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.

These days it is not unusual for Canadians to have to miss deadlines because of circumstances beyond their control, especially when extreme weather is involved. Manitoba is dealing with the worst flooding in 300 years, so it may be expected that some self-employed residents of that province may still be pumping out their basements or drying out documents on the June 15th filing deadline. CRA provides taxpayer relief provisions for times like these ñ perhaps this is a good time to review them. CRA may waive or cancel penalties and/or interest when the request is because of a natural or man-made disaster, a civil disturbance or disruption such as a strike, a serious illness or accident, or serious emotional or mental distress as in the loss of a loved one. As well, actions by the CRA such as publication errors, communication delays and processing errors may be grounds for taxpayer relief. If an amount owing to CRA cannot be paid due to loss of employment and the ensuing financial hardship, or because of a large interest charge, some, or all, of the interest portion of the bill may be waived. In this case a payment schedule must be agreed upon and all payments made on time. For individuals there is usually a 3 year limitation period from the end of the tax year to file a tax return to claim a refund, and a 3 year limitation period from the date of the original Notice of Assessment to ask for an adjustment. However, section 152.2 of the Income Tax Act allows for a longer period of reassessment with the taxpayers consent. There is a rolling 10 year period for requests under the Taxpayer Relief Provisions that is reset on January 1st of each year; therefore in 2011, requests can be made as far back as the 2001 tax year. Form RC 4288 Request for Taxpayer Relief may used to submit information, although it is not mandatory. It should be completed in full, including a detailed explanation of the circumstances and documentation attached when required. CRA expects that, before requesting relief due to financial hardship, current year remittances have been made to date, a payment arrangement has been set up and all tax filing is current. The taxpayer's history with CRA will also be taken into account. If a request for taxpayer relief is denied there will be two opportunities to have CRA review the file and, if these are unsuccessful, an application for judicial review may be made. For detailed information on taxpayer relief, consult the CRA publication IC07-1, Taxpayer Relief Provisions.

For most of us the tax filing deadline has passed, and with any luck we are expecting a refund or we have managed to pay the balance owing to CRA. What happens if we are facing a large amount due that we are unable to pay all at once? First of all, it is always important to submit your tax return on time to avoid late filing penalties! Late filers this year are being charged compound daily interest (based upon a 5% annual rate) on amounts owing after May 2, 2011.  It is best to pay any tax owing by April 30th of each year, or the next business day if that date falls on a weekend. Even when your filing due date is later, as in the case of self-employed taxpayers, the interest clock starts ticking on the first business day after the April 30th filing deadline - May 2nd this year. The government expects you to beg, borrow or steal (well, beg or borrow anyway) to come up with the amount owing. When circumstances don't allow this, pay as much as you can then contact the CRA Debt Management Centre at 1-888-863-8657 to arrange for a payment plan. There may be penalties when you owe CRA, especially if you have been in arrears before. Benefits such as GST payments may be withheld until your balance owing is repaid. It is wise to seek professional advice before the end of the tax year so you can plan proactively to satisfy your tax obligations. The best time to start that planning ñ right now!   ADDITIONAL EDUCATIONAL RESOURCES: Master Your Money Management   

How much does the average Canadian family pay in taxes each year? The Fraser Institute published the annual Canadian Consumer Tax Index in April, and the findings are not pretty. Since the Institute began documenting this statistic in 1961, the total tax bill has increased by 1686%! When expressed in 2010 dollars, the inflation-adjusted tax bill drops to 140.07% of the 1961 level. The annual tax expenditure has grown more than any other category of expense, including food, clothing and shelter. Spending on taxes has overtaken the Consumer Price Index, a measurement of the average price that Canadians pay for a representative basket of goods and services. It is interesting to note that Statistics Canada just announced that the mix of goods in that basket is being revised to better represent the kinds of things that Canadians currently buy. The Canadian Consumer Tax Index includes a variety of taxes and expenditures when calculating the annual tax bill. This may change from year to year as new taxes are added or deleted, and the makeup of the average family is adjusted as well. Taxes include income tax, EI and CPP contributions, property tax, user fees, business taxes passed on to customers and consumer tax such as provincial sales tax, duty, GST and HST. In 1961, the average household income was $5000, and $1675 or 33.5% was paid in taxes. Fast forward to 2010, when the average household took in a cool $72,393, and gave back $29,913 in taxes. That is 41.3% of income paid out in taxes, and most governments are operating in a deficit position which means that the taxes collected are not even covering current expenditures, let alone debt! If you think of a budget deficit as deferred taxation, and include these annual deficits in the tax burden, the total tax bill for the average Canadian family (not adjusted for inflation) has increased by a whopping 1987% since 1961! What does this mean? According to the Fraser Institute, in 2010 the average Canadian family spent 34% of income on the necessities of life, and 41% was paid in taxes. Compare that to 1961, when 56.5% of income earned put a roof over your head and food on the table, and the government collected 33.5% in taxes. We all pay taxes in order to ensure that programs, services and infrastructure are maintained for all Canadians.  However, no-one should pay more income tax than he or she has to by law.  Don't you think that money in the hands of the taxpayer is just as important as government spending for a healthy, prosperous nation?  Your tax return is a snapshot of your financial health.  Take the time to examine it each year and be sure to seek professional guidance when you have questions or concerns.  Canadians must embrace financial literacy in order to regain control of their tax liability, their budgets and their futures ñ take action now! ADDITIONAL EDUCATIONAL RESOURCES: Master Your Taxes

Job numbers were on the upswing in Canada in April, according to the most recent Labour Force Survey by Statistics Canada. More employment was created last month in the areas of finance, insurance, real estate and leasing, business building and other support services. Overall, jobs numbers have increased 1.7% nationally since April, 2010 and unemployment is down slightly to 7.6%. Full-time employment is now back to October, 2008 levels for the first time since the recession. The good news is spread unevenly across the country, however. Part-time jobs in Ontario rose, driving the unemployment rate down to 7.9% with a 12 month employment gain of 2.4%. Newfoundland and Labrador saw increases in employment as well with its April unemployment rate dropping to 11.1% following a 12 month employment gain of 6.9% - the highest in Canada. Nova Scotia and Manitoba lost jobs in April. Data for tables from: Labour Force Characteristics by Province Tables 3 and 4 Statistics Canada, April, 2011   It is interesting to note that women age 55 and over benefitted from new jobs more than anyone in April, with an increase in employment of 7.9%. It will be interesting to see if the upward trend in employment in general continues, as some of April's job gains are due to temporary hiring for the election and census. ADDITIONAL EDUCATIONAL RESOURCES: Master Your Real Wealth

We are fortunate to live in this great country, which allows us to participate freely in democracy.  All parties and their candidates are to be congratulated!  With a majority government, the people and government of Canada can put their focus on important things over the next four yearsñ families, jobs, health and security to name a few ñ without the distraction of an imminent election call.  One of the first items on the agenda may be a reintroduction of the federal budget, which died with the election call.A review of key provisions follows, some of which will be discussed at the Knowledge Bureau's Post-Election Tax and Economic Review, to be held in Winnipeg on Friday, May 6, Calgary on Monday. We can expect to see the reintroduction of tax measures such as the Children's Arts Credit, Family Caregiver Credit and the Volunteer Firefighters Credit. New initiatives announced during the election to take effect when the deficit is eliminated will almost certainly be included ñ look for the doubling of the TFSA limit and the Children's Fitness Amount, as well as a tax credit for adult fitness. Also announced during the election, the Family Tax Cut will allow up to $50,000 of household income to be shared by a couple with children under the age of 18. Changes to curtail tax avoidance using RRSPs, charitable donations, Individual Pension Plans and Employee Stock Options were introduced in the 2011 budget ñ no doubt they will reappear. Pooled Retirement Pension Plans ñ first unveiled in December, 2010 ñ may well be included with other measures to assist those saving for retirement. Easing of rules for RESP beneficiaries who are siblings, and further access to student loans and loan forgiveness, tuition and education credits will benefit students and young workers. Small business may see the temporry Hiring Credit reintroduced along with the extention of accelerated CCA rates for equipment and machinery. Some seniors could see their Guaranteed Income Supplement boosted and RDSP owners with shortened life expectancy can look for relief to early withdrawal rules. Financial literacy and consumer protection measures were highlighted in the March, 2011 budget - we hope to see that and even more opportunities for Canadians to engage in financial education.  Take a deep breath ñ there are sure to be lots of tax and financial changes ahead!   Join us at one of our VIP Breakfasts for a Post-Election Tax & Economic Overview.  

Around the world communities are grappling with record-setting natural disasters. The recent earthquake and tsunami in Japan, flooding in the North American mid-west and killer storms in the U.S. are recent examples. It is hard to imagine the disruption to daily routines endured by those who survived the devastation. Once the basics of survival are taken care of, how do victims of these events begin to deal with mundane tasks such as income tax filing? In Canada, there are Taxpayer Relief Provisions available to taxpayers affected by natural disasters. On April 28th, CRA announced that those who have been directly impacted by spring flooding or natural disasters outside of Canada, and those who are participating in relief efforts, may apply for taxpayer relief if they are unable to fulfill their income tax obligations by the May 2, 2011 deadline. Those who may have other deadlines, such as business owners and the self-employed, are included as well. Form RC4288, Request for Taxpayer Relief, should be submitted by anyone who is not able to complete tax requirements by his or her deadline. This may allow interest and/or penalties to be waived under appropriate circumstances. CRA encourages taxpayers to register for e-services so that they are able to access information and make payments online when it is difficult to physically access their financial institutions.   ADDITIONAL EDUCATIONAL RESOURCES:  Investment Strategies in Charitable Giving