perimeter Security and Economic Competitiveness To establish a new Office of Religious Freedom To introduce measures to combat marriage fraud and human smuggling To create new protected areas for our national parks and to develop a National Conservation Plan To support the Lower Churchill hydroelectricity project in Atlantic Canada. To reintroduce comprehensive law-and-order legislation to combat crime and terrorism and to reintroduce legislation to clarify and strengthen laws on self-defence, protection of property and citizen's arrest To introduce legislation to ensure that wheat and barley can be sold on the open market To limit Senate term lengths and to encourage provinces and territories to elect Senate nominees To eliminate the per vote subsidy for political parties To reach an agreement on tax harmonization with Quebec no later than September 15, 2011 To maintain the six percent escalator for the Canada Health Transfer The 2011 Budget, first introduced on March 22, 2011, will have details of these and other measures when it is tabled on June 6th. ADDITIONAL EDUCATIONAL RESOURCES: Distinguished FInancial Advisor and Master Financial Advisor Designations

On May 31st, Minister of Finance Jim Flaherty met with 15 Canadian private sector economists to gather opinion on the economic future of our country. This is in order to make sure that the measures presented in the upcoming Federal budget are in line with expectations for the future. Mr. Flaherty last met with the economists in March in advance of the previous budget. According the Department of Finance, the economic planning assumptions that were solidified at the March meeting still apply to the upcoming budget. "The June 6 budget will provide fiscal projections based on the March private sector forecastsî says Mr. Flaherty. "While our economy grew solidly in the first quarter of this year, the global economic recovery remains uncertain. The Next Phase of Canada's Economic Action Plan will ensure we stay at the forefront of economic growth and job creation while we work to return to budget balance by 2014ñ15.î The Department of Finance has been relying on economists from the private sector to assist with planning since the federal budget of 1994. They provide insight for projections in areas such as inflation, GDP, and employment, to name a few. The average of their forecasts is used as a framework for economic assumptions used by the government. This strengthens the government's economic and fiscal forecasts by including an element of independence to the analysis. The March 2011 survey of private sector forecasters included Bank of America Merrill Lynch, BMO Capital Markets, Caisse de dépÙt et placement du Québec, CIBC World Markets, The Conference Board of Canada, Desjardins, Deutsche Bank of Canada, IHS Global Insight, Laurentian Bank Securities, National Bank Financial Group, Royal Bank of Canada, Scotiabank, TD Bank Financial Group, UBS Securities Canada, and the University of Toronto (Policy and Economic Analysis Program). ADDITIONAL EDUCATIONAL RESOURCES: Essential Tax Facts 2012 for the 2011 Tax Return

Have we mentioned that 30 is the new 20? Those of you with adult children may know what we mean! Statistics Canada has released an article, Measuring Voluntary Interhousehold Transfers in Canada, based upon data collected in 2008. The research looks at the assistance, financial or otherwise, that some Canadians receive from friends and family members. These are voluntary payments and they are made with no expectation of repayment. They are most often small, regular payments but they can be larger, emergency transfers as well. In 2008 there was $8.5 billion voluntarily transferred between Canadian households; this is twice as much as court-ordered alimony and child support payments and similar in size to social programs such as social assistance and child tax benefits! Payments are generally made by relatively well-off households to less economically stable households. In general the households giving the resources send a median of 3% of income to the receiving households, for whom the transfer represents 5% of household income. In Canada, between 1998 and 2008, the proportion of households that sent voluntary transfers to other households rose from 31% to 41%. In comparison, real household income increased 33% and charitable donations rose 32% over the same period. You can probably come up with many examples of voluntary interhousehold transfers. How many of us have given money to an adult child for a damage deposit or downpayment? How about sharing a car payment (but not the car!) for five years? The safety net that we provide our children is an important one, as long as it is gradually lowered and financial independence is on the horizon. Many newcomers to Canada send money home to relatives on a regular basis ñ living a frugal lifestyle here so that others may benefit. Increasing numbers of baby boomers care for their parents in real ways, providing transportation, household assistance and financial backing in order to ensure a comfortable and secure old age for those who supported them. Sometimes assistance is given to friends and neighbors who are struggling to cope with serious issues. We can all find ways to help in some small way, and together we can make a big difference. ADDITIONAL EDUCATIONAL RESOURCES:  The Smart, Savvy Young Consumer - Available in November, 2011!  

Farming proved more profitable in 2010 in most provinces, compared to 2009 figures. According to Statistics Canada, net farm income rose 46.1% in 2010, following a 16.6% drop in 2009. Realized net income (the difference between a farmer's cash receipts and operating expenses, minus depreciation plus income in kind) was up in all but two provinces ñ Alberta and New Brunswick. Revenues for oilseeds such as canola and soybeans increased, while wheat, barley and potato income fell due to lower prices for these crops and fewer of them brought to market. Farm operating expenses fell across the board as fertilizer, feed and pesticide costs dropped enough to more than offset higher labour and fuel expenses. Total net income adjusts realized net income for changes in farmer-owned inventories of crops and livestock. It represents the return to owner's equity, unpaid labour, and management and risk. Total net income rose to $2.7 billion in 2010, up $131 million from 2009. Declining inventories and production losses hampered further growth. Farm cash receipts for the first quarter of 2011 have been released by Statistics Canada and there is more good news for farmers for this year. Farm cash receipts include crop and livestock revenues and program payments. A record high of 12.1 billion was received by Canadian farmers with all provinces except Manitoba and British Columbia increasing revenue and with Quebec, PEI and Ontario showing double digit returns. Farm cash receipts had declined 0.2% in 2010. Prices for grains, dried peas and oilseeds rose due to lower supplies and increased demand for biofuels. Livestock, dairy and egg revenues have also been higher higher so far this year. Self-employed farmers are reminded that the filing deadline for unincorporated businesses is June 15th, 2011 - it's coming right up! ADDITIONAL EDUCATIONAL RESOURCES:  Master Your Investment in the Family Business

The Canadian Union of Postal Workers has given notice that it will begin strike activities on June 3, 2011. Talks are continuing and it is hoped that this will be settled before the strike date. However, Canadians should be prepared for a disruption in mail service if negotiations are unsuccessful. Canada Revenue Agency encourages taxpayers to set up for direct deposit so that payments upon which we all depend will continue to arrive safely and on time. Income tax refunds, federal and provincial GST/HST tax credit payments, Working Income Tax Benefit Advance Payments, the Canada Child Tax Benefit and the Universal Child Care Benefit can be received through direct deposit to your financial institution. Direct Deposit can be set up or changed online through My Account. Form T1 DD1 Direct Deposit Request - Individuals can be completed and mailed to your Tax Centre at any time. CRA does not accept banking information changes by phone, but they certainly can assist in completing the Direct Deposit Request form if you call them at 1-800-959-8281. Corporations may receive corporate income tax refunds and GST/HST refunds with a valid business number. Forms T2-DD Direct Deposit Request Form for Corporations and GST469 Direct Deposit Request should be completed and forwarded to your local tax services office or tax centre. Direct deposit is a safe, efficient way in which to receive payments. Make sure that you notify Canada Revenue Agency about any changes to your bank information or address so that your money will continue to arrive in your bank account. With a postal strike looking more certain each day, take time now to contact CRA with your direct deposit information. ADDITIONAL EDUCATIONAL RESOURCES: Essential Tax Facts 2012 for the 2011 Tax Return Available in November, 2011!