Federal budget 2022: Highest-earning Canadians face minimum tax rate increase
The federal government is moving to raise the minimum tax rate paid by wealthy Canadians in the budget and narrowing its focus on the highest earners.
In its budget Tuesday, Ottawa is raising the alternative minimum tax rate and imposing new limits on many of the exemptions, deductions and credits that apply under the system starting in 2024.
“We’re making sure the very wealthy and our biggest corporations pay their fair share of taxes, so we can afford to keep taxes low for middle-class families,” Finance Minister Chrystia Freeland said in the prepared text of her remarks.
The alternative minimum tax (AMT) introduced in 1986 is a parallel income tax calculation that allows fewer deductions, exemptions and tax credits than the ordinary tax rules for the country’s highest earners. Wealthy Canadians pay the alternative minimum or regular tax, whichever is higher.
The government announced in the budget that it is increasing the alternative minimum rate to 20.5 per cent from 15 per cent starting in 2024.
To help ensure lower- and middle-income Canadians don’t get caught up in the increase, Ottawa is also proposing to increase the exemption to the start of the fourth federal tax bracket from $40,000. For 2024, it expects the exemption would be about $173,000 and be indexed annually to inflation.
The government estimates that under the new rules about 32,000 Canadians will be covered by alternative minimum tax in 2024, compared with about 70,000 if it did not make the changes.
However, the higher rate and revamping of the allowable deductions and credits mean Ottawa expects to take in an additional $150 million in 2023-24 and an additional $625 million in 2024-25.
Bruce Ball, vice-president for tax at CPA Canada, said there is a broader range of things that will go into the alternative minimum tax calculation, but the good news for most taxpayers is that the threshold will be much higher.
“That should exclude a lot of people even if they have more add-backs than they would have under the old system, so there’s some good news and bad news I guess, depending on your situation,” Ball said.
“If you’re higher income you may end up paying more; if you’re lower income you may not be subject to AMT.”
While the richest Canadians face the possibility of higher taxes, the budget also includes a one-time payment for those who receive the goods and services tax credit to help offset the rising cost of living.
“We all know that our most vulnerable friends and neighbours are still feeling the bite of higher prices. And that is why our budget delivers targeted inflation relieve to those who need it most,” Freeland said.
Under the proposal billed as a grocery rebate, Canadians who are eligible will receive an additional amount equal to twice the GST tax credit amount for January. For couples with two children the amount could be up to $467, while a single Canadian without children could receive up to an extra $234.
Student budgets will also see a boost from the budget as the government increases the Canada Student Grants compared with pre-pandemic levels and raises the interest-free Canada Student Loan limit.
The changes increase the total federal aid available to a full-time student based on financial need to $14,400 for 2023, up from $13,160 for 2022 and $10,140 in 2019 before the pandemic.
The government is also moving to cap the increase on alcohol excise duties to two per cent for one year. Ordinarily, the rates are indexed to the consumer price index and were previously set to rise by 6.3 per cent.
However, Canadians looking to take a flight next year will face an increase in the air travellers security charge paid by those flying in Canada starting on May 1, 2024. The charges, which are paid by passengers when they buy an airline ticket, help pay for the air travel security system and were last increased in 2010.
The charge for a domestic round trip will rise to $19.87, from its current rate of $14.96. The charge for a transborder flight to the U.S. will rise to $16.89 from $12.71, while for departing international flights travellers will pay $34.42, up from $25.91.
This report by The Canadian Press was first published March 28, 2023.
Ottawa requests joint ‘working group’ on oilsands contamination with Alberta
Federal Environment Minister Steven Guilbeault has further spelled out what he wants to see in a new body that would oversee monitoring and communications around pollution problems in the oilsands.
In a letter dated March 16 to his Alberta counterpart Sonya Savage, Guilbeault said the new federal-provincial-Indigenous group would look at a wide variety of issues stemming from releases of tailings pond water from Imperial Oil’s Kearl mine. Although Savage has agreed to a new joint body, Guilbeault’s proposal seems to go farther than what she suggests.
“I am proposing the establishment of a joint federal-provincial-Indigenous working group, with participation from the oil companies, to give transparency to all parties involved by meeting on a regular basis to discuss remediation and containment plans, as well as notifications for ongoing incidents of spill or seepage,” Guilbeault wrote in the letter.
“A communication protocol should be established,” he said. “It would be the basis of improvements for future environmental emergencies notifications, reform of water monitoring and strong involvement of Indigenous communities.”
Guilbeault said the exact mandate has yet to be determined. Still, it seems to be more than Savage wants.
A statement from her office earlier this week said Alberta wants to improve communications and start a group for “accelerating collaboration on a long-term solution for the treatment and remediation of tailings ponds.”
That statement didn’t mention including First Nations in the group or any reforms to monitoring.
Guilbeault’s letter refers to Ottawa’s responsibilities in protecting fish habitat and treaty rights, both of which may have been affected by the Kearl releases.
That’s a message to the province that Ottawa intends to have a greater role in monitoring the oilsands, said Martin Olszynski, a professor of resource law at the University of Calgary.
“What (Guilbeault’s) saying is, ‘Let’s be clear, I have to be involved.’ The jurisdiction is clearly there for the federal government.”
Ottawa has been criticized both at home and internationally for inconsistent enforcement of the Fisheries Act.
In 2020, the environmental watchdog set up under North American trade agreements found there was valid evidence of oilsands tailings in groundwater around the ponds but no sign that it had affected any federal enforcement decisions. That same body found little co-ordination between Ottawa and Edmonton on the issue.
Guilbeault’s letter may be a sign the feds are taking action on those concerns, Olszynski said.
“They recognize this is a bigger issue. It’s not just about notification, it’s a question of what is going on with these tailings and their management.”
The first release from Kearl was spotted and reported in May as discoloured water near a tailings pond. It was found to be tailings seepage but no further updates were provided to area First Nations until February, when it was disclosed to the public and both environment ministers along with a second release of 5.3 million litres of tailings.
Imperial said earlier this week that the cleanup of the second spill is nearly complete. It said the seepage is being “mitigated,” although it continues.
Both Imperial and the provincial government say there has been no impact on waterways or wildlife, although neither have granted requests to see the data on which that assurance is based.
This report by The Canadian Press was first published March 17, 2023.
Bob Weber, The Canadian Press
Canada sending four more battle tanks, ammunition to Ukraine
Prime Minister Justin Trudeau announced today that Canada is providing Ukraine with more weapons, which he says will help the country win on the battlefield against Russia.
Trudeau says Canada will donate four additional Leopard 2 main battle tanks to support the Armed Forces of Ukraine, growing Canada’s contribution to eight tanks in total.
Canada will also donate an armoured recovery vehicle and over 5,000 rounds of ammunition.
Trudeau committed to imposing more sanctions on people and businesses that are complicit in Russia’s ongoing war with Ukraine.
On the one year anniversary of the invasion, Trudeau called Russian President Vladimir Putin a coward and weak, and reinforced that Canada is a friend of Ukraine.
Ukrainian President Volodymyr Zelenskyy told reporters in a press conference on Friday that more weapons will allow his people to regain their territory.
This report by The Canadian Press was first published Feb. 24, 2023.
Funeral underway for four-year-old boy killed in Quebec bus crash last week
A funeral is underway for one of the two young children killed when a bus crashed into a daycare last week in Laval, Que., just north of Montreal.
The bells of the Ste-Rose-de-Lima church tolled at 11 a.m. as five men carried the small white casket of Jacob Gauthier into the sanctuary.
A funeral notice published last week said Jacob was four and a half and is survived by his mother, father, sister, as well as grandparents and other extended family.
Media were asked to keep their distance as family and friends made their way into the church, past tributes of stuffed animals and flowers that were placed outside the door.
Four silver cars from the funeral home pulled up shortly before the service started, and men could be seen unloading large displays of white flowers.
Samir Alahmad, the president of the province’s private daycare association, said it is hard to describe the magnitude of the parent’s pain.
“Every parent in Quebec, every citizen in Quebec, should feel the pain those people are suffering now,” he said outside the church. “There’s no words to describe what the family is suffering today.”
More than a week after the tragedy, “we still don’t have an answer for how this happened,” he said.
The alleged bus attack at the Garderie Éducative Ste-Rose on Feb. 8 left two children dead and sent six to hospital with injuries.
Pierre Ny St-Amand, a 51-year-old driver with the Laval transit corporation, was arrested at the scene and later charged with two counts of first-degree murder and seven other offences, including attempted murder and aggravated assault.
Funeral details for the second child, who was identified by her parents as Maëva David, have not been announced.
This report by The Canadian Press was first published Feb. 16, 2023.
The Ultimate Solution to Selling Your Used Car in Ontario
Uganda’s president signs into law anti-gay legislation with death penalty in some cases
Alberta votes in the strangest — and closest — election in its political history
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
News23 hours ago
The Hidden Struggles: Uncovering the Reality of Being Black in Canada
Economy24 hours ago
Lira hits record low, but stocks rise after Erdogan win in Turkey
Business23 hours ago
Halifax condo residents face obstacles trying to go green with solar panels
Media21 hours ago
Russia says U.S. Senator should say if Ukraine took his words out of context
News19 hours ago
More Canadian companies adopt ‘stay interviews’ amid push to retain staff
Health22 hours ago
B.C. initiative aims to expand genetic screening for Ashkenazi Jewish people at risk of hereditary cancers
Real eState21 hours ago
BCFSA rules on real estate agent’s $50K loan to client
News20 hours ago
Latvians got a surprise day off today. Here’s why