Tax changes in DT Max (2017)

The following is a summary of the various new tax measures that required modifications in DT Max and that relate to tax year 2017 (some new tax measures do not require any modifications in DT Max.) Most of these new tax measures were introduced in the 2016 budgets, while some of them were introduced in prior budgets, in press releases or in information bulletins. In addition, please note that, unless otherwise provided, these proposed new tax measures should come into force by the time the 2017 returns are filed.

Finally, please note that we have also included changes that, while not representing new tax measures, are changes of an administrative nature that required modifications in DT Max.

Federal
Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut

Federal

1. Children's Fitness and Arts Tax Credits:
   As proposed in the 2016 budget, both the Children's Fitness and Arts Tax Credits will be eliminated for 2017 and subsequent taxation years.
2. Public Transit Tax Credit:
   The Public Transit Tax Credit will be eliminated as of July 1, 2017. The cost of transit passes and electronic payment cards for the use of public transit services incurred after June 2017 will no longer qualify for this credit.
3. Education and Textbook Tax Credits:
   As proposed in the 2016 budget, the Education and Textbook Tax Credits will be eliminated for 2017 and subsequent tax years. The unused education and textbook credit amounts carried forward from prior years to 2017 may be claimed in 2017 and in subsequent years.
4. Non-Eligible Dividend Tax Credits - DTC:
   As proposed in the 2016 budget, the gross-up factor applicable to non-eligible dividends will be maintained at 17% and the corresponding DTC rate will also be maintained at 21/29 of the gross-up amount.
5. Consolidation of Caregiver Credits:
   The budget proposes to replace the infirm dependant credit, the caregiver credit and the family caregiver credit with a new non-refundable 15% Canada caregiver credit for 2017 and subsequent years. A taxpayer can claim an amount of $6,883 for care given to an infirm dependant (a relative, a grandfather, a grandmother, a brother, a sister, an uncle, an aunt, a niece, a nephew or a child 18 and over). A $2,150 amount may be claimed for an infirm spouse or common-law partner for whom the taxpayer is claiming the spouse or common-law partner amount, for an eligible infirm dependant for whom the amount for an eligible dependant is claimed and for an infirm child under age 18 at the end of the tax year.
   (Not implemented in the planner version)
6. Eligible Capital Property:
   The budget proposes to cancel, effective January 1, 2017, the administration of eligible capital property. It will be replaced by a new Class 14.1 for capital cost allowance (CCA) purposes with transitional measures.
   
   According to the former administration, eligible capital expenditures were added to the cumulative eligible capital at an inclusion rate of 75% and were amortized at a rate of 7% on a declining balance basis. According to the new administration, eligible capital assets that will be newly acquired will be added to Class 14.1 at an inclusion rate of 100% and amortized at a rate of 5% on a declining balance basis.
   
   For each taxation year ending before 2027, additional capital cost allowances will be allowed for capital assets acquired before January 1, 2017. These assets will be included in Class 14.1. In addition, a separate business deduction will be available for incorporation costs incurred after 2016. The first $3,000 expense will be treated as a current expense instead of being added to Class 14.1.
7. Home Relocation Loans Deduction:
   Currently, the value of the benefit pertaining to an eligible home relocation loan may be deducted for the purposes of the calculation of the taxable income. Generally, the amount deductible is limited to the annual benefit that would have been obtained if the amount of the loan was $25,000. The 2017 budget proposes to eliminate the eligible home relocation loans deduction for benefits obtained after 2017.
8. Labour-sponsored funds tax credit:
   As of January 1, 2017, the tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations (LSVCC) has been eliminated. The tax credit for provincially registered LSVCC can still be claimed.

Newfoundland and Labrador

• None

Prince Edward Island

1. Increase of the basic personal amount to $ 8,160 and of the amount for spouse or common-law partner and spouse equivalent to $ 6,931.

Nova Scotia

• None

New Brunswick

1. Elimination of the provincial tax credit for tuition and education after the 2016 taxation year. The province announced the introduction of a new Tuition Access Bursary (TAB), which provides non-refundable financial assistance to students from families with an annual income of $60,000 or less. Students may still claim tuition and education credits for years prior to 2017.
2. The rate used to calculate the dividend tax credit for eligible dividends has increased to 14% and has decreased to 3.245% for other than eligible dividends.

Quebec

1. Decrease in the tax rate applicable to the first taxable income bracket
   The tax rate applicable to the first taxable income bracket will decrease from 16% to 15%. (Not implemented in the planner version)
2. Decrease in the Conversion Rate for some Non-Refundable Tax Credits and a 25% increase in these amounts
   Starting with tax year 2017, the 20% conversion rate applicable to the following amounts is reduced to 15%:
   • The basic personal amount (line 350);
   • The age amount for a person living alone or for retirement income (line 361);
   • The dependant amount and the amount transferred by a child aged 18 and over enrolled in post-secondary studies (line 367);
   • The amount for a severe and prolonged impairment in mental or physical functions (line 376).
   Despite this reduction, individuals will not be subject to a tax increase, since the basic personal amount is increased so that it results in a tax reduction. As for the other amounts mentioned above, they are increased by 25% so that the rate reduction does not have any tax consequences.
3. Tax Credits for Dependants
   • Withdrawal of the correction factor of 80%
     • To reflect the fact that the rate of conversion of the amount for a child enrolled in vocational training or in post-secondary studies and the amount for other dependants will decrease from 20% to 15%, the correction factor of 80% of a dependant's income will be withdrawn as of the 2017 taxation year.
   • Increase in the amounts (Not implemented in the planner version)
     • The amount for a minor child enrolled in vocational training or in post-secondary studies will increase to $2,861 for each semester, to a maximum of $5,722 for the year.
     • The amount for other dependants will increase to $4,168.
     • The maximum recognized parental contribution that can be transferred by a child 18 or older enrolled in post-secondary studies will increase to $10,222.
4. Reduction of the rate applicable to the calculation of the tax credit for volunteer firefighters and the tax credit for search and rescue volunteers
   • The rate applicable to these two credits will decrease from 16% to 15%, due the decrease in the tax rate applicable to the first taxable income bracket. (Not implemented in the planner version)
5. Tax Credit for Children's Activities
   The maximum eligible child expenses amount per child applicable for the purposes of calculating the refundable tax credit for children's activities is increased from $400 to $500. The maximum credit will therefore be $100 per child for 2017. In the case of a child with a severe and prolonged impairment in mental or physical functions, the applicable limit will be doubled and the maximum credit will therefore increase to $200 per child.
6. Tax Credit for Experimented Workers
   
   • Lower age of eligibility
     To encourage more experienced workers to remain in the labor market, the age of eligibility for the tax credit will be lowered from 64 years to 63 years for the 2017 tax year.
   • Tax credit enhancement
     The maximum amount of eligible work income on which the tax credit is calculated is $ 4,000 for workers aged 63 in 2017. For workers age 64 or older, this amount is increased by $ 2,000, from $ 4,000 to $ 6,000 for those aged 64 years old and from $ 6,000 to $ 8,000 for those aged 65 and over.
   • Change in the rate
     The existing rate of 15.04% which equals to 94% of the rate applicable to the first taxable income bracket of 16% is replaced by the new rate of 15%. This corresponds to the new rate applicable to the first taxable income bracket, excluding the weighting factor of 94%. In fact, the 94% weighting factor is withdrawn from the calculation of this tax credit as of 2017. (Not implemented in the planner version)
7. Abolition of the health contribution for all taxpayers
   The Minister of Finance of Quebec announced in his 2017 budget that the health contribution for individuals whose net income does not exceed $ 134,095 would be eliminated retroactively to 2016. For those whose net income exceeds $ 134,095, the health contribution is 4% of that portion of the net income that exceeds $ 134,095. However, the minimum contribution of $ 175 is abolished and the maximum contribution remains at $ 1,000.
   
   Starting with the 2017 tax year, the health contribution will be abolished for all taxpayers.
8. QPP Contribution Rate
   For 2017, the QPP contribution rate increases from 10.65% to 10.8%. This rate corresponds to a contribution rate of 5.4% for the employee and 5.4% for the employer.
9. New Tax Credit for the Restoration of Secondary Residences Damaged by Flooding that Occurred from April 5 to May 16, 2017
   On May 17, 2017, a new refundable tax credit for the restoration of secondary residences (cottages) damaged by the severe flooding that hit a number of Québec municipalities from April 5 to May 16, 2017, was announced.
   
   This tax credit, which may be up to $18,000, is intended for individuals who have a contractor carry out post-disaster clean-up work, preservation work or repair work necessary to restore a site to its former state.
   (Not implemented in the planner version)
10. New Temporary Refundable Tax Credit for the Upgrading of Residential Waste Water Treatment Systems
    In order to provide financial support to owners who are required to undertake renovations to their septic systems, a new refundable tax credit for the upgrading of residential waste water treatment systems will be introduced on a temporary basis.
    
    In short, the financial assistance provided by this tax credit, which may be as high as $ 5,500 per eligible home, will amount to 20% of the portion, in excess of $ 2,500, of qualified expenditures paid by an individual to have recognized work carried out to upgrade the waste water treatment system of the individual's principal residence or the individual's cottage.
    (Not implemented in the planner version)
11. Extension of the RénoVert Tax Credit until 2018
    In his 2017-2018 budget speech of March 28, 2017, the Minister of Finance announced the one-year extension of the RénoVert tax credit. Individuals will have until March 31, 2018 to enter into an agreement with a recognized contractor and will have to pay their renovation expenses before January 1, 2019.
    
    In addition, this credit has been modified as follows:
    
    • Renovation agreements entered into after March 31, 2017 and before April 1, 2018, may cover all eco-friendly renovation work that is currently recognized for the purposes of the RénoVert tax credit, with the exception of construction, renovation, modification, or rebuilding of a system for the discharge, collection or disposal of waste water, grey water or toilet effluents, since this type of work will be the object, as of April 1, 2017, of a new refundable tax credit, the Tax Credit for the Upgrading of Residential Waste Water Treatment Systems;
    • The calculation of the RénoVert tax credit will take into account expenses that are incurred before January 1, 2019.
12. Increase of the Security Option Deduction
    Current and former employees can now claim in their income tax returns a security option deduction equal to 50% (rather than 25%) of the value of the taxable benefit for a security option in the year they acquired the securities, provided the following conditions are met:
    • The benefit is deemed received for a security option that is a share in a publicly traded corporation.
    • The stock option is granted to an employee under an agreement concluded after February 21, 2017.
    • The stock option is granted to an employee of a corporation whose wages subject to contributions to the health services fund total $10 million or more for the calendar year in which the stock option agreement was concluded or in which the shares were acquired.
    • The conditions for the deduction for stock options of a corporation that is not a Canadian Controlled Private Corporation are met.
    (Not implemented in the planner version)
13. Deduction for Residents of Designated Remote Areas - Recognition of the Îles-de-la-Madeleine as a Northern Zone
    To better recognize the uniqueness of the Communauté maritime des Îles-de-la-Madeleine, rooted in its insular nature and its isolation due to its geographic location in the middle of the Gulf of St.Lawrence, the tax regulations will be amended so that the Magdalen Islands are considered northern zones as of the 2017 taxation year.
14. Tax Credit for Home-Support Services for Seniors
    The rate for the Tax Credit for Home-Support Services for Seniors increases from 34% to 35% for 2017.
15. Enhancement of the Tax Credit for Donations
    Individual tax regulations provide for the application of a non-refundable tax credit in respect of donations made to registered charities or other qualified donees. The rate of this credit is 20% on the first $200 donation and 24% on the surplus. The budget provides that, as of the 2017 taxation year, the current rate of 24% of the tax credit for donations will be increased to 25.75% for donations in excess of $200, The taxable income of the donor will exceed the fourth income threshold on the personal income tax table. For example, a taxpayer with a taxable income of $115,060 making a donation of $20,000 will receive a tax credit of $4,967, which is $175 more than the current tax credit. This measure was proposed in the 2016 budget.
    (Not implemented in the planner version)
16. Tax credit for taxi drivers or taxi owners
    Beginning in 2017, a taxpayer who is a member of a partnership that holds one or more taxi owner's permits can claim the tax credit for taxi owners if the conditions are met. (Not implemented in the planner version)
17. New supplement for the purchase of school supplies
    The Quebec government has announced the introduction of a new supplement for the purchase of school supplies of 100$ per dependent child aged 4 to 16. This amount will be added to the child assistance payment for the July payment each year, beginning in July 2018.
    (Not implemented in the planner version)

Ontario

1. Consolidation of Caregiver Tax Credits
   Ontario is taking steps to harmonize the federal credits for caregivers and infirm dependants. The province proposes to replace the corresponding provincial credits with a new Ontario Caregiver Tax Credit (OCTC) to simplify and improve access to tax relief.
   (Not implemented in the planner version)
2. Ontario Seniors' Public Transit Tax Credit
   This credit would cover eligible public transit costs for all Ontarians aged 65 or older as of July 1, 2017.
3. Healthy Homes Renovation Tax Credit
   As proposed in the 2016 budget, Ontario proposes to terminate this credit effective January 1, 2017. The Government is aware of the difficulties faced by seniors with mobility problems and offers support through other programs that assess their needs more effectively. For example, people with mobility impairments or mobility-related disabilities may have access to funds to cover some of the costs of home modifications under the Ontario Home and Vehicle Modifications Program.
4. Tuition and Education Tax Credits
   The government is proposing to abandon the Ontario Tuition and Education Tax Credits beginning in the fall of 2017. Unused or non-transferred credits can be carried forward to future taxation years. Ontario students could claim the tax credit for eligible tuition fees paid for studies up to and including September 4, 2017, and would be eligible for the education tax credit for the months of studies prior to September 2017. The eligible portion of these credits for 2017 could be transferred to an eligible family member or carried over to a future year. This measure was proposed in the 2016 budget.
5. Children's Activity Tax Credit
   Effective January 1, 2017, the Children's Activity Tax Credit will be eliminated. The government will work to develop other programs to encourage physical activity among Ontario children, including low-income families. This measure was proposed in the 2016 budget.
6. Ontario apprenticeship training tax credit
   The Ontario apprenticeship training tax credit has been discontinued. Only eligible expenditures for apprentices who started apprenticeship programs before November 15, 2017, can be used in calculating the credit.
7. The government is proposing changes in the way Ontario's provincial surtax and Ontario income tax reduction are calculated for Ontario residents who pay taxes in another province and non-residents who pay taxes in Ontario (referred to as tax filers in multiple jurisdictions).

Manitoba

1. Personal income tax brackets and basic personal amount
   As announced in the 2016 budget, the personal income tax brackets and basic personal amoint are indexed to inflation by Manitoba consumer price index starting 2017. The indexed factor is 1.5%.
2. Tuition Fee Income Tax Rebate
   The 2017 budget proposes to phase-out the Tuition Fee Income Tax Rebate. The annual maximum amount an individual graduate can claim for this rebate will be the least of Manitoba income tax payable, 10% of eligible tuition fees or $500 (was $2,500 in 2016 taxation year).
3. Tuition Fee Income Tax Rebate Advance
   The Tuition Fee Income Tax Rebate Advance is eliminated effective for tuition and ancillary fees paid in relation to a school term that begins after April 2017.
4. Manitoba Education Amount
   Contrary to the federal government's move to eliminate the education amount for students, Manitoba students will continue to benefit from the Manitoba Education Amount. The Manitoba government plans to introduce technical amendments to maintain the provincial education amount following the elimination of the federal education amount.
5. Primary caregiver tax credit
   The limit of three qualifying care recipients has been removed when claiming the primary caregiver tax credit. However, the maximum total amount is $1,400, regardless of the number of care recipients. (Not implemented in the planner version)
6. The odour-control tax credit has been eliminated for expenditures incurred after April 11, 2017.
7. The nutrient management tax credit has been eliminated for expenditures incurred after April 11, 2017.

Saskatchewan

1. Elimination of credits for post-secondary tuition and education expenses, effective July 1, 2017.
2. Tax rates have been reduced by 0.25% for all 3 tax brackets.
3. Elimination of the Saskatchewan Employee's Tools Tax Credit as of tax year 2017.
4. The 2017 Budget also suspends indexation of the tax system until the Province's finances improve.
5. The dividend tax credit rate for eligible dividends will be reduced in quarter-point increments for each of the 2017 through 2020 taxation years, to integrate the decrease in the general corporate income tax rate.

Alberta

1. The dividend tax credit rate for dividends paid out of income taxed at the small-business rate (other than eligible dividends) will be adjusted downwards as a result of lowering the small-business rate to 2%. This change will take effect simultaneously to the change in the small-business rate, on January 1, 2017.
2. A new non-taxable amount, the Alberta climate leadership adjustment rebate, is designed to help low and middle income households adjust to costs associated with the provincial carbon levy. (Not implemented in the planner version)
3. A new refundable tax credit, the Alberta investor tax credit, is available to investors who acquired shares from a venture capital corporation or eligible business corporation registered in Alberta. (Not implemented in the planner version)

British Columbia

1. Volunteer firefighters search and rescue tax credit
   Introduction of a new tax credit starting in the 2017 tax year for volunteer firefighters and search and rescue volunteers. Individuals who claim the federal volunteer firefighter tax credit or the federal search and rescue volunteer credit can claim $3,000 for this credit.
2. Elimination of the Education Tax Credit
   The Education Tax Credit will be eliminated on January 1, 2018. Unused education credits that have been carried forward from years prior to 2018 may be claimed in 2018 and subsequent taxation years.
3. Decrease of the dividend tax credit rate
   British Columbia offers a dividend tax credit to avoid double taxation of income that has already been taxed at the corporate level. Beginning in 2017 and for subsequent taxation years, the tax credit rate on non-eligible dividends will be reduced from 2.47% to 2.18%. This decrease reflects the reduction in the small business tax rate from 2.5% to 2%.
4. BC low income climate action tax credit
   Effective April 1, 2018, the maximum annual credit payment amount for the BC low income climate action tax credit will be increased from $115.50 to $135 for adults and $34.50 to $40 for children. (Not implemented in the planner version)
5. The back-to-school amount has been eliminated. (Not implemented in the planner version)

Yukon

1. The Yukon Dividend Tax Credit rates applicable to eligible and non-eligible dividends will be maintained at 15% and 3.14% respectively.
2. Effective January 1, 2017, the education and textbook amounts have been eliminated. Yukon students will still be able to claim unused territorial tuition, education and textbook amounts from 2016 and previous years.
3. The amount for infirm dependants age 18 or older (line 5820) and the caregiver amount (line 5840) have been eliminated and replaced by the new caregiver amount for infirm dependants age 18 or older (line 5818). In addition, you can claim the caregiver amount for spouse or common-law partner, or eligible dependant age 18 or older (line 5814).

Northwest Territories

1. Child benefit - The budget confirms that the Northwest Territories child benefit will be enhanced for 2017. For example, different benefit amounts for children under and over the age of six will be introduced, and the basic benefit amount will be paid to all families with less than $30,000 in family income and will be gradually reduced as income increases. No benefits will be paid to families with income of $80,000 or above. Amendments to the Northwest Territories Income Tax Act will be introduced this fall.

Nunavut

• None