Peter Wiesner CPA, CA
Minister Morneau announced in the House of Commons that the Government will table its federal budget on February 27, 2018.
The higher taxes and uncertainty already created by the July 18, 2017 announcements will likely continue as these are not well convieved rules nor accepted by the majority of the business community. So the outlook is poor for the following items coming into effect;
a) balanced budget, b) lower taxes for all taxpayers, c) prospects for growth as it is less with higher taxation, d) less regulation and less micro management (not part of the current agenda), and e) more reliable Federal government services (look at CRA outage below), Therefore, one should expect this budget should be more of the same brutal business tax policies as in the last two budgets. Hightlights to look for in the up coming budget are if the government puts a cap on holding company profits -$50,000 has been discussed as maximum annual earnings, which is real silly to proceed with, as then more legal off shore accounts will arise, and b) with top tax rates over 53.53% in Ontario will any tax relief be included besides the minor corporate tax reduction 10.5% to 9% over the next 2 years, and c) will Marijuana become legal July 1, 2018 as indicated.
As a Canadian and taxpayer I find the last two budget polices poor for business including the announcements between budgets. Overall, the policies are over spend and over tax, but are a disincentive to work for many Canadians. Also, many wealthy individuals have been considering leaving, more under ground economy as a result of overtaxation, and these budgets are not as helpful in the long term as the governments makes it out to be. So looking forward to the February 27th, 2018 budget to see what comes next.
February 9, 2018
Canada Revenue Agency Service Issues.
The CRA’s EFILE service will stop accepting transmissions of your clients’ 2013, 2014, 2015 and 2016 initial (T1) personal income tax and benefit returns and 2015 and 2016 amended T1 returns through the ReFILE service at 11:59 p.m. local time on Friday, January 19, 2018 in order to convert our systems to prepare for the next filing season.
Both services will re-open on Monday, February 26, 2018 at 8:30 a.m. (Eastern time) for the electronic filing of your clients 2014, 2015, 2016 and 2017 initial personal income tax and benefit returns and 2015, 2016 and 2017 amended T1 returns. Thank you for your continued support and participation.
Please ensure you transmit any initial or amended T1 returns and T1 Form T1135 before January 19, 2018 to avoid having to wait until the new program starts or having to paper file during this extended period.
The following services will still be available after January 19, 2018:
· Corporation Internet Filing for Corporation Income Tax (T2) returns.
Note: You must have renewed your EFILE number and password and passed suitability screening to continue to file T2 returns using your EFILE number and password. Or you will need to use a web access code. Go to canada.ca/revenue-agency/corporation-internet for more information.
· Electronic filing of Form T1013.
Note: You must use the current-year version of the tax software to electronically submit the 2016 form through the T1013 transmission web service until 8:00 p.m. on Friday, February 9, 2018.
When the T1013 web service re-opens at 8:30 a.m. Monday, February 12, 2018 it will only accept the 2017 version of this form.
2018 Tax Changes Have Arrived
Federal Corporate Tax Change
Effective January 1, 2018, the small business tax rate is proposed to be reduced from 10.5% Federally to 10 per cent, as a first step toward lowering it to 9 per cent in 2019. The Ontario Rate for small business remains at 4.5% in addition to the Federal Rate.
This intended reduction will provide a small business with up to $7,500 in federal tax savings per year in 2019 for those corporations earning $500,000 of small business deduction. With the small business tax cut, entrepreneurs can retain more of their earnings to reinvest, supporting the growth of their business and job creation.
2018 WSIB Maximum Insurable Earnings Ceiling is $90,300 up from $88,500 or $1,800 higher versus 2017
The WSIB Maximum Insurable Earnings Ceiling for 2018 is $90,300 (2017 is $88,500). Changes to the Maximum Insurable Earnings Ceiling are directly linked to changes in average earnings in Ontario as measured by Statistics Canada, and provisions under the Workplace Safety and Insurance Act. The minimum premiums for workers is a wage of $30,100 in 2018.
From BNN January 5, 2018
Starting Monday, Canadians can register for a $25 Loblaw gift card. The company is offering the card to compensate customers after it admitted to a bread price-fixing scheme over a 14-year span ending in 2015. As many as six million cards are expected to be issued, costing the grocery giant up to $150 million. Below, BNN takes a look at three things Loblaw may be hoping to get in exchange — and one way the company’s plan could backfire.
“The money is more symbolic of trying to provide some support to their apology,” Sylvain Charlebois, dean of Dalhousie University’s Faculty of Management and among Canada’s leading food industry experts, told BNN via telephone. “Loblaw is going to need to do way more than just give a $25 gift certificate [because] it is not just about compensating customers, it is about revisiting its social licence with the public.”
The actual amount Loblaw is offering doesn’t matter, Charlebois argues, “because the brand has been damaged. The gift card is meant to hide a much more problematic issue that relates to customer trust.”
YOUR LEGAL RIGHTS (MAYBE)
Lawyers behind a proposed class action lawsuit against several companies including Loblaw are urging Canadians to “read the fine print, and make sure you’re not giving away any rights to take part in the class action in exchange for what is basically a coupon to a grocery store.”
Loblaws insists signing up for the card will not prevent anyone from participating in any current or future potential lawsuits.
“Accepting this offer will not affect customers’ right to participate in any class action or to receive any incremental compensation that may be awarded by the court,” a company spokesperson told CTV News last week.
“For everyone wanting to redeem the gift card they will likely spend over $25 so it is a PR spin from Loblaw,” Charlebois told BNN. “It is hard to understand or appreciate just how badly customers were burned financially.”
Statistics Canada data shows the average Canadian family spends roughly $120 per week at grocery stores, suggesting the move could indeed be part of a plan to get more Canadians to spend more money at Loblaw’s stores.
The amount is also arguably just a fraction of the cash Loblaw pocketed by overcharging on bread for 14 years. Maclean’s crunched the numbers and found if Loblaw had inflated prices by just 10 per cent, then a Canadian who purchased one loaf per week over that 14-year period would have been gouged for nearly $200 in total.
For the $25 gift card to be proportional to the average customer’s loss, the price hike could not have exceeded one per cent.
HOW IT COULD BACKFIRE
It is entirely possible Canadians will not forgive Loblaw, will not give it more of their money, and will not forgo their legal right to sue — but will take the card anyway and give it away to those in need.
There are multiple campaigns online urging Canadians to sign up for the gift card for the sole purpose of donating them to local food banks across the country.
A Loblaw spokesperson told CTV News that donating the gift cards would be a “lovely idea” before immediately suggesting card holders should still go to their local Loblaw store: “With the card in hand, customers could easily buy food for themselves or for a food bank.”