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.

No one is safe from fraud, it seems. The Canada Revenue Agency (CRA) is warning Canadians is be careful of emails, voice mails, even mail claiming to be from the CRA. These sophisticated and very believable "phishingî expeditions are after your personal information. It pays to be vigilant. So, what should you be watching for? Invariably, says the CRA, these communications claim to be offering a refund or a benefit payment. To get your cash, however, you need to identify yourself by giving your social insurance number (SIN) and provide credit card, bank account and passport numbers. The fraudsters seem to be well aware that when offered money ó especially from the CRA ó Canadians let down their guard. Another scam claims to be investigating accusations of tax evasion. Playing off taxpayers' fear of the CRA, an official-looking communication asks the recipient to go to the website via the provided link for more information. To "check in,î the recipient is asked personal information. (For examples of fraudulent communications, click here.) The CRA suggests that, when faced with any communication claiming to be from the CRA, you ask yourself the following questions: ï Am I expecting additional money from the CRA? ï Does this sound too good to be true? ï Is the requester asking for information I would not include with my tax return? ï Is the requester asking for information I know the CRA already has on file for me? ï How did the requester get my email address? ï Am I confident I know who is asking for the information? If you wish to verify the authenticity of a telephone number left on your voicemail, contact the CRA by using the telephone numbers listed on the CRA website. For business-related calls, contact 1-800-959-5525 and for individual concerns, contact 1-800-959-8281. It pays to be careful; don't be taken in by communications claiming to be from the CRA.   Additional Educational Resource: EverGreen Explanatory Notes  

The OECD is calling on the Bank of Canada to raise interest rates this fall with a target for the overnight rate of 2.25% by year end. Yet with household debt at an all-time high and more than one million Canadian families burdened with a debt-service ratio of more than 40%, higher interest rates will be costly ó making reducing debt a top priority. The Knowledge Bureau's Debt-Reduction Solutions Calculator can help you do just that. The first step in reducing debt is to assess the family's current cash flow situation and address the issue of spending.  Clearly, debt cannot be reduced if spending consistently exceeds income.  Deficit financing may have been the only solution in tough economic times when income levels dropped, but the long-term effects are devastating.  Financial health depends on finding a way to spend less than you earn. Once you have balanced spending vs income, it's important to develop a plan to reduce, then eliminate debt.  Even for families whose income exceeds expenses, debt service can be a financial drain on family wealth. So, you need a plan to eliminate "bad" debt, even if you are doing well financially. The Debt-Reduction Solutions Calculator, which is featured in the Debt and Cash Flow Management course helps advisors crunch the numbers for three debt-reduction options.  After cash flow has been tamed and you have determined a monthly amount to be used to service debt, the calculator shows the way to becoming debt-free using the following three strategies: Maximum mortgage payment - by using the full amount available for debt service to pay the mortgage, the debt can be eliminated in the shortest possible time. Fixed-term mortgage - by leaving some cash available for emergencies, you can eliminate the debt over a planned mortgage period. All-in-one account - for maximum flexibility, the all-in-one account allows the family to deposit all income into one account and use that account to pay expenses and the remainder each month to reduce family debt. Additional Educational Resources: Debt and Cash Flow Management and The One Financial Habit That Could Change Your Life.     

  When it comes to eroding your capital, there is no match for the expensive penalties you pay for failing to file your annual income tax return. But, on the bright side, if you file overdue returns before the Canada Revenue Agency (CRA) comes after you, you can avoid the big penalties. So, if you are delinquent, file your returns now ó and save money. The CRA has been proactively slapping penalties on delinquents of $1,000 for each missed return, be it personal, corporate or GST. A real estate agent in Ontario paid $2,000 for failing to file her 2007 and 2008 personal tax returns and ignoring CRA demand notices. A British Columbia couple was fined $12,000 for failing to file 2006 and 2007 personal returns; four tax returns for their numbered company, five corporate tax returns and a GST return for one year. A New Brunswick man was fined $8,000 for failing to file his 2008 and 2009 personal tax returns and several GST returns and failing to comply with a court order. Unfortunately, the tax pain won't end there if you have a balance due. The taxes will need to be paid along with hefty late filing penalties: First failure to file a return on time: 5% of the unpaid taxes owing plus 1% a month up to a maximum of 12 months from the filing due date; Subsequent failure to file on time within a three-year period: 10% of unpaid taxes plus 2% a month to a maximum of 20 months from filing due date. If you try to pull any tricks when filing those late returns, the penalties get bigger: Gross negligence penalties of 50% of taxes payable, minimum penalty of $100, if you knowingly or under circumstances amounting to gross negligence make a false statement or omission; Tax evasion penalties of up to 200% of taxes payable if the CRA can prove you intentionally cheated by understanding income or overstating deductions or credits. Jail time is a possibly, too. Interest, too, will compound daily at the prescribed rate, plus 4% on all the combined amounts due. And take note: even if you have a June 15 filing deadline for your unincorporated business, interest is due on balances as the interest clock starts ticking as of the April 30 deadline. It's Your Money. Your Life. Up-to-date tax preparation is the mandatory first step in your wealth-management plan. Avoid big penalties and minimize interest charges by filing your late returns now. Doing so before the CRA comes after you will preserve your wealth. Evelyn Jacks is president of Knowledge Bureau and has authored several of its tax courses and books.   Additional Educational Resource: DAW Audit Defence Workshops and Advanced Tax Preparation and Research course.  

The Canada Revenue Agency (CRA) and the Manitoba Vital Statistics Agency have teamed up to offer a convenient and secure way for Manitobans to apply for child benefit programs for their newborns. RC4476-MB or "Birth Registration and Canada Child Benefitsî explains the new program. After the mother ó who must be a Canadian citizen or permanent resident and primarily responsible for the care and upbringing of the child ó registers the child's birth with the province of Manitoba and gives her consent, the Manitoba Vital Statistics Agency will send the registration information over a secure communication network to the CRA. There is no need for separate communication with the CRA. The CRA will then determine eligibility for benefits, including the Canada Child Tax Benefit, the Universal Child Care Benefit, the GST/HST credit and any related provincial/territorial programs that the CRA administers. To register, you must: complete and sign the registration-of-birth form; consent to the Manitoba Vital Statistics Agency sharing your information with the CRA; provide your social insurance number. For more information, download RC4476-MB on the CRA website. The CRA also recently released various forms related to reporting GST: ï GST20 Election for GST/HST Reporting Period  provides the necessary form and explains how to change your GST reporting period. ï GST20-1 similarly provides the form for a listed financial institution to change its GST reporting period. ï Excise and GST/HST News, No. 84 brings together in one document all the measures related to GST/HST and excise tax proposed in the March 29 federal budget.   Additional Educational Resources: The Smart, Savvy Young Consumer,  One Financial Habit That Could Change Your Life and Introduction to Personal Tax Preparation Services.  

April employment numbers heralded a second month of strong gains in employment, fuelling optimism about Canada's economic strength. The only ones unlikely to celebrate are the under-25s. According to Statistics Canada's Labour Force Survey, the youth unemployment rate remained at 13.9% in April, little changed since July 2009. April saw employment increase by 58,000 jobs, following an 82,000 increase in March. Compared with a year ago, says StatsCan, employment was up 1.2% or 214,000 positions. Derek Burleton, deputy chief economist at TD Bank Group, puts it another way: "Over the past six months, net job creation ó a good indicator of the underlying trend ó is now running at around 26,000 a month. Job growth since 2002 has averaged about 20,000 a month.î Even better news is the quality of the jobs created. Full-time employment enjoyed the biggest gains in April ó more than 44,000 positions. All of the growth over the past 12 months, adds StatsCan, was in full-time work, up 217,000 positions or 1.6%, while part-time employment was unchanged. The greatest strength was in the goods sector, with increases in construction, manufacturing, natural resources and agriculture. It is the public sector that registered losses, which is not surprising given that governments, federal and provincial, have vowed to reduce public sector spending and trim their deficits. Services hiring was down 12,000 positions, led by a 32,000-drop in public administration positions, notes CIBC economist Avery Shenfeld. "The tilt toward full-time and private sector workî adds Shenfeld, "is further reassurance that after a long slumber, the Canadian economy is waking up.î But it is not all coming up roses. The jobless rate did creep upward to 7.3% in April, put down to unemployed workers, encouraged by recent gains, returning to the labour market. The participation rate moved to 66.7%, marginally higher than March's 66.6%. Despite gains in the 25-plus category, Burleton notes that the share of adult Canadians with jobs continues to sit more than a full percentage point below its 10-year average of about 63%. Geographically, employment increased in Quebec, British Columbia, Alberta, Saskatchewan, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. There was little change in the other three provinces, says StatsCan. Perhaps of more interest is comparison to the U.S. When adjusted to U.S. concepts, Canada's employment rate was 62.6% vs. 58.4% in the U.S. ó a 4.2-percentage-point difference. Until 2002, says StatsCan, Canada's employment rate was "markedlyî lower than that of the U.S.: "Since 2002, the adjusted employment rate in Canada has been higher, with the gap between the two countries widening since late 2006.î Additional Educational Resources: Financial Recovery in a Fragile World and Tax Strategies for Financial Advisors.    

It appears Canadians are heeding the warnings about high household debt and are taking a more prudent approach to spending. For the year ending Feb. 29, growth in consumer credit slowed to its lowest rate since 2002, likewise slowing the accumulation of household debt. Perhaps, it is the threat of higher interest rates as early as this fall (Knowledge Bureau Report, April 25); maybe it is a response to Bank of Canada Governor Mark Carney's repeated musings, but Canadians are "hunkering down,î in the words of TD Bank Group economist Francis Fong. Consumer credit ó which includes unsecured lines of credit, home equity lines of lines, personal loans and credit cards ó grew by 2.3% year over year. Consumer credit outstanding actually declined in March, CIBC economist Benjamin Tal reports in Household Credit Analysis. As well, growth in lines of credit has steadily declined over the past three years, coming in at 5% increase this year vs. a 21% increase three years ago. The amount of credit card lending has actually declined by 6.6%. "The moderation in debt accumulation,î Fong notes, in a report entitled Are Canadians Prepared for Higher Interest Rates?, "speaks to a more cautious approach to consumer spending. Indeed, retail sales growth has decelerated in lockstep, with the slowdown being felt mostly in non-discretionary areas.î Canadian households are continuing to spend, he adds, "but an increasing number simply do not hold a balance on their cards.î The one source of credit that has stayed constant for the past three years is residential mortgage credit. It has grown at a rate of 7% to 8% a year and there is no indication of that changing. Both Fong and Tal point to "substitutionî in which credit card and other forms of debt are replaced by lower-priced mortgage debt. But there is also a robust housing market ó the average price of an existing house has grown by about 30% in the past three-plus year, says Fong ó keeping mortgage credit growing at a brisk pace. If housing prices gradually soften by about 10% over the next two year, as Tal suggests, the growth in mortgage credit will likewise soften. So, will Canadians be in a better position to handle higher interest rates when they come? It appears so. Some households will fare better than others, of course. The Canadian Association of Accredited Mortgage Professionals suggests 21% of current mortgage holders ó or 1.2 million mortgages ó may face financial difficulty. The Bank of Canada's analysis suggests normalized rate could affect 7.5% of households. But Fong is not unduly concerned. "While excessive debt levels remain the economy's largest domestic medium-term threat,î he concludes, "a combination of slowing credit accumulation, gradual increase in interest rates and efforts to lock-in at still-low fixed rates will help to ease the adjustment on households.î   Additional Educational Resource: Debt and Cash Flow Management Course.