22 Mar 2017 Federal Budget Highlights

By Bilal Kathrada

The Minister of Finance, Bill Morneau delivered the Liberal government’s 2017 budget today in Ottawa. To help you navigate the business and personal tax updates and changes, we have summarized some of the budget highlights below.

Business Tax
Tax Planning Using Private Corporations

The budget indicates that the government will launch a review of tax planning and tax reduction strategies used by private companies to unfairly advantage high-income individuals, including:

• Income sprinkling using private corporations;
• Holding a passive investment portfolio inside a private corporation; and
• Converting a private corporation’s regular income into capital gains.

Billed-Basis Accounting
The budget proposes to eliminate the ability for certain professionals (dentists, lawyers, accountants, medical doctors) to deduct the cost of their work in progress for taxation years beginning on or after March 22, 2017. Transition rules will apply.

Investment Tax Credit for Child Care Spaces
The budget proposes to eliminate the 25% non-refundable investment tax credit for the creation or expansion of licensed childcare spaces.

Personal Tax
Tuition Tax Credit
The budget proposes to extend the Tuition Tax Credit to include tuition fees paid for occupational skills courses offered by a university, college, or other post-secondary institution that are not at the post-secondary level.

Public Transit Tax Credit
The budget proposes to eliminate the Public Transit Tax Credit effective July 1, 2017.

Disability Tax Credit
The budget proposes to allow nurse practitioners to certify disability tax credit certificates for impairments within their scope of practice.

Medical Expense Tax Credit
The budget proposes to allow costs related to medical intervention in order to conceive a child as a Medical Expense Tax Credit. Taxpayers will be able to amend their tax returns for the preceding ten taxation years to include these costs.

Caregiver Credit
The budget proposes to replace the existing Caregiver Credit, Infirm Dependent Credit, and Family Caregiver Tax Credit with a new Canada Caregiver Credit. This new, non-refundable credit provides $6,883 for certain infirm dependents of a claimant and $2,150 for certain other situations. The credit is reduced dollar-for-dollar by the dependent’s net income above $16,163.

Mineral Exploration Tax Credit
The budget proposes to extend the 15% Mineral Exploration Tax Credit until March 31, 2018.

If you have any questions about how the federal budget impacts you or your business, please call us at 604.639.0909.