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  • Peter Wiesner

Top 11 Tax and Legal Changes

On January 1, 2020 tax and legal changes occurred that are important to properly plan your affairs. I have provided the top 11 items so far. Remember that Federal and Provincial Budgets still have not been issued for 2020 and could affect these items.

  1. You can add $6,000 to your Tax Free Savings Account (TFSA) at this time.The maximum contributions allowed since 2009 is $69,500 as a continuous Canadian resident age 18 or older in 2009.

  2. Effective January 1, 2020, the lower rate of Ontario corporate income tax is reduced from 3.5 per cent to 3.2 per cent for small business earnings.

  3. The basic amount Federally that you can earn tax-free is going up on Jan. 1, to $13,229. The increase is being phased in over four years until it reaches $15,000 in 2023. These changes are only for those in the lower income brackets (under $150,473) The changes could result in tax savings of up to $140 in 2020

  4. The Ontario basic exemption as of January 1, 2020 is $10,873 for 2020 up from $10,852 in 2019.

  5. No more out-of-country health insurance coverage. Please ensure you obtain Travel Insurance for Abroad and Inter Provincial Travel with Canada.

  • The Ontario government’s move to scrap its out-of-country health insurance takes effect on Jan. 1, 2020.  This means that Ontarians who fall ill while travelling can no longer claim the $400-a-day maximum coverage for inpatient emergency care and the $50-a-day maximum allowed for emergency outpatient services (such as an MRI or a CAT scan) that, until now, were provided by OHIP.

  • Please note that OHIP coverage was minimal and “inefficient,” given the high cost of medical care abroad – and especially in the United States -- that usually requires private travel insurance.

  • Per a Harvard study, it reveals that 62% of US bankruptcies are caused from lack or inferior medical coverage. So don’t get caught without Travel insurance and watch medication changes and pre-existing medicals before you leave as you may be denied coverage.

6. The EI rate has come down a bit from 2019 and maximum 2020 EI maximum

premiums are $856.36 for an employee. Employer Maximum is $1,198.90. This

dropped a few dollars.

7. The CPP rate has increased to 5.25% in 2020 from 5.1% in 2019. Employees will pay

$2,898.00 at maximum up from $2,748.90 in 2019.

8. Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax


9. Changes to federal carbon tax rebates

For Ontario residents, the 2020 federal carbon tax rebates, which must be claimed on

2019 income tax returns, are as follows:

  • Single adult or first adult in a couple: $224

  • Second adult in a couple or first child of a single parent: $112

  • Each child under 18: $56

  • Baseline amount for a family of four: $448

10. Canada Training Benefit

The federal government introduced the Canada Training Benefit to help with disruption

in the labor force due to changes in technology. This refundable tax credit is designed

to lower the barrier to professional development and to provide financial support to

help pay for half of the tuition and training fees. As a worker, you’ll be eligible to receive

up to $250 annually as a tax credit. This amount goes into a notional account, which the

worker can use for eligible purposes.

To be eligible to accumulate $250 in a year, you must meet the following criteria:

  • File a tax return for that year

  • Be at least 26 years old and no older than 65 years old at the end of the year

  • Be a Canadian resident during the year

  • Have eligible earnings of minimum $10,000 and maximum $150,000 in the year (this includes employment, self-employment, and maternity and parental benefits)

To help make it easier to keep track of your notional account balance, it will be

communicated each year on the Notice of Assessment you receive from the Canada

Revenue Agency (CRA) after you file your income taxes. In any given year you can

claim the lesser of the balance in your notional account and half of eligible tuition and

fees paid in the year.

11. Ministry of the Attorney General Changes - Impact on Legal Claims

Amendments to the Courts of Justice Act and its regulations will:

  • Increase the maximum amount of a claim in Small Claims Court from $25,000 to $35,000.

    • Make it faster, easier and more affordable for people and businesses to resolve their legal disputes.

    • Increase the minimum amount of a claim that may be appealed to the Divisional Court from $2,500 to $3,500.

  • Expand access to the Simplified Procedure in civil court to simplify complex processes and reduce the legal costs associated with cases involving modest values.

    • Beginning January 1, 2020, people and businesses with civil court claims up to $200,000 will be able to use the Simplified Procedure process, up from the previous claim amount of $100,000.

    • Changes will make it easier, faster and more affordable to resolve issues by limiting trials to five days, requiring parties to agree on a trial management plan and removing the option of a civil jury trial unless a jury notice has previously been filed.

  • Improve efficiency in the Divisional Court by clarifying court document filing requirements.

    • Limit factums (documents) on motions for leave to appeal to facts, issues, statements of law, and authorities that are relevant to a ground on which leave to appeal may be granted.

    • Limit motion records to documents which are referred to in the party's factum and which are relevant to a ground on which leave to appeal may be granted.

Amendments to a regulation under the Law Society Act will:

  • Improve the efficiency of the Law Society Tribunal related to processes of the Hearing Division:

    • For certain types of motions, eliminating the requirement for the same members who will hear the merits of the proceeding to also hear the motion.

    • Allow a single member panel, rather than a three-member panel, to exclude the public and/or witnesses from all or part of a hearing.

If you have any questions or comments, please feel free to contact me.

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