Canada Workers Benefit
The current Working Income Tax Benefit (WITB) is a refundable tax credit that supplements the earnings of low-income workers. Effective 2019, the Budget proposes to strengthen this program (to be renamed the Canada Workers Benefit (CWB)), by making it more generous, and making the benefit more accessible. To that end, the Budget also proposes to allow the Canada Revenue Agency (CRA), in circumstances where an individual does not claim the new CWB, to determine if the individual is eligible to receive the benefit and assess their return as if the benefit had been claimed.
Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)
The Government of Quebec announced recently that the QPP would be enhanced in a manner similar to the enhancement of the CPP that was announced in 2016. As part of the CPP enhancement, the Income Tax Act (ITA) was amended to provide a tax deduction for employee contributions (as well as the “employee” share of contributions by self-employed persons) to the enhanced portion of the CPP, whereas a tax credit will continue to be provided on employee contributions to the base CPP (i.e., the existing CPP). Contributions to the enhanced portion of the CPP will begin in 2019 and will be fully phased in by 2025.
To provide consistent income tax treatment of CPP and QPP contributions, the Budget proposes to amend the ITA to provide a deduction for employee contributions (as well as the “employee” share of contributions made by self-employed persons) to the enhanced portion of the QPP, paralleling the deduction for the enhanced portion of employee QPP (and CPP) contributions for Quebec income tax purposes. This measure will apply for the 2019 and subsequent taxation years.
Other minor personal tax changes include the following:
• Expansion of the medical expense tax credit to include certain additional expenses after 2017 in respect of a specially trained animal to assist patients with severe medical impairments;
• Extension to 2023 of an existing temporary federal measure allowing a qualifying family member to be the plan holder of an RDSP for individuals with capacity issues; and
• A further extension of the eligibility for the mineral exploration tax credit for an additional year, to flow-through share agreements entered into on or before March 31, 2019.