Tax changes in DT Max (2022)

The following is a summary of the various new tax measures that required modifications in DT Max and that relate to tax year 2022 (some new tax measures do not require any modifications in DT Max.) Most of these new tax measures were introduced in the 2022 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 2022 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

New tax measures proposed in the budget:

1. Increase in the Employment Insurance Premium Rate for Quebec Residents

   For 2022, the Employment Insurance premium rate has increased from 1.18% to 1.20% for Quebec residents. The rate remains at 1.58% for residents of other provinces. The maximum insurable earnings increase from $56,300 to $60,300 for 2022.

2. Increase in the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) Premium Rate

   The basic premium rate remains at 5.4% for the QPP and 4.95% for the CPP, while the rate for the additional premium rate increases from 0.50% to 0.750%, which brings the rate employee contribution for 2022 at 6.15% for the QPP and 5.70% for the CPP. The maximum insurable earnings increase to $64,900 for 2022.

3. Increase in the Lifetime Capital Gains Exemption

   The lifetime capital gains exemption from the disposition of qualified small business corporation shares has increased from $892,218 to $913,630 for 2022.

4. Enhancement of Personal Amounts

   The basic personal amount (BPA) is increased from $12,421 to $12,719 for 2022. As of the 2020 tax year, an additional amount is added to the BPA. For 2022, the additional amount increases from $1,387 to $1,679, for a total BPA of $14,398.

   The additional amount of BPA is gradually reduced when income is above the lower end of the fourth tax bracket of $155,625 (in 2022). The additional amount is reduced to zero when income reaches the lower end of the fifth tax bracket of $221,708 (in 2022).

   The tax credits for spouses and eligible dependents are also increased accordingly.

5. Electronic Filing Thresholds for Tax Preparers

   Budget 2021 proposes to amend the rule in the Income Tax Act that requires, subject to the exception below, professional preparers of income tax returns to file electronically where they prepare more than 10 income tax returns of corporations or 10 income tax returns of individuals (other than trusts) to apply instead where they file more than 5 of either type of return for a calendar year. Furthermore, the exception for trusts would be removed.

   Budget 2021 also proposes to amend the exception in the Income Tax Act whereby a tax preparer is allowed to a file a maximum of 10 paper income tax returns of corporations and 10 paper income tax returns of individuals per calendar year to instead allow only a maximum of 5 paper returns of each type per calendar year.

6. Increase of the Automobile Deduction Limits

   The following changes to limits and rates will be taking effect as of January 1, 2022:

   • The ceiling for capital cost allowances (CCA) for zero-emission passenger vehicles will be increased from $55,000 to $59,000, before tax, in respect of vehicles (new and used) acquired on or after January 1, 2022.

   • The ceiling for CCA for passenger vehicles will be increased from $30,000 to $34,000, before tax, in respect of vehicles (new and used) acquired on or after January 1, 2022.

   • Deductible leasing costs will be increased from $800 to $900 per month, before tax, for new leases entered into.

7. Immediate Expensing of Capital Property

   Temporary immediate expensing in respect of certain property acquired by a Canadian-Controlled Private Corporation (CCPC), unincorporated businesses carried on directly by Canadian resident individuals (other than trusts) and certain eligible partnerships.

   This measure affects eligible property acquired by a CCPC on or after Budget Day (April 19, 2021) and that becomes available for use before January 1, 2024, up to a maximum amount of $1.5 million per taxation year (for all classes). Immediate expensing would only be available for the year in which the property becomes available for use. The $1.5 million limit would be shared among associated members of a group of CCPCs. For unincorporated businesses and eligible partnerships, this measure would apply to investments made after December 31, 2021, that become available for use before 2025.

   Eligible property under this new measure would be capital property that is subject to the CCA rules, other than property included in CCA classes 1 to 6, 14.1, 17, 47, 49 and 51, which are generally long-lived assets. The half-year rule would be suspended for property for which this measure is used.
   (Not implemented in the planner version)

8. Home Buyers' Tax Credit

   Budget 2022 proposes to double the credit amount from $5,000 to $10,000, which would provide eligible homebuyers with tax relief of up to $1,500 ($10,000 x 15%). Spouses or common-law partners would still be able to split the value of the credit provided the combined total does not exceed $1,500 in tax relief.

   This measure would apply to the purchase of an eligible home made on or after January 1, 2022.

9. Expansion of CCA Classes 43.1 and 43.2

   Inclusion of air-sourced heat pumps primarily used for space or water heating under Classes 43.1 and 43.2. Effective for eligible property (generally new) acquired and that became available for use on or after April 7, 2022.

10. Home Accessibility Tax Credit

    The amount of eligible expenses has been doubled: the expense limit has been increased from $10,000 to a maximum of $20,000. This measure would apply to expenses incurred in the 2022 and subsequent taxation years.

11. Labour Mobility Deduction for Tradespeople

    Budget 2022 proposes to introduce a labour mobility deduction for tradespeople to recognize certain travel and relocation expenses for workers in the construction industry, for whom such relocations are relatively common. This measure would allow eligible workers to deduct up to a maximum of $4,000 in eligible expenses per year.

    For the purposes of this deduction, an eligible individual would be a tradesperson or apprentice who:

    • Performs a temporary relocation that allows him to obtain or maintain employment under which the work he performs is temporary in nature in a construction activity at a given work location, and

    • Ordinarily resides, prior to the relocation, in Canada, and during the relocation period, in temporary lodging in Canada, near this work location.

    (Not implemented in the planner version)

12. Medical expenses related to a surrogate mother or a sperm, ova, or embryo donor

    Budget 2022 proposes to provide an expanded definition of patient where an individual relies on a surrogate or donor to become a parent. In these cases, the patient would be defined as follows:

    • The taxpayer

    • The taxpayer's spouse or common-law partner

    • A surrogate mother, or

    • A sperm, ova, or embryo donor.

    This expanded definition would allow medical expenses paid by the taxpayer, or the taxpayer's spouse or common-law partner, with respect to a surrogate mother or donor, to qualify for the purposes of the medical expense tax credit (METC). For example, expenses paid by the intended parent to a fertility clinic for an in vitro fertilization procedure with respect to a surrogate mother or for hormone medication for an ova donor would be eligible for the METC.

13. Critical Mineral Exploration Tax Credit

    The critical mineral exploration tax credit (CMETC) is a new 30% investment tax credit for the exploration of specified minerals. The CMETC will only apply to expenditures renounced under eligible flow-through share agreements entered into after April 7, 2022 and before April 1, 2027.

14. Disability Tax Credit

    For 2021 and later tax years, an individual diagnosed with type 1 diabetes is deemed to have met the two times and 14 hours per week requirements for life-sustaining therapy.

Newfoundland and Labrador

New tax measures proposed in the budget:

1. Income tax increase and new tax brackets

   Personal income tax increases for 2022 for taxable incomes greater than $135,973, with the introduction of 3 new tax brackets for taxable income over $250,000. The highest tax rate will be 21.8% (was 17.3%) for taxable income over $1 million, bringing the highest combined federal/NL rate to 54.8%.

   2022 Tax brackets/rates (before indexing):

   • over $135,973 up to $190,363 : 17.8%

   • over $190,363 up to $250,000 : 19.8%

   • over $250,000 up to $500,000 : 20.8%

   • over $500,000 up to $1 million : 21.3%

   • over $1 million : 21.8%

2. Dividend tax credit rates

   The dividend tax credit rate decreases from 3.5% to 3.2% for non-eligible dividends but increases from 5.4% à 6.3% for eligible dividends.

Prince Edward Island

New tax measures proposed in the budget:

• The firefighter tax credit is increased from $500 to $1,000.

• The Basic Personal Amount is increased by $750 to a new threshold of $11,250, with the spouse and equivalent-to-spouse amounts raised proportionately.

• The Low-Income Tax Reduction threshold is increased by $1,000 (to $20,000 from $19,000).

• The dividend tax credit rate for non-eligible dividends has been revised, decreasing from 1.96% to 1.30% of the taxable dividend for 2022.

Nova Scotia

New tax measures proposed in the budget:

1. New Children's Sports and Arts Refundable Tax Credit

   • $500 credit, effective for 2022 and subsequent taxation years.

   • for children under the age of 19.

   (Not implemented in the planner version)

2. New 40% Fertility and Surrogacy Rebate

   • Maximum claim is a total of $20,000 in eligible costs, for a maximum annual refundable tax credit of $8,000.

   • Effective for the 2022 and subsequent taxation years.

   • Treatments must be provided by a Nova Scotia licensed medical practitioner.

   • No lifetime maximum.

   • Expenditures for which the surrogate claims medical expenses are not eligible for the rebate.

   (Not implemented in the planner version)

3. New More Opportunity for Skilled Trades (MOST)

   • Starting in 2022, personal income tax paid on the first $50,000 of earnings will be repaid for taxpayers under the age of 30, who are employed and registered in selected skilled trades and occupations in industries where there are labour shortages.

   • To start, selected occupations in eligible sectors will include manufacturing, computer and IT, transportation, film, video, and service sectors.

   (Not implemented in the planner version)

New Brunswick

New tax measures proposed in the budget:

• Basic personal amount for 2022 increases from $10,817 (indexed amount for 2022) to $11,720

• Low-income tax reduction threshold for 2022 increases from $18,268 (indexed amount for 2022) to $19,177

• Phased-in provincial property tax rate reductions over 3 years starting with the current property tax year:

  • by 50% for non-owner-occupied residential properties, including apartment buildings and other rental properties;

  • by 15% for other residential properties, including nursing homes;

  • by 15% for non-residential properties

Quebec

New tax measures proposed in the budget:

1. Decrease in the Dividend Tax Credit Rates

   The rate of the tax credit for non-eligible dividends, applicable to the gross-up amount of a dividend, decreases from 4.01% to 3.42% in the case of a dividend received or deemed received after December 31, 2021.

2. Quebec Parental Insurance Plan (QPIP) Premium Rate Unchanged

   For 2022, the QPIP employee premium rate remains at 0,494%. The maximum insurable earnings increase from $83,500 to $88,000 for 2022.

3. Increase in the Quebec Pension Plan (QPP) Contribution Rate

   The basic contribution rate remains at 5.4%, while the additional contribution rate drops from 0.50% to 0.75%, bringing the employee contribution rate for 2022 to 6.15%. The maximum allowable earnings increase from $61,600 to $64,900 for 2022.

4. Gradual Increase of the Rates for the Calculation of the Tax Credits Respecting the Work Premium (Schedule P)

   In the case of the general work premium for households without children, the rate increases to 11.6% for 2022.

   In the case of the adapted work premium for households without children, the rate increases to 13.6% for 2022.

5. Tax Credit for Holders of Taxi Driver's Permit

   The refundable tax credit for holders of a taxi driver's permit has been completely eliminated as of 2022.

6. Changes to the Tax Credit for Home-Support Services for Seniors (TCHSS)

   Gradual increase in the rate of the tax credit: In order to enhance tax assistance for seniors who qualify for the tax credit for home-support services for seniors, the rate of this tax credit applicable to eligible expenses will be gradually increased in the coming years. Starting in 2022, the current 35% tax credit rate will be raised annually by one percentage point to reach 40% in 2026.

   Dependent seniors - Reintroduction of the reduction of the tax credit based on income: For dependent seniors, the tax legislation will be amended to reintroduce a reduction mechanism, which will only be applicable with respect to the "amount of the enhanced tax credit for home-support services for seniors" (TCHSS). The "amount of the enhanced TCHSS" will be reducible, for each of the taxation years subsequent to 2021, based on income, at a rate of 3% for each dollar of family income exceeding the applicable reduction threshold for each of the taxation years subsequent to 2021, until the "amount of the enhanced TCHSS" is zero.
   (Not implemented in the planner version)

   Non-dependent seniors - Introduction of a second reduction of the tax credit based on income: Starting in 2022, the TCHSS will be reduced based on two family income thresholds:

   • reduction based on the first threshold: the TCHSS will be reduced by 3% for each dollar of family income in the particular taxation year exceeding the first threshold applicable for the particular taxation year, up to the second threshold applicable for the particular taxation year;

   • reduction based on the second threshold: the TCHSS will be reduced by 7% for each dollar of family income in the particular taxation year exceeding the second threshold applicable for the particular taxation year.

   The first threshold corresponds to the current reduction threshold in respect of family income, which is set at $60,135 for 2021. This amount is indexed annually.

   The second threshold corresponds to the amount of $100,000 for 2022 and will be indexed annually starting in 2023, under the same parameters as those for the first threshold.
   (Not implemented in the planner version)

   Seniors living in a rental apartment building - Increase in limit: In order to update the amount of eligible expenses in respect of the TCHSS for seniors living in a dwelling unit of a rental apartment building, the 5% rate that applies to the monthly rent will now apply to a maximum monthly rent of $1 200 (instead of $600) for the dwelling unit of which the senior is a tenant, co-tenant or subtenant, thereby doubling the maximum tax assistance in this regard.

   Seniors living in a rental apartment building - Introduction of a "minimum eligible monthly rent" amount: In order for every senior aged 70 or over living in a dwelling unit of a rental apartment building to receive a tax credit for home-support services for seniors for eligible expenses included in their rent, a presumption will be introduced in the tax legislation to provide that the minimum amount for any rent will be $600 per month, therefore establishing the lowest amount to which the 5% rate will apply in determining the deemed amount of minimum eligible expenses included in the rent for the purposes of the tax credit for home-support services for seniors living in a dwelling unit of a rental apartment building.

7. Tax Credit for a Large Cultural Donation

   With its expiry initially scheduled for December 31, 2022, the tax credit for a large cultural donation has become permanent.

8. Extension of the Refundable Tax Credit for the Upgrading of Residential Waste Water Treatment Systems

   In order to encourage a greater number of owners to undertake repair work on their septic systems, the period during which a service agreement may be entered into with a qualified contractor, for the application of the refundable tax credit for the upgrading of residential waste water treatment systems, will be extended by five years, that is, until 31 March 2027.

   This extension of the refundable tax credit for the upgrading of residential waste water treatment systems will benefit individuals who have such work carried out by a qualified contractor under a service agreement entered into after March 31, 2022, and before April 1, 2027.

9. Home buyers’ tax credit

   For a qualifying home purchased on or after January 1, 2022,the maximum tax credit has been increased from $750 to $1,500.

10. Deduction for patronage dividends received from a cooperative

    The deduction for patronage dividends received from a cooperative was extended for three years instead of being eliminated as planned on January 1, 2023.

Ontario

New tax measures proposed in the budget:

1. Enhancement to the Low-income Individuals and Families Tax (LIFT) Credit

   Starting in 2022, the LIFT Credit would be enhanced as follows:

   • Maximum benefit increased from $850 to $875

   • Phase-out rate reduced from 10% to 5%

   • The individual income range for benefit reduction is increased from $30,000 to $32,500.

   • The family income range over which benefit is reduced is increased from $60,000 to $65,000.

2. New Ontario Seniors Care at Home Tax Credit

   The government is proposing a new refundable Personal Income Tax credit to help seniors with eligible medical expenses, including expenses that support aging at home. Eligible recipients of the new Ontario Seniors Care at Home Tax Credit would receive up to 25 per cent of their claimable medical expenses up to $6,000, for a maximum credit of $1,500.

   • Credit of 25% of claimable medical expenses up to $6,000, for a maximum credit of $1,500

   • Reduced by 5% of family net income over $35,000

   • Fully phased out by at most $65,000

   • Family net income test is same for singles and couples

   • Will be based on medical expenses claimed for the existing Ontario Medical Expense Tax Credit (METC)

   • Eligibility requirements:

     • Age 70+ in the year, or have a spouse or common-law partner age 70+ in the year; and

     • Resident in Ontario at the end of the tax year

   (Not implemented in the planner version)

3. Introducing the Temporary Ontario Staycation Tax Credit

   The temporary Ontario Staycation Tax Credit for 2022 aims to encourage Ontario families to explore the province, while helping the tourism and hospitality sectors recover from the financial impacts of the COVID-19 pandemic.

   Ontario residents can claim 20% of their eligible 2022 accommodation expenses, for example, for a stay at a hotel, cottage or campground, when filing their personal Income Tax and Benefit Return for 2022. You can claim eligible expenses of up to $1,000 as an individual or $2,000 if you have a spouse, common-law partner or eligible children, to get back up to $200 as an individual or $400 as a family.

   Individuals would be able to claim the Ontario Staycation Tax Credit on their 2022 Personal Income Tax returns if they meet all of the following conditions:

   • They are resident in Ontario on December 31, 2021; and

   • You are not the eligible child of another individual on December 31, 2022

   Only one individual per family can claim the credit for the year. Your claim can include the eligible expenses of your spouse or common-law partner and your eligible children. An eligible child is not entitled to claim the credit.

   If you do not have a spouse or common-law partner, or eligible child, you can claim your own eligible expenses for the credit.

4. Ontario Jobs Training Tax Credit

   Scheduled to expire on December 31, 2021, the Ontario Jobs Training Tax Credit is extended to December 31, 2022.

5. Ontario Seniors' Home Safety Tax Credit

   Scheduled to expire on December 31, 2021, the Ontario Seniors' Home Safety Tax Credit is extended to December 31, 2022.

Manitoba

New tax measures proposed in the budget:

1. Education Property Tax (Form MB479)

   Beginning in 2021, property owners started receiving the Education Property Tax Rebate as part of the phasing out of education property taxes.

   In conjunction with the Education Property Tax Rebate, existing education property tax offsets will be proportionally reduced, as follows:

   Tax Credit and Rebate Amounts	2021	2022	2023
   Education Property Tax Credit and Advance	Up to $525	Up to $438	Up to $350
   Seniors' School Tax Rebate	Up to $353 Minus 1.5% on family net income over $40,000	Up to $294 Minus 1.25% on family net income over $40,000	Up to $235 Minus 1.0% on family net income over $40,000
   Seniors' Education Property Tax Credit	Up to $300 Minus 0.75% of family net income	Up to $250 Minus 0.625% of family net income	Up to $200 Minus 0.5% of family net income

   
   

2. New Residential Renters Tax Credit

   Up until 2021, homeowners and residential renters have qualified for the same credit, the Education Property Tax Credit. In 2021, this credit provided renters with up to $525. Commencing in 2022, the renters Education Property Tax Credit will become the Manitoba Residential Renters Tax Credit.

   Like the Education Property Tax Credit, the Residential Renters Tax Credit will continue to be delivered through the annual personal income tax return and apply to principal residences. The new credit will no longer be calculated based on 20% of annual rents paid, and will instead be calculated as a fixed monthly maximum claim amount, based on the number of months spent renting in a given year. The monthly amount will be $43.75 and will not be income tested.

   Unlike the Education Property Tax Credit, which will continue to be adjusted as the Education Property Tax Rebate increases, the maximum annual amount of the Renters Credit will be fixed at $525.

   (Not implemented in the planner version)

3. Community enterprise development tax credit (Form T1256)

   Scheduled to expire on December 31, 2022, the Community Enterprise Development Tax Credit is made permanent. This tax credit provides a refundable Manitoba tax credit of up to 45% to individuals and corporations who acquire equity capital in community-based enterprises in Manitoba.

4. Small Business Venture Capital Tax Credit

   Scheduled to expire on December 31, 2022, the Small Business Venture Capital Tax Credit is made permanent.

   This tax credit provides a non-refundable Manitoba tax credit of up to 45% to individuals and corporations who acquire equity capital in eligible Manitoba enterprises.

Saskatchewan

New tax measures proposed in the budget:

1. Increase of the dividend tax credit rate for non-eligible dividends

   The dividend tax credit rate for non-eligible dividends has been revised, increasing from 1.695% to 2.105% of the taxable dividend for 2022.

2. Saskatchewan Home Renovation Tax credit

   On December 3, 2020, the government announced introduction of the new Saskatchewan Home Renovation tax credit for expenses incurred between October 1, 2020, and December 31, 2022. To qualify, renovations must be to a Saskatchewan taxpayer's principal residence, which must be located in Saskatchewan.

   Total qualified expenses incurred between January 1, 2022, and December 31, 2022, in excess of $1,000 (base amount), but not more than $10,000, can be claimed on 2022 tax returns (maximum claim of $9,000 for 2022).

   The tax credit can be split among eligible family members, but the total amount claimed cannot exceed the maximum allowable.

Alberta

New tax measures proposed in the budget:

• None

British Columbia

New tax measures proposed in the budget:

1. New clean buildings refundable tax credit

   Effective February 23, 2022, a new temporary clean buildings tax credit for retrofits that improve the energy efficiency of eligible commercial and multi-unit (4 or more units) residential buildings is introduced. People who improve the energy efficiency of eligible commercial and multi-unit residential buildings can receive a refundable tax credit of 5% of qualifying expenditures.
   (Not implemented in the planner version)

2. Shipbuilding and ship repair industry tax credit extended (Form T1014-2)

   The shipbuilding and ship repair industry tax credit is extended for two years to the end of 2024.

3. Training tax credits extended (Forms T1014 and T1014-1)

   The training tax credits are extended for two years to the end of 2024.

Yukon

New tax measures proposed in the budget (March 3, 2022):

• None

Northwest Territories

New tax measures proposed in the budget (February 22, 2022):

• None

Nunavut

New tax measures proposed in the budget:

• None