Fuel Excise Tax on Hold But Inflation is Not

The U.S.-Israel war on Iran has thrown global oil prices into turmoil and there is plenty of fallout for consumers. Travelling to Europe this summer? That’s in jeopardy, as jet fuel may run out.  Looking for relief at the pumps instead? The recently announced suspended federal excise tax on gasoline, unleaded aviation gasoline, diesel fuel and aviation fuel here in Canada will soften the blow, but only temporarily: it will be zero from April 20 to September 7, 2026. Here’s what you need to know:

Just released: the agenda for the January 20 Advanced T1 Tax Updated and Virtual CE Summit.  This is your opportunity to attend Canada’s most comprehensive T1 filing course from Canadian tax experts Evelyn Jacks, Larry Frostiak, Dr. Dean Smith and Alan Rowell; this time addressing a national audience in this year’s virtual webinar format. RSVP now: early-bird savings end January 15 and there is special pricing for firms who wish to enrol teams.

It’s hard to believe but back in 1917 the average taxpayer paid $14 and personal income tax was 2.6% of all federal government revenues.  But in 2020-2021, the $165 billion the government expects to collect from personal income taxes represents a whopping 57% of all budgetary revenues. This is a significant increase in reliance on the fruits of Canadians’ labour, even when compared to modern standards:  51% in 2017, for example. This makes the role of financial intermediaries – tax, accounting, bookkeeping, payroll and financial advisors – more important this year than ever before.  There are many places to look for savings before year-end.  

The 2021 payroll formulas were released this week and it turns out Knowledge Bureau’s estimations of the official tax brackets were very accurate: a one dollar discrepancy has been noted on the information we reported to you earlier. However, statutory payroll costs are adding significantly to the burdens small business owners face, according to a new report, which also recommends that ancient tax-free benefits be indexed.  

There are a number of usual suspects in the missed claims department, especially for do-it-yourself clients who now wish to hand over their tax and financial advisory work to professionals.  This is a great opportunity for professionals to find new money for their clients with obscure tax provisions like the GST/HST Rebate. 

There are special tax filing rules for people who immigrate to Canada.  They are required to file a Canadian tax return to report their world income during the period in which they were resident in Canada.  They also have to account for the valuation of their assets.  Tax advisors can be of great help in discussing the filing requirements before year end.

In response to a scathing report from the Parliamentary Budget Officer back in 2017, CRA initially promised to improve its service standards by 2020. CRA has made small steps in the right direction with an upgraded phone system for the business inquiries line.  Do you find that call requests are being resolved more quickly and accurately?