Canada Taxation 2014- Last

8/12/2019 Canada Taxation 2014- Last

1/93

This booklet is intended to provide useful information to assist businesses inCanada taxation and new harmonized sales tax (HST) in British Columbia, anddoes not replace federal or provincial legislation and accompanying regulations.It is strictly intended for reference purposes. As it may not completely addressyour particular operation, you may wish to consult the appropriate legislation orcontact: Canada Revenue Agency at 1 -800-959-5525 or www.cra-arc.gc.ca B.C. Ministry of Finance at 1 -877-388-4440 or www.gov.bc.ca/fin/

D ayarayan M anagement & C onsulting Services LTD
http://www.cra-arc.gc.ca/http://www.gov.bc.ca/fin/http://www.gov.bc.ca/fin/http://www.cra-arc.gc.ca/


2/93

Canada at a glanceDes 2000 2004 2007 2008 2010 2011 2012 2013 2014 2015

National currencyBillions 1,100.52 1,211.24 1,311.26 1,320.29 1,324.99 1,352.56 1,378.33 1,412.87 1,447.58 1,482.15Index 97.825 106.577 116.65 121.444 122.613 126.287 128.741 131.506 134.295 137.104 National currency(Units) 35,127.84 40,466.77 46,516.19 48,204.16 47,699.29 49,676.46 51,187.92 53,169.99 55,226.78 57,207.63Current international dollar($B)

888.552 1,065.76 1,263.63 1,300.55 1,334.14 1,391.11 1,432.61 1,477.94 1,527.17 1,582.35Percent of GDP 20.23 20.723 23.241 23.238 22.204 23.25 24.011 24.17 24.227 24.177Percent of GDP 23.623 23.036 24.077 23.569 19.072 19.916 20.196 20.655 21.042 21.596Index 95.383 104.633 111.45 114.108 116.475 119.858 122.338 124.78 127.26 129.821Percent change 8.172 16.342 11.852 2.143 25.541 13.394 4.507 3.674 3.707 3.544Percent change 8.645 16.826 11.452 1.964 26.439 13.698 4.445 3.845 4.083 3.976Percent change 9.207 13.285 7.032 -4.629 18.649 9.563 3.677 4.759 4.959 5.084Percent of GDP 43.533 40.589 40.741 39.661 38.261 38.037 38.683 39.532 39.999 40.604Percent of GDP 40.588 39.726 39.158 39.535 43.815 42.304 41.876 41.441 41.047 40.808Percent of GDP 46.227 35.213 22.917 22.306 32.224 34.916 36.802 37.056 36.465 35.088Percent of GDP 82.127 72.601 66.518 71.114 83.953 84.117 84.163 82.287 79.694 76.444Percent of GDP 2.719 2.311 0.835 0.329 -3.131 -3.334 -3.814 -3.515 -3.185 -2.58


3/93

3

Welcome to the City of VancouverBordered by the Coast Mountain Range and the Pacific Ocean, Vancouver isrecognized as one of the world's mostlivable cities. Archaeological evidence

shows that theCoast Salish people had settled the Vancouver area by 500 BC.The City of Vancouver is renowned for its innovative programs in the areas ofsustainability, accessibility and inclusivity. In 2010, Vancouver will host theworld at the 2010 Olympic and Paralympics Winter Games.

Facts about VancouverPopulation/ ClimateVancouver is the eighth largest city in Canada with a population of 578,000(2006 census) and has one of the mildest climates in Canada with temperaturesaveraging around 3 degrees Celsius in January and 18 degrees Celsius in July. Itcovers 114.7 sq km (44.3 sq miles), and is part of Metro Vancouver, the thirdlargest metropolitan area in Canada, with a population of 2.1 million (2006census).

Business/ EconomyVancouver has Canada's largest and most diversified port, trading $75 billion in

goods annually. It is home to a variety of different industries, including themining, forest, biotech, film and software industries.
http://en.wikipedia.org/wiki/World%27s_Most_Livable_Citieshttp://vancouver.ca/commsvcs/socialplanning/initiatives/aboriginal/community.htmhttp://vancouver.ca/sustainability/index.htmhttp://olympichostcity.vancouver.ca/http://olympichostcity.vancouver.ca/http://vancouver.ca/sustainability/index.htmhttp://vancouver.ca/commsvcs/socialplanning/initiatives/aboriginal/community.htmhttp://en.wikipedia.org/wiki/World%27s_Most_Livable_Cities


4/93


5/93

5

Canada at a GlancePopulation Table:

Year

1995 2005 2010 2011 2012 2013

number

Canada 29,302,311 32,245,209 34,605,346 34,605,346 34,884,137 35,295,770

Newfoundland and Labrador 567,397 514,363 511,272 511,272 527,653 527,464

Prince Edward Island 134,415 138,055 146,152 146,152 145,254 145,295

Nova Scotia 928,120 937,941 946,378 946,378 944,406 940,567

New Brunswick 750,943 747,960 755,810 755,810 756,583 755,710

Quebec 7,219,219 7,581,911 8,002,098 8,002,098 8,107,125 8,174,510

Ontario 10,950,119 12,528,480 13,422,912 13,422,912 13,457,445 13,585,887

Manitoba 1,129,150 1,178,301 1,254,658 1,254,658 1,254,245 1,268,915

Saskatchewan 1,014,187 993,579 1,063,535 1,063,535 1,094,373 1,114,170

Alberta 2,734,519 3,322,200 3,798,791 3,798,791 3,923,016 4,060,719

British Columbia 3,777,390 4,196,788 4,592,034 4,592,034 4,558,879 4,606,375

Yukon 30,442 31,904 34,891 34,891 36,543 36,690

Northwest Territories 41,432 43,399 43,485 43,485 43,606 43,523

Nunavut 24,978 30,328 33,330 33,330 35,009 35,295,770

Source: Statistics Canada, CANSIM table 051-0005.
http://cansim2.statcan.gc.ca/cgi-win/cnsmcgi.exe?Lang=E&RootDir=CII/&ResultTemplate=CII/CII_pick&Array_Pick=1&ArrayId=051-0005http://cansim2.statcan.gc.ca/cgi-win/cnsmcgi.exe?Lang=E&RootDir=CII/&ResultTemplate=CII/CII_pick&Array_Pick=1&ArrayId=051-0005


6/93

6

Annual Financial Report of the Government of Canada

Fiscal Year 2012 2013

The Government posted a budgetary deficit of $18.9 billion for thefiscal year ended March 31, 2013, down from a budgetary deficit of$26.3 billion in 2011 12 and down by nearly two-thirds from the$55.6-billion budgetary deficit in 2009 10.

Revenues increased by $7.5 billion, or 3.0 per cent, from 2011 12, primarily reflecting higher economic activity. Program expensesincreased by $2.1 billion, or 0.9 per cent. Public debt charges weredown $1.9 billion, or 6.2 per cent.

The federal debt (the difference between total liabilities and totalassets) stood at $602.4 billion at March 31, 2013. The federal debt-to-GDP (gross domestic product) ratio was 33.1 per cent, down from33.2 per cent a year earlier.

As reported by the Organization for Economic Co-operation andDevelopment (OECD), Canada's total government net debt-to-GDPratio, which includes the net debt of the federal, provincial/territorialand local governments, as well as the net assets held in the CanadaPension Plan and Qubec Pension Plan, stood at 34.5 per cent in2012. This is the lowest level among Group of Seven (G-7) countries,which the OECD expects will record an average net debt of 87.0 percent of GDP for the same year.

For the 15th consecutive year, the Government has received anunmodified audit opinion from the Auditor General of Canada on theconsolidated financial statements.

Summary of Canada taxation history:The Chinese head tax was a fixed fee charged to each Chinese person enteringCanada. The head taxwas first levied after the Canadian parliament passed theChinese Immigration Act of 1885and was meant to discourage Chinese peoplefrom entering Canada after the completion of theCanadian Pacific Railway. The tax was abolished by theChinese Immigration Act of 1923, which stoppedall Chinese immigration except for business people, clergy, educators, students,and other categories. In 1917 (revise 1948, 1960 1and major reform in 1972 and

tax reform to tax credit in 198) , a tax on income was introduced as a temporarymeasure to fund the war. The income tax has since become a permanent feature
http://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Head_taxhttp://en.wikipedia.org/wiki/Parliament_of_Canadahttp://en.wikipedia.org/wiki/Chinese_Immigration_Act_of_1885http://en.wikipedia.org/wiki/Canadian_Pacific_Railwayhttp://en.wikipedia.org/wiki/Chinese_Immigration_Act_of_1923http://en.wikipedia.org/wiki/Chinese_Immigration_Act_of_1923http://en.wikipedia.org/wiki/Canadian_Pacific_Railwayhttp://en.wikipedia.org/wiki/Chinese_Immigration_Act_of_1885http://en.wikipedia.org/wiki/Parliament_of_Canadahttp://en.wikipedia.org/wiki/Head_taxhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/China


7/93

7

of the Canadian tax system. TheSecond World Warled to dramatic change inthe tax system. The Tax act has about 17 parts, more than 260 section thatusing Latin numbering system to introduce every part and division .Generallyyou can find Part,Divisision,Sub-Division,Section,Sub-sectionParagraph,Sub_Paragragh,Clauses,Sub-Clauses and I.T.A.R.( IncomeTax Application Rules(1972). Both the federal and provincial governments haveimposed income taxeson individuals, and these are the most significant sourcesof revenue for those levels of government accounting for over 40% of taxrevenue. The federal government charges the bulk of income taxes with the provinces charging a somewhat lower percentage, except in Quebec. Incometaxes throughout Canada are progressivewith the high income residents payinga higher percentage than the low income residents, except in Alberta which usesa flat income tax provincially. Where income is earned in the form of a capitalgain, only half of the gain is included in income for tax purposes; the other halfis not taxed. Federal and provincial income tax rates are shown atCanadaRevenue Agency's website. Personal income tax can be deferred in a RegisteredRetirement Savings Plan(RRSP) and tax sheltered savings accounts (whichmay include mutual funds and other financial instruments) that are intended tohelp individuals save for their retirement.

Corporate taxes

Companies and corporations pay tax on profit income and oncapital. Thesemake up a relatively small portion of total tax revenue. Tax is paid on corporateincome at the corporate level before it is distributed to individual shareholdersas dividends. A tax credit is provided to individuals who receive dividend toreflect the tax paid at the corporate level. This credit does not eliminate doubletaxation of this income completely, however, resulting in a higher level of taxon dividend income than other types of income. (Where income is earned in the

form of acapital gain, only half of the gain is included in income for tax purposes; the other half is not taxed.) Corporations may deduct the cost ofcapital followingcapital cost allowanceregulations. Starting in 2002, severallarge companies converted into "income trusts" in order to reduce or eliminatetheir income tax payments, making the trust sector thefastest-growing inCanadaas of 2005. Conversions were largely halted on October 31, 2006, whenFinance MinisterJim Flahertyannounced that new income trusts would besubject to a tax system similar to that of corporations, and that these rules wouldapply to existing income trusts after 2011.
http://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/Progressive_taxationhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Capital_gainhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Capital_%28economics%29http://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Capital_Cost_Allowancehttp://en.wikipedia.org/wiki/Income_trust#Canadahttp://en.wikipedia.org/wiki/Income_trust#Canadahttp://en.wikipedia.org/wiki/Jim_Flahertyhttp://en.wikipedia.org/wiki/Jim_Flahertyhttp://en.wikipedia.org/wiki/Income_trust#Canadahttp://en.wikipedia.org/wiki/Income_trust#Canadahttp://en.wikipedia.org/wiki/Capital_Cost_Allowancehttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Capital_%28economics%29http://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Progressive_taxationhttp://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/World_War_II


8/93

8

Canada Tax GuidePersonal income taxesCanada levies personal income tax on the worldwide income of individuals'

resident in Canada and on certain types of Canadian-source income earned bynon-resident individuals.After the calendar year, Canadian residents file a T-1 Tax and Benefit Returnfor individuals. It is due April 30, or June 15 for self-employed individuals andtheir spouses, or common-law partners. It is important to note, however, thatany balance owing is due on or before April 30. Outstanding balances remittedafter April 30 may be subject to interest charges; regardless of whether thetaxpayer's filing due date is April 30 or June 15.The amount of income tax that an individual must pay is based on the amount of

their taxable income (income earned less allowed expenses) for the tax year.Personal income tax may be collected through various means:1. Deduction at source - where income tax is deducted directly from an

individual's pay and sent to the CRA.2. Instalment payments - where an individual must pay his or her estimated

taxes during the year instead of waiting to settle up at the end of the year.3. payment on filing - payments made with the income tax return4. arrears payments - payments made after the return is filed

Employers may also deductCanada Pension Plan/Quebec Pension Plan(CPP/QPP) contributions,Employment Insurance(EI) and Provincial ParentalInsurance (PPIP) premiums from their employees' gross pay. Employers thensend these deductions to the taxing authority.Individuals who have overpaid taxes or had excess tax deducted at source willreceive a refund from the CRA upon filing their annual tax return.Generally, personal income tax returns for a particular year must be filed withCRA on or before April 30 of the following year.

Basic calculationAn individual taxpayer must report his or her total income for the year. Certaindeductions are allowed in determining net income, such as deductions forcontributions toRegistered Retirement Savings Plans, union and professionaldues, child care expenses, and business investment losses. Net income is usedfor determining several income-tested social benefits provided by the federaland provincial/territorial governments. Further deductions are allowed indetermining taxable income, such as capital losses, half of capital gainsincluded in income, and a special deduction for residents of northern Canada.Deductions permit certain amounts to be excluded from taxation altogether.Tax payable before credits is determined using four tax brackets and tax rates. Non-refundable tax credits are then deducted from tax payable before credits for
http://en.wikipedia.org/wiki/Canada_Pension_Planhttp://en.wikipedia.org/wiki/Employment_Insurancehttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Employment_Insurancehttp://en.wikipedia.org/wiki/Canada_Pension_Plan


9/93

9

various items such as a basic personal amount, dependents, Canada/QuebecPension Plan contributions, Employment Insurance premiums, disabilities,tuition and education and medical expenses. These credits are calculated bymultiplying the credit amount (e.g., the basic personal amount of $11,038 in

2014) by the lowest tax rate. This mechanism is designed to provide equal benefit to taxpayers regardless of the rate at which they pay tax.A non-refundable tax credit for charitable donations is calculated at the lowesttax rate for the first $200 in a year, and at the highest tax rate for the portion inexcess of $200. This tax credit is designed to encourage more generouscharitable giving.Certain other tax credits are provided to recognize tax already paid so that theincome is not taxed twice:

The dividend tax credit provides recognition of tax paid at the corporatelevel on income distributed from a Canadian corporation to individualshareholders; and

The foreign tax credit recognizes tax paid to a foreign government onincome earned in a foreign country.

Provincial and territorial personal income taxesProvinces and territories that have entered into tax collection agreements withthe federal government for collection of personal income taxes ("agreeing provinces", i.e., all provinces and territories except Quebec) must use the

federal definition of "taxable income" as the basis for their taxation. This meansthat they are not allowed to provide or ignore federal deductions in calculatingthe income on which provincial tax is based.Provincial and territorial governments provide both non-refundable tax creditsand refundable tax credits to taxpayers for certain expenses. They may alsoapply surtaxes and offer low-income tax reductions.Canada Revenue Agency collects personal income taxes for agreeing provinces/territories and remits the revenues to the respective governments. The provincial/territorial tax forms are distributed with the federal tax forms and thetaxpayer need make only one payment -- to CRA -- for both types of tax.Similarly, if a taxpayer is to receive a refund, he or she receives one cheque or bank transfer for the combined federal and provincial/territorial tax refund.Information on provincial rates can be found on the Canada Revenue Agency'ssite.
http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html


10/93

10

QuebecQuebec administers its own personal income tax system, and therefore is free todetermine its own definition of taxable income. To maintain simplicity fortaxpayers, however, Quebec parallels many aspects of and uses manydefinitions found in the federal tax system.

Personal federal marginal tax ratesThe following historical federal marginal tax ratesof the Government of Canadacome from the website of theCanada Revenue Agency. They do not includeapplicable provincial income taxes. Data on marginal tax rates from 1998 to2006 are publicly available. Data on basic personal amounts (personalexemption taxed at 0%) can be found on a year by year basis is also available.Their values are contained on line 300 of either the document "Schedule 1 -Federal Tax", or "General Income Tax and Benefit Guide", of each year by yearGeneral Income Tax and Benefit Package listed.
http://en.wikipedia.org/wiki/Marginal_tax_ratehttp://en.wikipedia.org/wiki/Canada_Revenue_Agencyhttp://en.wikipedia.org/wiki/Canada_Revenue_Agencyhttp://en.wikipedia.org/wiki/Marginal_tax_rate


11/93

11

Canadian federal marginal tax rates of taxable income 1998-2014

2014$0-$10822 $10,822-$43,561 $43,562-$87,123 $87,123-$135,054 Over $135,054

0% %15 %22 %26 %29

2013$0-$10822 $10,822-$43,561 $43,562-$87,123 $87,123-$135,054 Over $135,054

0% %15 %22 %26 %29

2012

$0 - $10,527 $10,527 - $42,707 $42,707- $85,414 $85,414-132,406$128,800

over $132,406

0% %15 %22 %26 %29

2011$0 - $10,527 $10,527 - $41,544 $41,544 - $83,088 $81,941 $128,800 over $128,800

0% %15 %22 %26 %29

2010 $0 - $10,382 $10,382 - $40,970 $40,970 - $81,941 $81,941 $127,021 over $127,0210% %15 %22 %26 %29

2009 $0 - $10,320 $10,321 - $40,726 $40,727 - $81,452 $81,453 - $126,264 over $126,264

0% 15% 22% 26% 29%

2008$0 - $9,600 $9,601 - $37,885 $37,886 - $75,769 $75,770 - $123,184 over $123,184

0% 15% 22% 26% 29%

2007$0 - $9,600 $9,600 - $37,178 $37,178 - $74,357 $74,357 - $120,887 over $120,887

0% 15% 22% 26% 29%

2006$0 - $8,839 $8,839 - $36,378 $36,378 - $72,756 $72,756 - $118,285 over $118,285

0% 15.25% 22% 26% 29%

2005$0 - $8,648 $8,648 - $35,595 $35,595 - $71,190 $71,190 - $115,739 over $115,739

0% 15% 22% 26% 29%

2004$0 - $8,012 $8,012 - $35,000 $35,000 - $70,000 $70,000 - $113,804 over $113,804

0% 16% 22% 26% 29%

2003$0 - $7,756 $7,756 - $32,183 $32,183 - $64,368 $64,368 - $104,648 over $104,648

0% 16% 22% 26% 29%

2002

$0 - $7,634 $7,634 - $31,677 $31,677 - $63,354 $63,354 - $103,000 over $103,000

0% 16% 22% 26% 29%

2001$0 - $7,412 $7,412 - $30,754 $30,754 - $61,509 $61,509 - $100,000 over $100,000

0% 16% 22% 26% 29%

2000$0 - $7,231 $7,231 - $30,004 $30,004 - $60,009 over $60,009

0% 17% 25% 29%

1999$0 - $6,794 $6,794 - $29,590 $29,590 - $59,180 over $59,180

0% 17% 26% 29%

1998$0 - $6,794 $6,794 - $29,590 $29,590 - $59,180 over $59,180

0% 17% 26% 29%


12/93

12

Income not taxedThe following types of income are not taxed in Canada (this list is notexhaustive):

gifts and inheritances; lottery winnings; winnings from betting or gambling for simple recreation or enjoyment; strike pay; compensation paid by a province or territory to a victim of a criminal act

or a motor vehicle accident*; certain civil and military service pensions; income from certain international organizations of which Canada is a

member, such as the United Nations and its agencies; war disability pensions; RCMP pensions or compensation paid in respect of injury, disability, or

death; income of First Nations, if situated on a reserve; capital gain on the sale of a taxpayers principal residence; provincial child tax credits or benefits and Qubec family allowances; Working income tax benefit; the Goods and Services Taxor Harmonized Sales Taxcredit (GST/HST

credit) or Quebec Sales Tax credit; and The Canada Child Tax Benefit.

Note that the method by which these forms of income are not taxed can varysignificantly, which may have tax and other implications; some forms of incomeare not declared, while others are declared and then immediately deducted infull. In certain cases, the deduction may require off-setting income, while inother cases; the deduction may be used without corresponding income. Incomewhich is declared and then deducted, for example, may create room for futureRegistered Retirement Savings Plan deductions. But then the RRSP contribution

room may be reduced with a pension adjustment if you are part of another plan,reducing the ability to use RRSP contributions as a deduction.Deductions which are not directly linked to non-taxable income exist, whichreduce overall taxable income. A key example is Registered Retirement SavingsPlan (RRSP) contributions, which is a form of tax-deferred savings account(income tax is paid only at withdrawal, and no interim tax is payable on accountearnings).*Quebec has changed its rules in 2004 and, legally, this may be taxed or maynot Courts have yet to rule.
http://en.wikipedia.org/wiki/First_Nationshttp://en.wikipedia.org/wiki/Goods_and_Services_Tax_(Canada)http://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Canada_Child_Tax_Benefithttp://en.wikipedia.org/wiki/Canada_Child_Tax_Benefithttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Goods_and_Services_Tax_(Canada)http://en.wikipedia.org/wiki/First_Nations


13/93

13

Corporate income taxesCorporate taxes include taxes on corporate income in Canada and other taxesand levies paid by corporations to the various levels of government in Canada.These include capital and insurance premium taxes; payroll levies (e.g.,employment insurance, Canada Pension Plan, Quebec Pension Plan andWorkers' Compensation); property taxes; and indirect taxes, such as goods andservices tax (GST), and sales and excise taxes, levied on business inputs.Corporations are subject to tax in Canada on their worldwide income if they areresident in Canada for Canadian tax purposes. Corporations not resident inCanada are subject to Canadian tax on certain types of Canadian source income(Section 115 of the Canadian Income Tax Act).The taxes payable by a Canadian resident corporation may be impacted by thetype of Corporation that it is:

A Canadian-controlled private corporation, which is defined as acorporation that is: resident in Canada and either incorporated in Canada or resident in

Canada from June 18, 1971, to the end of the taxation year; not controlled directly or indirectly by one or more non-resident persons;

not controlled directly or indirectly by one or more publiccorporations (other than a prescribed venture capital corporation, asdefined in Regulation 6700);

not controlled by a Canadian resident corporation that lists itsshares on a prescribed stock exchange outside of Canada;

not controlled directly or indirectly by any combination of personsdescribed in the three preceding conditions; if all of its shares thatare owned by a non-resident person, by a public corporation (otherthan a prescribed venture capital corporation), or by a corporationwith a class of shares listed on a prescribed stock exchange, wereowned by one person, that person would not own sufficient sharesto control the corporation; and

No class of its shares of capital stock is listed on a prescribed stockexchange.

A private corporation, which is defined as a corporation that is: resident in Canada; not a public corporation; not controlled by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation6700);

not controlled by one or more prescribed federal Crowncorporations (as defined in Regulation 7100); and

Not controlled by any combination of corporations described in thetwo preceding conditions.


14/93

14

A public corporation, defined as a corporation that is resident in Canadaand meets either of the following requirements at the end of the taxationyear:

it has a class of shares listed on a prescribed Canadian stock

exchange; or It has elected, or the Minister of National Revenue has designatedit, to be a public corporation and the corporation has complied with prescribed conditions under Regulation 4800(1) on the number ofits shareholders, the dispersing of the ownership of its shares, the public trading of its shares, and the size of the corporation.

If a public corporation has complied with certain prescribed conditions underRegulation 4800(2), it can elect, or the Minister of National Revenue candesignate it, not to be a public corporation. Other types of Canadian residentcorporations include Canadian subsidiaries of public corporations (which do notqualify as public corporations), general insurers and Crown corporations.

Provincial/territorial corporate income taxesCorporate income taxes are collected by the CRA for all provinces andterritories except Ontario, Quebec and Alberta. Provinces and territories subjectto a tax collection agreement must use the federal definition of "taxableincome," i.e., they are not allowed to provide deductions in calculating taxableincome. These provinces and territories may provide tax credits to companies;

often in order to provide incentives for certain activities such as miningexploration, film production, and job creation.Ontario, Quebec and Alberta collect their own corporate income taxes, andtherefore may develop their own definitions of taxable income. In practice,these provinces rarely deviate from the federal tax base in order to maintainsimplicity for taxpayers.Ontario has concluded negotiations with the federal government on a taxcollection agreement under which its corporate income taxes would be collectedon its behalf by the CRA starting in 2009.

Integration of corporate and personal income taxesIn Canada, corporate income is subject to corporate income tax and, ondistribution as dividends to individuals, personal income tax. The personalincome tax system, through the gross-up and dividend tax credit (DTC)mechanisms, currently provides recognition for corporate taxes, based on a 20 per cent notional federal-provincial rate, to taxable individuals resident inCanada.Because of tax policy issues relating to the proliferation of publicly tradedincome trusts, the federal government has proposed to introduce an enhanced


15/93

15

gross-up and DTC for eligible dividends received by eligible shareholders. Aneligible dividend will be grossed-up by 45 per cent, meaning that theshareholder includes 145 per cent of the dividend amount in income. The DTCin respect of eligible dividends will be 19 per cent, based on the expected

federal corporate tax rate in 2010. The existing gross-up and tax credit willcontinue to apply to other dividends. Eligible dividends will generally includedividends paid after 2005 by public corporations (and other corporations thatare not Canadian-controlled private corporations) that are resident in Canadaand subject to the general corporate income tax rate.

AdministrationFederal taxes are collected by theCanada Revenue Agency(CRA), formerlyknown as "Revenue Canada" or the "Canada Customs and Revenue Agency".Under "Tax Collection Agreements", CRA collects and remits to the provinces:

Provincial personal income taxes on behalf of all provinces exceptQuebec, so that individuals outside of Quebec file only one set of taxforms each year for their federal and provincial income taxes.

Corporate taxes on behalf of all provinces except Quebec and Alberta.The Ministre du revenu du Qubec collects the GST in Quebec on behalf of thefederal government, and remits it to Ottawa.The provincial governments of Nova Scotia, New Brunswick and Newfoundland and Labrador no longer impose a provincial sales tax and in

those provinces the federal government collects goods and services tax at a rate8% higher than in the other provinces. The additional revenue from this"harmonized sales tax" is paid by the federal government to the threeharmonizing provinces.

Income taxesPersonal income taxesBoth the federal and provincial governments have imposedincome taxesonindividuals, and these are the most significant sources of revenue for thoselevels of government accounting for over 40% of tax revenue. The federalgovernment charges the bulk of income taxes with the provinces charging asomewhat lower percentage. Income taxes throughout Canada are progressivewith the high income residents paying a higher percentage than the low incomeresidents.Where income is earned in the form of acapital gain, only half of the gain isincluded in income for tax purposes; the other half is not taxed.Federal and provincial income tax rates are shown at Canada Revenue Agency'swebsite.
http://en.wikipedia.org/wiki/Canada_Revenue_Agencyhttp://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/Progressive_taxationhttp://en.wikipedia.org/wiki/Capital_gainhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.htmlhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Progressive_taxationhttp://en.wikipedia.org/wiki/Income_taxhttp://en.wikipedia.org/wiki/Canada_Revenue_Agency


16/93

16

Personal income tax can be deferred in aRegistered Retirement Savings Plan(RRSP) and tax sheltered savings accounts (which may include mutual fundsand other financial instruments) that are intended to help individuals save fortheir retirement.

Corporate taxesCompanies and corporations pay tax on profit income and oncapital. Thesemake up a relatively small portion of total tax revenue. Tax is paid on corporateincome at the corporate level before it is distributed to individual shareholdersas dividends. A tax credit is provided to individuals who receive dividend toreflect the tax paid at the corporate level. This credit does not eliminate doubletaxation of this income completely, however, resulting in a higher level of taxon dividend income than other types of income. (Where income is earned in theform of acapital gain, only half of the gain is included in income for tax purposes; the other half is not taxed.) Corporations may deduct the cost ofcapital following capital cost allowanceregulations.Starting in 2002, several large companies converted into "income trusts" inorder to reduce or eliminate their income tax payments, making the trust sectorthe fastest-growing in Canadaas of 2005. Conversions were largely halted onOctober 31, 2006, when Finance MinisterJim Flahertyannounced that newincome trusts would be subject to a tax system similar to that of corporations,and that these rules would apply to existing income trusts after 2011.

Sales taxes in CanadaIn Canadathere are three types of sales taxes: provincial sales taxes or PST, thefederal Goods and Services Tax orGST, and the Harmonized Sales Tax orHST. Every province exceptAlberta implements a Provincial Sales Tax or theHarmonized Sales Tax. TheYukon, Northwest Territoriesand Nunavutdo nothave any type of regional sales tax. The federal GST rate is 5% effective

January 1, 2008. Goods & Services Tax Harmonized Sales Tax Provincial Sales Taxes

Goods & Services TaxThe federal government's sales tax is a value-added tax.

Harmonized Sales Tax

The Harmonized Sales Tax (HST) is used in certain provinces to combine thefederal Goods and Services Tax (GST) and the Provincial Sales Tax (PST) into
http://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Capital_Cost_Allowancehttp://en.wikipedia.org/wiki/Income_trust#Canadahttp://en.wikipedia.org/wiki/Jim_Flahertyhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Sales_taxhttp://en.wikipedia.org/wiki/Goods_and_Services_Tax_(Canada)http://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Albertahttp://en.wikipedia.org/wiki/Yukonhttp://en.wikipedia.org/wiki/Northwest_Territorieshttp://en.wikipedia.org/wiki/Nunavuthttp://en.wikipedia.org/wiki/January_1http://en.wikipedia.org/wiki/2008http://en.wikipedia.org/wiki/Sales_taxes_in_Canada#Goods_.26_Services_Taxhttp://en.wikipedia.org/wiki/Sales_taxes_in_Canada#Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Sales_taxes_in_Canada#Provincial_Sales_Taxeshttp://en.wikipedia.org/wiki/Value-added_taxhttp://en.wikipedia.org/wiki/Value-added_taxhttp://en.wikipedia.org/wiki/Sales_taxes_in_Canada#Provincial_Sales_Taxeshttp://en.wikipedia.org/wiki/Sales_taxes_in_Canada#Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Sales_taxes_in_Canada#Goods_.26_Services_Taxhttp://en.wikipedia.org/wiki/2008http://en.wikipedia.org/wiki/January_1http://en.wikipedia.org/wiki/Nunavuthttp://en.wikipedia.org/wiki/Northwest_Territorieshttp://en.wikipedia.org/wiki/Yukonhttp://en.wikipedia.org/wiki/Albertahttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Goods_and_Services_Tax_(Canada)http://en.wikipedia.org/wiki/Sales_taxhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Jim_Flahertyhttp://en.wikipedia.org/wiki/Income_trust#Canadahttp://en.wikipedia.org/wiki/Capital_Cost_Allowancehttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Capital_(economics)http://en.wikipedia.org/wiki/Registered_Retirement_Savings_Plan


17/93

17

a single, blended, sales tax. Currently, there is a 13% HST in the provinces of New Brunswick, Newfoundland, and Nova Scotia. The HST is collected by theCanada Revenue Agency, which then remits the appropriate amounts to the participating provinces. Like the GST, the HST is value-added. Effective July 1,

2010 British Columbia and Ontario will adopt HST replacing their current PSTat 12% and 13% respectively. Note that Effective April 1, 2013, BC's 12% HSTwill be replaced by the GST and the PST. As a result, the BC basic personalamount tax credit will be reduced for 2013 (eliminating the increase that wasdone due to the implementation of the HST), the quarterly HST credit will beeliminated, and the refundable Sales Tax Credit will be reintroduced.

Annual revenue from taxable sales

report annually

More than $1.5M up to $6M: report quarterlyMore than $6M: report monthly

If you wish to change your reporting period, perhaps because your business uses accounting periods that are not monthly or quarterly, you must notify the Canada Revenue Agency.

Provincial Sales TaxesSeparate Provincial Sales Taxes (PST) are collected in the provinces of British

Columbia, Saskatchewan, Manitoba, Ontario, Quebec(calledQST for QuebecSales Tax, in FrenchTVQ, Taxes des Ventes du Qubec ), and Prince EdwardIsland. Goods to which the tax is applied varies by province, as does the rate.Moreover, for those provinces whose provincial sales tax is applied to thecombined cost and GST, provincial revenues decline or increase with respectivechanges in the GST. Of the provincial sales taxes, only the QST (and the HST)are value-added; the rest are cascadingtaxes.

Province Rate(%)Combined fed./prov. rate (%) Note

British Columbia 7 12

food, fuel, children's sized clothes and footwear aswell as some other items and service are exempted (seeSales taxes in British Columbiafor more detail) Alcohol is taxed at 10%. Passenger vehicles are taxed at between 7% to 10%

based on purchase price. Harmonized Sales Taxtakes effect on July 1, 2010.

Alberta 0 5 Alberta has no provincial sales tax. There is a 4% taxon lodging.

Saskatchewan 5 10

Reduced from 7% on 28 October 2006

There is a separate 10% liquor consumption tax. Thenon-alcoholic portion of a restaurant meal is not taxed.
http://en.wikipedia.org/wiki/New_Brunswickhttp://en.wikipedia.org/wiki/Newfoundland_and_Labradorhttp://en.wikipedia.org/wiki/Nova_Scotiahttp://en.wikipedia.org/wiki/Canada_Revenue_Agencyhttp://en.wikipedia.org/wiki/Value-addedhttp://en.wikipedia.org/wiki/British_Columbiahttp://en.wikipedia.org/wiki/British_Columbiahttp://en.wikipedia.org/wiki/Saskatchewanhttp://en.wikipedia.org/wiki/Manitobahttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/QSThttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/Value-addedhttp://en.wikipedia.org/wiki/Cascade_taxhttp://en.wikipedia.org/wiki/British_Columbiahttp://en.wikipedia.org/wiki/Sales_taxes_in_British_Columbiahttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Albertahttp://en.wikipedia.org/wiki/Saskatchewanhttp://en.wikipedia.org/wiki/Saskatchewanhttp://en.wikipedia.org/wiki/Albertahttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Sales_taxes_in_British_Columbiahttp://en.wikipedia.org/wiki/British_Columbiahttp://en.wikipedia.org/wiki/Cascade_taxhttp://en.wikipedia.org/wiki/Value-addedhttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/QSThttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Manitobahttp://en.wikipedia.org/wiki/Saskatchewanhttp://en.wikipedia.org/wiki/British_Columbiahttp://en.wikipedia.org/wiki/British_Columbiahttp://en.wikipedia.org/wiki/Value-addedhttp://en.wikipedia.org/wiki/Canada_Revenue_Agencyhttp://en.wikipedia.org/wiki/Nova_Scotiahttp://en.wikipedia.org/wiki/Newfoundland_and_Labradorhttp://en.wikipedia.org/wiki/New_Brunswick


18/93

18

Manitoba 7 12

Ontario 8 13

PST is usually 8%, but is 5% on lodging, 10% onentertainment and alcohol at restaurants and 12% onalcohol at retail stores on top of the flat LCBOliquormark-ups. Harmonized Sales Taxtakes effect on July 1, 2010.

Quebec 7.5 12.875 Provincial rate is nominally 7.5%, but also applied tofederal 5% GST. Effectively 7.875%Prince EdwardIsland 10 15.5

Provincial rate is nominally 10%, but also applied tofederal 5% GST. Effectively 10.5%

New Brunswick 13 Harmonized Sales Taxincludes provincial tax and

GSTNova Scotia 13Newfoundland andLabrador 13

GST/HST ratesThe GST is a tax that applies on most supplies of goods and services made inCanada. The GST also applies to supplies of real property (for example, land, buildings and interests in such property) and intangible property such astrademarks, rights to use a patent, and digitized products downloaded from theInternet and paid for individually.The participating provinces (Nova Scotia, New Brunswick, and Newfoundlandand Labrador) harmonized their provincial sales tax with the GST to implementthe HST. Generally, the HST applies to the same base of goods and services asthe GST. As of July 1, 2010, Ontario harmonized its retail sales tax with theGST to implement the HST and British Columbia harmonized its provincialsales tax with the GST to implement the HST. Also, as of July 1, 2010, NovaScotia increased its HST rate from 13% to 15%. For information see NovaScotia HST rate increase.In Quebec, Revenue Qubec administers the GST/HST. If your business islocated in Quebec, visit the Revenu Qubec Web site.

The HST breakdown: The HST rate of 12% includes the 5% federal part and 7% provincial part. The HST rate of 13% includes the 5% federal part and 8% provincial part. The HST rate of 15%* includes the 5% federal part and 10% provincial part.

(As of July 1, 2010) The HST rate of 14% includes the 6% federal part and 8% provincial part.

The HST rate of 15% includes the 7% federal part and 8% provincial part.
http://en.wikipedia.org/wiki/Manitobahttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/LCBOhttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/New_Brunswickhttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/Nova_Scotiahttp://en.wikipedia.org/wiki/Newfoundland_and_Labradorhttp://en.wikipedia.org/wiki/Newfoundland_and_Labradorhttp://en.wikipedia.org/wiki/Newfoundland_and_Labradorhttp://en.wikipedia.org/wiki/Newfoundland_and_Labradorhttp://en.wikipedia.org/wiki/Nova_Scotiahttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/New_Brunswickhttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/Prince_Edward_Islandhttp://en.wikipedia.org/wiki/Quebechttp://en.wikipedia.org/wiki/Harmonized_Sales_Taxhttp://en.wikipedia.org/wiki/LCBOhttp://en.wikipedia.org/wiki/Ontariohttp://en.wikipedia.org/wiki/Manitoba


19/93

19

GST/HST Rates

Provincial On or afterJuly 1, 2010

On or afterJanuary 1,2008, and

before July1, 2010

BeforeJanuary 1,2008, and

after June 30,2006

On or afterApril 1, 1997,

and before

July 1, 2006

BeforeApril 1,

1997

Alberta 5% 5% 6% 7% 7%

British Columbia 12% 5% 6% 7% 7%

Manitoba 5% 5% 6% 7% 7%

New Brunswick 13% 13% 14% 15% 7%

Newfoundland and Labrador 13% 13% 14% 15% 7%

Northwest Territories 5% 5% 6% 7% 7%

Nova Scotia 15%* 13% 14% 15% 7%

Nunavut 5% 5% 6% 7% 7%Ontario 13% 5% 6% 7% 7%

Prince Edward Island 5% 5% 6% 7% 7%

Saskatchewan 5% 5% 6% 7% 7%

Yukon 5% 5% 6% 7% 7%


20/93

20

Property taxesThe municipal level of government is funded largely by property taxesonresidential, industrial and commercial properties. These account for about ten percent of total taxation in Canada.

Excise taxesBoth the federal and provincial governments impose excise taxes oninelasticgoods such ascigarettes, gasoline, alcohol, and for vehicleair conditioners. Agreat bulk of the retail price of cigarettes and alcohol are excise taxes. Thevehicle air conditioner tax is currently set at $100 per air conditioning unit.Canada has some of the highest rates of taxes on cigarettes and alcohol in theworld. These are sometimes referred to as sin taxes.

Payroll taxesOntario levies a payroll tax on employers, the "Employer Health Tax", of 1.95%of payroll. Eligible employers are exempt on the first $400,000 of payroll. Thistax was designed to replace revenues lost when health insurance premiums,which were often paid by employers for their employees, were eliminated in1989.Quebec levies a similar tax called the "Health Services Fund". For those whoare employees, the amount is paid by employers as part of payroll. For thosewho are not employees such as pensioners and self-employed individuals, theamount is paid by the taxpayer.Premiums for theEmployment Insurancesystem and theCanada Pension Planare paid by employees and employers. Premiums forWorkers' Compensationare paid by employers. These premiums account for 12% of governmentrevenues. These premiums are not considered to be taxes because they createentitlements for employees to receive payments from the programs, unliketaxes, which are used to fund government activities. The funds collected by theCanada Pension Plan and by the Employment Insurance are in theory separatedfrom the general fund. It should be noted that Unemployment Insurance was

renamed to Employment Insurance to reflect the increased scope of the planfrom its original intended purpose.Employment Insuranceis unlike private insurance because the individual'syearly income impacts the received benefit. Unlike private insurance, the benefits are treated as taxable earnings and if the individual had a mid to highincome for the year, they could have to repay up to the full benefit received.
http://en.wikipedia.org/wiki/Property_taxhttp://en.wikipedia.org/wiki/Elasticity_(economics)http://en.wikipedia.org/wiki/Cigarettehttp://en.wikipedia.org/wiki/Gasolinehttp://en.wikipedia.org/wiki/Alcoholhttp://en.wikipedia.org/wiki/Air_conditionershttp://en.wikipedia.org/wiki/Sin_taxhttp://en.wikipedia.org/wiki/Employment_Insurancehttp://en.wikipedia.org/wiki/Canada_Pension_Planhttp://en.wikipedia.org/wiki/Workers%27_Compensationhttp://en.wikipedia.org/wiki/Employment_Insurancehttp://en.wikipedia.org/wiki/Employment_Insurancehttp://en.wikipedia.org/wiki/Workers%27_Compensationhttp://en.wikipedia.org/wiki/Canada_Pension_Planhttp://en.wikipedia.org/wiki/Employment_Insurancehttp://en.wikipedia.org/wiki/Sin_taxhttp://en.wikipedia.org/wiki/Air_conditionershttp://en.wikipedia.org/wiki/Alcoholhttp://en.wikipedia.org/wiki/Gasolinehttp://en.wikipedia.org/wiki/Cigarettehttp://en.wikipedia.org/wiki/Elasticity_(economics)http://en.wikipedia.org/wiki/Property_tax


21/93


22/93

22

International comparison (personal income tax)Comparison of taxes paid by a household earning the country's average wage (as of 2005)

Country

Single

nochildren

Married2 children Country

Singleno children

Married2 children

Australia 28.3% 16.0% Korea 17.3% 16.2%

Austria 47.4% 35.5% Luxembourg 35.3% 12.2%

Belgium 55.4% 40.3% Mexico 18.2% 18.2%

Canada 31.6% 21.5% Netherlands 38.6% 29.1%

Czech Republic 43.8% 27.1% New Zealand 20.5% 14.5%

Denmark 41.4% 29.6% Norway 37.3% 29.6%

Finland 44.6% 38.4% Poland 43.6% 42.1%

France 50.1% 41.7% Portugal 36.2% 26.6%

Germany 51.8% 35.7% Slovak Republic 38.3% 23.2%

Greece 38.8% 39.2% Spain 39.0% 33.4%

Hungary 50.5% 39.9% Sweden 47.9% 42.4%

Iceland 29.0% 11.0% Switzerland 29.5% 18.6%

Ireland 25.7% 8.1% Turkey 42.7% 42.7%

Italy 45.4% 35.2% United Kingdom 33.5% 27.1%

Japan 27.7% 24.9% United States 29.1% 11.9%

Source: OECD, 2005 data


23/93

23

Worldwide Ranking of Cost of Living Survey 2011-2012

March 2012 March 2011 City Country

1 2 TOKYO JAPAN

2 1 LUANDA ANGOLA

3 6 OSAKA JAPAN

4 4 MOSCOW RUSSIA

5 5 GENEVA SWITZERLAND

6 7 ZURICH SWITZERLAND

6 8 SINGAPORE SINGAPORE

8 3 N'DJAMENA CHAD

9 9 HONG KONG HONG KONG

10 11 NAGOYA JAPAN

11 14 SYDNEY AUSTRALIA

12 10 SO PAULO BRAZIL

13 12 RIO DE JANEIRO BRAZIL

14 16 BERN SWITZERLAND

15 21 MELBOURNE AUSTRALIA16 21 SHANGHAI CHINA

17 20 BEIJING CHINA

18 15 OSLO NORWAY

19 30 PERTH AUSTRALIA

20 12 LIBREVILLE GABON

21 17 COPENHAGEN DENMARK

22 19 SEOUL SOUTH KOREA23 34 CANBERRA AUSTRALIA

24 31 BRISBANE AUSTRALIA

25 18 LONDON UNITED KINGDOM

26 44 KHARTOUM SUDAN

27 46 ADELAIDE AUSTRALIA

28 29 ST. PETERSBURG RUSSIA

29 51 CARACAS VENEZUELA


24/93

24

March 2012 March 2011 City Country

30 43 SHENZHEN CHINA

31 24 TEL AVIV ISRAEL

31 38 GUANGZHOU CHINA33 32 NEW YORK CITY, NY UNITED STATES

34 23 NIAMEY NIGER

35 70 YANGON MYANMAR

36 61 KINSHASA DEM. REP. OF THE CONGO

37 27 PARIS FRANCE

38 25 MILAN ITALY

39 41 LAGOS NIGERIA

39 63 BAMAKO MALI

41 67 ABIDJAN CTE D'IVOIRE

42 34 ROME ITALY

43 55 BRAZZAVILLE CONGO

44 39 DJIBOUTI DJIBOUTI

45 33 BRASILIA BRAZIL

46 39 STOCKHOLM SWEDEN

47 37 NOUMA NEW CALEDONIA

48 36 VIENNA AUSTRIA

49 48 BAKU AZERBAIJAN

50 25 VICTORIA SEYCHELLES

50 44 DAKAR SENEGAL

Source: http://www.mercer.ca/press-releases/cost-of-living-rankings?siteLanguage=1007


25/93

25

Non-Taxable Employment Benefits Include: Contributions to a registered pension plan (RPP) or deferred profitsharing plan (DPSP),

Employer contributions to a group sickness or accident insurance plan, Contributions to a private health insurance plan (except Quebec), Contributions to a supplementary unemployment insurance plan, Counselling services related to mental or physical health, termination, orretirement,

Discounts on purchases of merchandise for personal use, Commissions received on personal purchases for your personal use (forexample, if you sell life insurance and you buy a policy from youremployer and receive a commission).

Subsidized meals,

The cost of free or subsidized school for you children if the services are provided in a remote area, Distinctive uniforms and special clothing required for your employment, Transportation to your place of employment if provided directly by youremployer,

The use of your employers recreational facilities, Transportation passes for bus, rail, and airline employees (airlineemployees standby fare only),

Recreational facility dues if such membership is required and benefitsyour employer (the expense is not deductible to the employer however),

Two non-cash gifts with a combined value of less than $500 to markevents such as holidays, birthdays and special occasions,

Non-cash incentive awards of up to $500 to mark achievements such aslength of service or safety standard awards,

Home computers if it primarily benefits your employer and is available toall employees in the same class,

Tuition and education fees for courses taken to maintain or improve yourskills to maintain for potential future responsibilities,

Moving expenses to relocate you to a new work-related location(however, loan assistance or reimbursements to finance a new residenceare taxable benefits),

Fees for business related courses such as stress management or languageskills courses, and

Reasonable business trip expenses. Note: If you employer contributes to a sickness accident or disabilityinsurance plan, or an income maintenance insurance plan, any benefitsyou receive are taxable but will be reduced by any of your premiums paidinto the plan.


26/93

26

Canada Pension Plan

History Contributions and Benefits CPP Investment Board

3.1 Socially Responsible Investing 3.2 Future and Direction 3.3 Growth and Strategy 3.4 Performance

Quebec Pension Plan (QPP) References External links

HistoryThe Canada Pension Plan (CPP) is a contributory, earnings-relatedsocialinsurance program. It forms one of the two major components ofCanada's publicretirementincome system, the other component beingOld Age Security(OAS). Other parts of Canada's retirement system are private pensions, eitheremployer-sponsored or from tax-free individual savings (known in Canada as aRegistered Retirement Savings Plan).The CPP program mandates all employed Canadians who are 18 years of ageand over to contribute a prescribed portion of their earnings income to anationally administered pension plan. The plan is administered byHumanResources and Social Development Canadaon behalf of employees in all provinces and territoriesexcept Quebec, which operates an equivalent plan, theQuebec Pension Plan. Changes to the CPP require the approval of at least 2/3 ofCanadian provinces representing at least 2/3 of the country's population. Inaddition, under section 94A of the Canadian Constitution, pensions are a provincial responsibility, so any province may establish a plan anytime.Lester Bowles Pearsonoversaw the implementation of the CPP as PrimeMinister.

The CPP is funded on a "steady-state" basis, with its current contribution rateset so that it will remain constant for the next 75 years, by accumulating areserve fund sufficient to stabilize the asset/expenditure and funding ratios overtime. Such a system is a hybrid between a fully funded one and a " pay-as-you-go" plan. In other words, assets held in the CPP fund are by themselvesinsufficient to pay for all future benefits accrued to date but sufficient to preventcontributions from rising any further. While a sustainable path for this particular plan, it is not typical of other public or private sector pension plans. A study published in April 2007 by the CPP's chiefactuary showed that this type of

funding method is "robust and appropriate" given reasonable assumptions aboutfuturere conditions. The chief actuary submits a report to Parliamentevery three
http://en.wikipedia.org/wiki/Canada_Pension_Plan#Historyhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Contributions_and_Benefitshttp://en.wikipedia.org/wiki/Canada_Pension_Plan#CPP_Investment_Boardhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Socially_Responsible_Investinghttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Future_and_Directionhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Growth_and_Strategyhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Performancehttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Quebec_Pension_Plan_.28QPP.29http://en.wikipedia.org/wiki/Canada_Pension_Plan#Referenceshttp://en.wikipedia.org/wiki/Canada_Pension_Plan#External_linkshttp://en.wikipedia.org/wiki/Social_insurancehttp://en.wikipedia.org/wiki/Social_insurancehttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Retirementhttp://en.wikipedia.org/wiki/Old_Age_Securityhttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Human_Resources_and_Social_Development_Canadahttp://en.wikipedia.org/wiki/Human_Resources_and_Social_Development_Canadahttp://en.wikipedia.org/wiki/Provinces_and_territories_of_Canadahttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Quebec_Pension_Plan_.28QPP.29http://en.wikipedia.org/wiki/Lester_Bowles_Pearsonhttp://en.wikipedia.org/wiki/Pay-as-you-gohttp://en.wikipedia.org/wiki/Pay-as-you-gohttp://en.wikipedia.org/wiki/Actuaryhttp://en.wikipedia.org/wiki/Parliament_of_Canadahttp://en.wikipedia.org/wiki/Parliament_of_Canadahttp://en.wikipedia.org/wiki/Actuaryhttp://en.wikipedia.org/wiki/Pay-as-you-gohttp://en.wikipedia.org/wiki/Pay-as-you-gohttp://en.wikipedia.org/wiki/Lester_Bowles_Pearsonhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Quebec_Pension_Plan_.28QPP.29http://en.wikipedia.org/wiki/Provinces_and_territories_of_Canadahttp://en.wikipedia.org/wiki/Human_Resources_and_Social_Development_Canadahttp://en.wikipedia.org/wiki/Human_Resources_and_Social_Development_Canadahttp://en.wikipedia.org/wiki/Registered_Retirement_Savings_Planhttp://en.wikipedia.org/wiki/Old_Age_Securityhttp://en.wikipedia.org/wiki/Retirementhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Social_insurancehttp://en.wikipedia.org/wiki/Social_insurancehttp://en.wikipedia.org/wiki/Canada_Pension_Plan#External_linkshttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Referenceshttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Quebec_Pension_Plan_.28QPP.29http://en.wikipedia.org/wiki/Canada_Pension_Plan#Performancehttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Growth_and_Strategyhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Future_and_Directionhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Socially_Responsible_Investinghttp://en.wikipedia.org/wiki/Canada_Pension_Plan#CPP_Investment_Boardhttp://en.wikipedia.org/wiki/Canada_Pension_Plan#Contributions_and_Benefitshttp://en.wikipedia.org/wiki/Canada_Pension_Plan#History


27/93

27

years on the financial status of the plan. Initial plans for a public contributory pension plan in Canada were drawn from 1957 to 1963, under the Conservativegovernments of Prime Minister John G. Diefenbaker, but the final details of theCPP were only settled under the Liberal governments ofLester B. Pearson,

between 1963 and 1965. Negotiations with the government of Quebec were alsoimportant in shaping the program, because of the need to amend the CanadianConstitution (i) to include disability and survivor benefits in the federal plan,combined with (ii) Quebec's desire to establish its own scheme. After section94A of the Constitution was amended in 1964 to settle both points, the CPP waslaunched at the start of 1966 (all of the preceding history is described in"Wrestling with the Poor Cousin: Canada Pension Plan Disability Policy andPractice, 1964 - 2001).At its inception, the prescribed CPP contribution rate was 1.8% of anemployee's gross income up to an annual maximum. Over time, the contributionrate was increased slowly. However, by the 1990s, it was concluded that the"pay-as-you-go" structure would lead to excessively high contribution rateswithin 20 years or so, due to Canada's changingdemographics, increasedlifeexpectancy of Canadians, a changingeconomy, benefit improvements andincreased usage of disability benefits (all as referenced in the Chief Actuary'sstudy of April 2007, noted above). The same study reports that the reserve fundwas expected to run out by 2015. This impending pension crisissparked anextensive review by the federal and provincial governments in 1996. As a partof the major review process, the federal government actively conductedconsultations with the Canadian public to solicit suggestions, recommendations,and proposals on how the CPP could be restructured to achieve sustainabilityonce again. As a direct result of this public consultation process and internalreview of the CPP, the following key changes were proposed and jointlyapproved by the Federal and provincial governments in 1997:

Total CPP contribution rates (employer/employee combined) wereincreased annually from 6% of pensionable earnings in 1997 to 9.9% by2003.

Continuously seek out ways to reduce CPP administration and operatingcosts.

Move towards a hybrid structure to take advantage of investment earningson accumulated assets. Instead of a "pay-as-you-go" structure, the CPP isexpected to be 20% funded by 2014, such funding ratio to constantlyincrease thereafter towards 30% by 2075 (that is, the CPP Reserve Fundwill equal 30% of the "liabilities" - or accrued pension obligations).

Creation of the CPP Investment Board (CPPIB). Review the CPP and CPPIB every 3 years.
http://en.wikipedia.org/wiki/Prime_Minister_of_Canadahttp://en.wikipedia.org/wiki/John_G._Diefenbakerhttp://en.wikipedia.org/wiki/Lester_B._Pearsonhttp://en.wikipedia.org/wiki/Demographicshttp://en.wikipedia.org/wiki/Life_expectancyhttp://en.wikipedia.org/wiki/Life_expectancyhttp://en.wikipedia.org/wiki/Economy_of_Canadahttp://en.wikipedia.org/wiki/Pensions_crisishttp://en.wikipedia.org/wiki/Pensions_crisishttp://en.wikipedia.org/wiki/Economy_of_Canadahttp://en.wikipedia.org/wiki/Life_expectancyhttp://en.wikipedia.org/wiki/Life_expectancyhttp://en.wikipedia.org/wiki/Demographicshttp://en.wikipedia.org/wiki/Lester_B._Pearsonhttp://en.wikipedia.org/wiki/John_G._Diefenbakerhttp://en.wikipedia.org/wiki/Prime_Minister_of_Canada


28/93

28

Contributions and BenefitsIn 2014, the prescribed contribution rate is 4.51% of a salaried worker's grossemployment income between $3,500 and $48,600, up to a maximumcontribution of $1,989.90. The employer matches the employee contribution,effectively doubling the contributions of the employee. If a worker is self-employed, he/she must pay both halves of the contribution.Historical contribution rates and contributory earnings can be found in belowTable .

Employment Insurance (EI) premium rates Year 2014 2013 2012 2011 2010 2009 2008

maximuminsurableearnings

$48,600 $47,400 $45,900 $44,200 $43,200 $42,300 $41,100

basic exemption nil nil nil nil nil nil nil employee rate 1.88% 1.88% 1.83% 1.78% 1.73% 1.73% 1.73% employeemaximum $913.68 $891.12 $839.97 $786.76 $747.36 $731.79 $711.03

employer rate 2.632% 2.632% 2.562% 2.492% 2.422% 2.422% 2.422% employer

maximum $1,279.1

5 $1,247.57 $1,175.96 $1,101.46 $1,046.30 $1,024.51 $995.44

self-employedrate 1.88% 1.88% 1.83% 1.78% 1.73% n/a n/a

EI claw backthreshold(1)

$60,750 $59,250 $57,375 $55,250 $54,000 $52,875 $51,375

(1) EI clawback threshold is 1.25 x maximum insurable earnings

When the contributor reaches the normal retirement age of 65 (a reduced

pension is available from age 60), the CPP provides regular pension benefit payments to the contributor, calculated as 25% of the average contributorymaximum over the entire working life of a contributor (not just the last 5 years).There are provisions that enable the lower-earnings years in a contributor'scontributory period to be dropped out due to disability, child rearing, or otherreasons. CPP benefit payments aretaxableas ordinary income. The CPP also provides disability pensions to eligible workers who become disabled in asevere and prolonged fashion, and survivor benefits to survivors of workers whodie before they begin receiving retirement benefits. If an application for

disability pension is denied, an appeal can be made for reconsideration, and then
http://en.wikipedia.org/wiki/Taxation_in_Canadahttp://en.wikipedia.org/wiki/Taxation_in_Canada


29/93

29

to the Canada Pension Plan / Old Age Security Review Tribunalsor PensionAppeals Boards (POA).

CPP Investment BoardUnder the direction of thenFinance Minister Paul Martin, the CPP InvestmentBoard was created in 1997 as an organization independent of the government tomonitor and invest the funds held by the CPP. In turn, the CPP InvestmentBoard created the CPP Reserve Fund. The CPP Investment Board is a crowncorporation created by an Act of Parliament. It reportsquarterly on its performance, has a professional management team to oversee the operation ofvarious aspects of the CPP reserve fund and also to plan changes in direction,and a board of directors that is accountable to but independent from the federalgovernment.

Socially Responsible InvestingThe growing issue ofsocially responsible investinghas been raised for theCPPIB, with civil society groups like ACT for the Earthand Interpretsexpressing concerns about the investment policies of the CPP InvestmentBoard, alleging potential conflicts of interest or asking for the adoption ofethical investment policies. These groups have criticized the CPP's investmentsin arms manufacturers, tobacco companies, big oil, and companies that engagein criminal activities. The CPP Investment Board (CPPIB) has responded with a

Policy on Responsible Investing. ACT for the Earth countered this with its ownreport, Against Common Sense, which argues that the CPPIB uses its proxyshares in a wide array of companies "to vote against peace, ecology, and humanrights at numerous corporate shareholder meetings," in direct violation of itsown responsible investing policies.

Future and DirectionDavid Denisonis the current Chief Executive Officer of theCanada PensionPlan Investment Board. An article in the May 18, 2006 Globe and Mailreported

that the CPPIB plans to increase the fund's foreign investments. According tothe 2007 Annual Report, about 45% of the fund's assets are now invested insecuritiesdomiciled outside Canada, largely in theUnited Statesand WesternEurope. In addition, the CPPIB has been broadening the scope its investments toinclude emerging markets, although Mr. Denison would not pinpoint a specificcountry or area. Canada as a single market cannot accommodate the futuregrowth of our organization, said Mr. Denison. In recent years, the CPPIB has also changed direction in its investment philosophy. It evolved from investing exclusively in non-marketable

government bonds to passive index-fund strategies and, more recently, to activeinvestment strategies.
http://en.wikipedia.org/wiki/Canada_Pension_Plan_/_Old_Age_Security_Review_Tribunalshttp://en.wikipedia.org/wiki/Minister_of_Finance_(Canada)http://en.wikipedia.org/wiki/Paul_Martinhttp://en.wikipedia.org/wiki/Quarterlyhttp://en.wikipedia.org/wiki/Socially_responsible_investinghttp://en.wikipedia.org/wiki/Civil_societyhttp://www.activistmagazine.com/index.php?option=com_content&task=view&id=597&Itemid=121http://www.interpares.ca/en/action/investing.phphttp://www.cppib.ca/files/PDF/policies/policies/Responsible_Investing_Policy.pdfhttp://activistmagazine.com/images/stories/campaigns/peace/cpp-against-common-sense.pdfhttp://en.wikipedia.org/w/index.php?title=David_Denison&action=edit&redlink=1http://en.wikipedia.org/wiki/CPP_Investment_Boardhttp://en.wikipedia.org/wiki/CPP_Investment_Boardhttp://en.wikipedia.org/wiki/Globe_and_Mailhttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Globe_and_Mailhttp://en.wikipedia.org/wiki/CPP_Investment_Boardhttp://en.wikipedia.org/wiki/CPP_Investment_Boardhttp://en.wikipedia.org/w/index.php?title=David_Denison&action=edit&redlink=1http://activistmagazine.com/images/stories/campaigns/peace/cpp-against-common-sense.pdfhttp://www.cppib.ca/files/PDF/policies/policies/Responsible_Investing_Policy.pdfhttp://www.interpares.ca/en/action/investing.phphttp://www.activistmagazine.com/index.php?option=com_content&task=view&id=597&Itemid=121http://en.wikipedia.org/wiki/Civil_societyhttp://en.wikipedia.org/wiki/Socially_responsible_investinghttp://en.wikipedia.org/wiki/Quarterlyhttp://en.wikipedia.org/wiki/Paul_Martinhttp://en.wikipedia.org/wiki/Minister_of_Finance_(Canada)http://en.wikipedia.org/wiki/Canada_Pension_Plan_/_Old_Age_Security_Review_Tribunals


30/93

30

Growth and StrategyThe CPP reserve fund receives its funds from the CPP and invests them like atypical large fund manager would. The CPP reserve fund seeks to achieve atleast the projected return(inflation-adjusted) needed to help sustain the CPP, arate set at 4.1% by 2020 in the CPP actuary's report, grading down from 5.0% in2005. As indicated in its Financial Highlights for the fiscal year ended March31, 2007 (document consulted on Aug. 3, 2007), the CPP reserve fund averaged13.6% return in the past 4 years, well in excess of Canadian inflation rates.The CPP reserve fund is aiming to achieve the following growth targets (inassets):

$147 billion by 2010. $200 billion by 2015. $592 billion by 2030. $1.55 trillion by 2050.

The strategies used to achieve these targets are listed on the CPPIB website, andinclude the following:

1. Diversification. In 1997, the CPP fund was 100% invested in federalgovernment bonds, but it has since diversified not only by asset class, butalso internationally.

2. Employing basic asset allocation theories. With diversification of

investments as one of their objectives, the current asset mix is now asfollows: Public Equity => 51.8% ,Fixed Income => 25.6% ,Private equity

=> 10.9% ,Inflation Sensitive Assets => 11.7%3. Using equity firms to assist in achieving targets for each asset class. The

CPP reserve fund allocates certain amounts to various pre-qualifiedequityfirms to be managed and used towards reaching the growth targets.For example, the CPP Investment Board hires private equity firms to helpit invest in private companies, fund managers to help it invest in public

equities, bond managers to assist in investing in bonds (within Canadaand foreign bonds), and so forth.

PerformanceThe total growth of the CPP Reserve Fund is derived from the CPPcontributions of working Canadians, and the return on investment of thecontributions. The portion of CPP Reserve Fund growth due to CPPcontributions varies from year to year, but has shown a slight decrease in theyears 2003/2014. The historical growth with the investment performance is

tabulated as follows:
http://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Inflation


31/93

31

Date Net Asset Value (CAD) Rate of Return (annual)

Mar 2003 $55.6 Billion -1.1%

Mar 2004 $70.5 Billion +10.3%

Mar 2005 $81.3 Billion +8.5%

Mar 2006 $98.0 Billion +15.5%

Mar 2007 $116.6 Billion +12.9%

Mar 2008 $122.7 Billion -0.29%

Mar 2009 $105.5 Billion -18.6%

Mar 2010 $127.6 Billion +14.9%

Mar 2011 $148.2 Billion +11.9%

Mar 2012 $161.6 Billion +0.9%

Mar 2013 $183.3 Billion +10.%

Mar 2014 $219.1 Billion +16.5%

Assets are as at the period end date (March 31).Commencing in fiscal 2007, the rate of return reflects the performance of the CPP Fund which excludes the short-term cashrequired to pay current benefits.Increased fund value due to worker and employer CPP contributions not needed to pay current benefits. The negativeinvestment return amounted to $303 million CAD.

Eligible to Canada Pension Plan (CPP)You have to deduct CPP contributions from an employee's remuneration if thatemployee:

is 18 yearsor older, but younger than 70; is in pensionable employment during the year; and Does not receive a CPP or QPP retirement or disability pension.Use the CPP contributions rates, maximums and exemptionsChart, to determine

how much CPP contributions to deduct.As an employer, you must also contribute the same amount of CPP that youdeduct from your employees' remuneration.

Employment not subject to CPPDo not deduct CPP contributions from payments for these types of employment: employment in agriculture, an agricultural enterprise, horticulture, fishing,

hunting, trapping, forestry, logging, and lumbering, by an employer:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/lf/trnng-eng.htmlhttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.htmlhttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.htmlhttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/lf/trnng-eng.html


32/93

32

who pays the employee less than $250 in cash remuneration in a calendaryear or

employs the employee for a period of less than 25 working days in the sameyear on terms providing for payment of cash remuneration the working

days don't have to be consecutive;NoteIn a calendar year, when the employee reaches $250 or more in cashremuneration or works 25 days or more, the employment is pensionable startingfrom the first day of work.

casual employment if it is for a purpose other than your usual trade or business;

employment as a teacher on exchange from a foreign country; employment of a spouse or common-law partner if you cannot deduct the

remuneration paid as an expense under the Income Tax Act; employment of your child or a person that you maintain if no cash

remuneration is paid; employment of a person in a rescue including disaster operation, as long

as you do not regularly employ that person for that purpose; employment of a person in connection with a circus, fair, parade,

carnival, exposition, exhibition, or other similar activity, except forentertainers, if that person:

is not your regular employee; and works for less than seven days in the year;

Note (1)When the employee works seven days or more, the employment is pensionablefrom the first day of work.

employment by a government body as an election worker if the worker: is not a regular employee of the government body; and works for less than 35 hours in a calendar year;

Note (2) When the employee works 35 hours or more, the employment is pensionable from the first day worked. Employment of a member of a religious order who has taken a vow of perpetual poverty. This applies whether the remuneration is paid directlyto the order or the member pays it to the order.

For information on situations when CPP contributions are required, seeAmounts and benefits subject to CPP contributions.

If you are not sure whether you should deduct CPP after reading these pages,you can request a ruling.
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/sbjct-eng.htmlhttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/rlng-eng.htmlhttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/rlng-eng.htmlhttp://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/sbjct-eng.html


33/93

33

Non-Refundable Tax Credit Blocks BC / 2000-2012

CreditBase Amount

Subject toIndexing2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Personal Credits

Basic Personal Amount $7,231 $8,000 $8,168 $8,307 $8,523 $8,676 $8,858 $9,027 $9,189 $9,373 $11,000 $11,088 $11,355 yes

Spousal $6,140 $6,850 $6,994 $7,113 $7,298 $7,429 $7,585 $7,729 $7,868 $8,026 $9,653 $9,730 $9,964 yes

Reduced when spousal income exceeds ($614) ($685) ($699) ($711) ($730) ($743) ($759) ($773) ($787) ($803) ($965) $ (973) ($996)

Eligible Dependant $6,140 $6,850 $6,994 $7,113 $7,298 $7,429 $7,585 $7,729 $7,868 $8,026 $9,653 $9,730 $9,964 yes

Reduced when dependant income exceeds ($614) ($685) ($699) ($711) ($730) ($743) ($759) ($773) ($787) ($803) ($965) $(973) ($996)

Infirm Dependant Credit $2,386 $2,424 $3,574 $3,635 $3,730 $3,797 $3,876 $3,949 $4,021 $4,101 $4,118 $4,151 $4,250 yes

Reduced when dependant income exceeds ($11,661) ($5,576) ($5,693) ($5,790) ($5,940) ($6,047) ($6,174) ($6,292) ($6,405) ($6,533) ($6,559) $(6,611) ($6,770)

In-home care of relative $2,386 $2,424 $3,574 $3,634 $3,730 $3 ,796 $3,877 $3,949 $4,021 $4,1 01 $4,118 $4,150 $4,250 yes

Reduced when relative's income exceeds ($4,845) ($11,848) ($12,096) ($12,302) ($12,621) ($12,849) ($13,118) ($13,368) ($13,608) ($13,881) ($13,936) ($14,048) ($12,385)

Age (65 or older by end of taxation year) $3,531 $3,587 $3,663 $3,725 $3,822 $3,891 $3,972 $4,048 $4,121 $4,203 $4,220 $4,254 $4.250 yes

Reduced when income exceeds ($26,284) ($26,705) ($27,265) ($27,729) ($28,450) ($28,962) ($29,570) ($30,132) ($30,674) $(31,664) ($32,424

Pension Credit $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 no

Adoption Expense Credit- - - - - - - Actual Actual Actual Actual Actual Actual noBased on actual adoption expenses to a maximum of'1'

(based on federal indexed maximum amount)Charitable and other gifts

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual noLowest tax rate on first $200; highest tax rate on excess

Medical Expense CreditActual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual yes

Reduced by lesser of'2' or 3% of net incomeCredit for Mental or Physical Impairment $4,293 $4,362 $6,126 $6,230 $6,392 $6,507 $6,644 $6,770 $6,892 $7,030 $7,058 $7,114 $7,285 yes

Credit for Mental or Physical Impairment for childunder 18 $2,941 $2,988 $3,574 $3,635 $3,729 $3,796 $3,876 $3,950 $4,021 $4,101 $4,118 $4,151 $4,250 yes

Reduced by attendant care and child care expenses inexcess of'3' claimed in respect of the impaired child $2,000 $2,032 $2,075 $2,110 $2,165 $2,204 $2,250 $2,293 $2,334 $2,381 $2,391 $2,410 $2,468

Tuition Credit Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual no

Education

Full-time student $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200/month $200 $200

Part-time student $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60/month $60 $60 no

Student Loan Interest Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual noEI and CPP Credit Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Ac tual Actual Actual no


34/93

34

Tax Credits - Low Income Climate Action Tax CreditEffective July 2008, individuals may be eligible for the B.C. refundable LowIncome Climate Action Tax Credit.You are eligible for the Low Income Climate Action Tax Credit if you are aresident of British Columbia, and

you are 19 years of age or olderor you have a spouse or common-law partneror you are a parent who resides with your child

For payments commencing in 2014 the maximum credit is $115.50 for you,$115.50 for your spouse or common-law partner and $34.50 for each qualifieddependent.If you are a single parent the maximum credit is $100 for yourself, $100 foryour first child and $30 for each additional child.

For payments starting in July 2009 and July 2010 the maximum credits areincreased to $105 and $31.50.For payments starting July 2011 the maximum credits are increased to $115.50and $34.50The Low Income Climate Action Tax Credit is reduced by 2% of net familyincome over the income threshold. The income thresholds are indexed to theConsumer Price Index for British Columbia.

TaxYear

Payment Dates Net IncomeThreshold Single

Net Income ThresholdMarried or Single Parent

2013 For July 2012 to June 2013 $31,711 $36,9972012 For July 2011 to June 2012 $30,968 $36,1302011 For July 2010 to June 2011 $30,722 $35,8432010 For July 2009 to June 2010 $30,600 $35,7002009 For July 2008 to June 2009 $30,000 $35,000

Claiming the CreditThe tax credit will be paid quarterly together with the federal Goods andServices Tax Credit in July, October, January and April.

You cannot claim this credit if you were confined to a prison or similarinstitution for a period of at least 90 days that includes the first day of thatquarter.


35/93

35

Comparison indexation adjustment for personal income taxand benefit amountsEach year, certain personal income tax and benefit amounts are indexed toinflation using the Consumer Price Index data as reported by Statistics Canada.Increases to tax bracket thresholds, amounts relating to non-refundable credits,and most other amounts will take effect on January 1, 2010. However, increasesto the Canada Child Tax Benefit (including the National Child BenefitSupplement and the Child Disability Benefit) and the goods and services taxcredit will take effect on July 1, 2010, to coincide with the beginning of the program year for payment of these benefits.The following chart compares the indexed amounts for the 2009-2013 tax years.It reflects an indexation increase of 0.6% for 2010.

Year 2014 2013 2012($)

2011($)

2010 ($) 2009 ($)

Tax bracket thresholdsTaxable income above which the 22% bracket begins 43,951 43,561 42,707 41,544 40,970 40,726Taxable income above which the 26% bracket begins 87,907 87,123 85,414 83,088 81,941 81,452Taxable income above which the 29% bracket begins 136,270 135,054 132,406 128,800 127,021 126,264

Amounts relating to non-refundable tax creditsBasic personal amount 11,138 11,038 10,882 10,527 10,382 10,320Age amount 6,916 6,854 6,720 6,537 6,446 6,408 Net income threshold 34,873 34,562 33,884 32,961 32,506 32,312Spouse or common-law partner amount (max.) 11,138 11,038 10,822 10,527 10,382 10,320Amount for an eligible dependant (max.) 13,196 13,078 12,822 10,527 10,382 10,320Amount for children under age 18 (max. per child) 2,255 22,340 2,191 2,131 2,101 2,089Canada employment amount (max.) 1,127 1,117 1,095 1,065 1,051 1,044Infirm dependant amount (max. per dependant) 6,589 6,530 6,402 4,282 4,223 4,198 Net income threshold 6,607 6,548 6,420 6,076 5,992 5,956Caregiver amount (max. per dependant) 4,530 4,490 4,402 4,282 4,223 4,198 Net income threshold 15,472 15,334 15,033 14,624 14,422 14,336Disability amount 7,766 7,697 7,546 7,341 7,239 7,196Supplement for children with disabilities (max.) 4,530 4,490 4,402 4,282 4,223 4,198Threshold relating to allowable child care and attendant careexpenses

2,654 2,630 2,578 2,508 2,473 2,459

Adoption expenses (max. per adoption) 11,774 11,669 11,440 11,128 10,975 10,909Medical expense tax credit 3% of net income ceiling 2,171 2,152 2,109 2,052 2,024 2,011

Refundable medical expense supplementMaximum supplement 1,152 1,142 1,119 1,089 1,074 1,067Minimum earnings threshold 3,363 3,333 3,268 3,179 3,135 3,116Family net income threshold 25,506 25,278 24,783 24,108 23,775 23,633

Old Age Security repayment threshold 71,592 70,954 69,562 67,668 66,733 66,335Certain board and lodging allowances paid to playerson sports teams or members of recreation programsIncome exclusion (max. per month) 338 335 329 320 315 313Tradespersons tools deduction Threshold amount relating to cost of eligible tools 1,117 1,095 1,065 1,051 1,044Goods and services tax creditAdult maximum 265 260 253 250 248Child maximum 139 137 133 131 130Single supplement 139 137 133 131 130Phase-in threshold for the single supplement 8,608 8,439 8,209 8,096 8,047Family net income at which credit begins to phase out 34,561 33,884 32,961 32,506 32,312

Canada Child Tax BenefitBase benefit 1,433 1,405 1,367 1,348 1,340Additional benefit for third child 100 98 95 94 93


36/93

36

Family net income at which base benefit begins to phase out 43,561 42,707 41,544 40,970 40,726National Child Benefit (NCB) supplement

First child 2,221 2,177 2,118 2,088 2,076Second child 1,964 1,926 1,873 1,848 1,837Third child 869 1,832 1,782 1,758 1,747Family net income at which NCB supplement begins to phase out 25,356 24,863 24,183 23,855 23,710

Family net income at which NCB supplement phase-out iscomplete 43,561 42,707 41,544 40,970 40,726Canada Disability Benefit (CDB)

Maximum benefit 2,626 2,575 2,504 2,470 2,455Family net income at which CDB supplement begins to phase out 43,561 42,707 41,544 40,970 40,726

Childrens Special Allowances (CSA) CSA Base Amount 3,654 3,582 3,485 3,436 3,416


37/93

37

Indexation adjustment for personal income tax and benefit amounts / 2005-2013 2005($)

2006($)

2007($)

2008($)

2009($)

2010($)

2011($)

2012($)

2013($)

2014($)

Taxable incomeabove which the 22%

bracket begins35,595 36,378 37,178 37,885 40,726 40,970 41,544 42,707 43,561 43,953

Taxable incomeabove which the 26% bracket begins 71,190 72,756 74,357 75,769 81,452 81,941 83,088 85,414 87,123 87,907

Taxable incomeabove which the 29%

bracket begins115,739 118,285 120,887 123,184 126,264 127,021 128,800 132,406135,054 136,270

Amounts relating to non-refundable tax creditBasic personal

amount 8,648 9,039 9,600 9,600 10,320 10,382 10,527 10,822 11,038 11,138

Age amount 3,979 4,066 5,177 5,276 6,408 6,446 6,537 6,720 6,854 6,916 Net income threshold 29,619 30,270 30,936 31,524 32,312 32,506 32,961 33,884 34,562 34,873Spouse or common-law partner amount

(max.)7,344 7,675 9,600 9,600 10,320 10,382 10,527 10,822 11,038 11,138

Amount for aneligible dependant(max.)

- 7,505 9,600 9,600 10,320 10,382 10,527 12,822 13,078 13,196Amount for childrenunder age 18 (max.

per child)- - 2,000 2,038 2,089 2,101 2,131 2,191 2,234 2,255

Canada employmentamount (max.) - - 1,000 1,019 1,044 1,051 1,065 1,095 1,117 1,127

Infirm dependantamount (max. per

dependant)3,848 3,933 4,019 4,095 4,198 4,223 4,282 6,4026,530 6,589

Net income threshold 5,460 5,580 5,702 5,811 5,956 5,992 6,076 6,4206,548 6,607Caregiver amount

(max. per dependant) 3,848 3,933 4,019 4,095 4,198 4,223 4,282 4,4024,490 4,530

Net income threshold 13,141 13,430 13,726 13,986 14,336 14,422 14,624 15,03315,334 15,472

Disability amount 6,596 6,741 6,890 7,021 7,196 7,239 7,341 7,5467,697 7,766

Supplement forchildren with

disabilities (max.)3,848 3,933 4,019 4,095 4,198 4,223 4,282 4,4024,490 4,530

Threshold relating toallowable child careand attendant care

expenses2,254 2,303 2,354 2,399 2,459 2,473 2,508 2,5782,630 2,654

Adoption expenses(max. per adoption) 10,000 10,220 10,445 10,643 10,909 10,975 11,128 11,44011,669 11,774

Medical expense taxcredit 3% of netincome ceiling

1,844 1,884 1,926 1,962 2,011 2,024 2,052 2,1092,152 2,171

Certain board & loadingMaximumsupplement 750 1,000 1,022 1,041 1,067 1,074 1,089 1,1191,142 1,152

Minimum earningsthreshold 2,857 2,919 2,984 3,040 3,116 3,135 3,179 3,2683,333 3,363

Family net incomethreshold 21,663 22,140 22,627 23,057 23,633 23,775 24,108 24,78325,278 25,506

Old Age Securityrepayment threshold 60,806 62,144 63,511 64,718 66,335 66,733 67,668 69,56270,954 71,592

Income exclusion(max. per month) - - - - 313 315 320 329 335 338
http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1http://www.cra-arc.gc.ca/nwsrm/fctshts/2009/m12/fs091215-eng.html#_edn1


38/93

38

2005($)

2006($)

2007($)

2008($)

2009($)

2010($)

2011($)

2012($)

2013($)

2014($)

Threshold amountrelating to cost of

eligible tools- - - - 1,044 1,051 1,065 1,0

Documents

Canada Taxation 2014- Last