To help you with your tax planning and keep you informed on Canada’s financial health, our team of tax professionals will offer helpful commentary on issues related to this year’s federal and provincial budgets. As governments table their budgets, PwC will bring immediate detailed analysis to you below.
As 2015 is an election year, there will be great interest in what the federal government’s pre-election budget might hold in store for Canadians and Canadian businesses.
Chris Kong, National Managing Partner - Tax, reviews the progress the government has made in fulfilling its tax agenda, and discusses what we can expect to see in the 2015 pre-election budget.
Issues that are thought to be included in the 2015 Federal Budget are:
We have also compiled a timeline outlining the major tax happenings of 2014.
It’s not too early to begin thinking about what the upcoming budget could mean for you or your business. We have a team of Tax specialists across the country available to help.
New and improved Canada Job Grant launching in 2014
The new Canadian Job Grant will be launched to better align training with labour market trends. The government consulted broadly with employers and employer associations, educational institutions and labour organizations on the design of the Canada Job Grant. Businesses with a plan to train unemployed and underemployed Canadians for a new or better job will be eligible to apply for a Canada Job Grant.
The Canada Job Grant could provide up to $15,000 per person for training costs, including tuition and training materials, which includes up to $10,000 in federal contributions. The Grant will be for short-duration training provided by an eligible third-party retailer, such as community colleges, career colleges, trade union centres and private trainers. Training can be provided in a classroom, on site at a workplace or online.
Filling in the youth job gaps – Gov’t dedicating $40M to support up to 3,000 internships
Economic Action Plan 2014 proposes to dedicate $40 million towards supporting up to 3,000 full-time internships for post-secondary graduates in high-demand fields for 2014-15 and 2015-16. Of this amount, up to $30 million would be provided to the National Research Council’s Industrial Research Assistance Program to support youth internships in small and medium-sized enterprises undertaking technical research and development projects. The remaining $10 million will be delivered by Employment and Social Development Canada under the Youth Employment Strategy.
FYI millennials – Gov’t supporting older workers with $75M of federal investment
Encouraging the labour market participation of under-represented groups in the labour market continues to be an important priority of the government. Demographic changes and an aging population mean that older workers are becoming a larger portion of the labour force.
Through Economic Action Plan 2014, the government proposes to renew the Target Initiative for Older Workers program for a three –year period, representing a federal investment of $75 million. Eligibility for the Initiative will also be expanded to communities experiencing unfulfilled employer demand and/or skills mismatches.
Attracting the best & brightest abroad with new recruitment model – Expressions of Interest System
The government is transforming the immigration system into one that is fast, flexible and focused on meeting Canada’s economic and labour market needs. To that end, Economic Action Plan 2014 proposes to provide $14 million over two years and $4.7 million per year ongoing to launch a new recruitment model – the Expression of Interest system – in January 2015.
The Expression of Interest System would allow the Government of Canada, provinces and territories, and employers to actively target highly skilled immigrants under key economic immigration programs, including the Federal Skilled Worker Program, the Federal Skilled Trades Program and the Canadian Experience Class.
Under this new recruitment model, candidates would make an online submission to express interest in coming to Canada and provide information about their skills and experience.
Matching your job skills in a new way via the modernized National Job Bank
Economic Action Plan 2014 proposes to invest $11.8M over two years and $3.3 million per year ongoing to launch an enhanced Job Matching Service to ensure that Canadians are given the first chance at available jobs that match their skills in their local area.
The proposed enhanced Job Matching Service will build on the launch of a modernized and easy-to-use consolidated National Job Bank, providing job seekers and employers with timely access to job postings and labour market information.
Branding ‘Made in Canada’ to increase consumer awareness
Economic Action Plan 2014 announces that a private sector steering committee will be established to lead the development of a ‘Made in Canada’ consumer awareness campaign. Branding products ‘Made in Canada’ is potentially powerful to encourage consumers – both in Canada and internationally – to choose such products. Additional details around the ‘Made in Canada’ consumer awareness campaign and steering committee will be announced in the coming months.
Securing Canada’s place in science & tech with $1.5B in funding
Federal investment in research and development has contributed greatly to Canada’s strong performance in the fields of science and technology. Economic Action Plan 2014 proposes to create the Canada First Research Excellence Fund with $1.5B, which will help Canadian post-secondary research institutions leverage their strengths into world-leading capabilities that will generate benefits for Canadians.
Atlantic Canada receives innovation love from Federal Gov’t
Over the coming year, the government will refocus its innovation programs delivered through the Atlantic Canada Opportunities Agency to ensure that they are responsive to the needs of business, including small and medium-sized enterprises, and that they effectively support the development and commercialization of new ideas, technologies, products and services that lead to continual strong economic growth.
Gov’t paying it forward with improvements to Canadian payment system
To protect consumers and ensure public confidence in the use of electronic payment methods, the government is developing a comprehensive risk-based approach to the oversight of the Canadian payment system. The government intends to consult publicly on the oversight of retail payments systems in the spring of 2014.
As a first step, the government proposes to amend the Canadian Payments Act to introduce changes to the governance and accountability structures of the Canadian Payments Association. As well, the government proposes to expand and enhance the oversight powers of the Bank of Canada by amending the Payment Clearing and Settlement Act so it can better identify and respond to risks to financial market infrastructure in a proactive and timely manner
Advancing movement of goods & services within Canada with Internal Trade Barriers Index
The government has made progress with opening international markets to Canadian businesses – but more has to be done within Canadian borders to ensure the free movement of goods and services across provincial and territorial boundaries
Government will work to develop an Internal Trade Barrier Index, modelled on the Services Trade Restrictiveness Index of the Organization for Economic Cooperation and Development. The Index will play a key role in identifying measures that currently restrict trade and in helping jurisdictions focus reforms and negotiation efforts on priority areas.
Canada’s IP regime plays catch- up with modernized framework
Economic Action Plan 2014 proposes to modernize Canada’s intellectual property framework by ratifying or acceding to the following widely recognized international treaties:
The above treaties have been tabled in Parliament which will result in amendments to the Patent Act, the Trade-marks Act and the Industrial Design Act. The benefit will result in companies to obtain protection for trade-marks in a number of countries through a single international application.
Windsor –Detroit crossing get a $470M beauty boost over two years
The Windsor-Detroit trade corridor is the most important international land crossing in North America – handling 30% of Canada-US trade carried by truck. The government is proposing to provide $470 million over two years on a cash basis for a new Windsor-Detroit International Crossing.
This project will be undertaken as a public-private partnership, to allow the government to leverage the expertise and innovation of the private sector to deliver this complex project on time and on budget.
Responsible Resource Development/Conserving Canada’s Natural Heritage/Investing In Infrastructure
National Energy Board receives $28M to review pipeline projects
Economic Action Plan 2014 proposes to provide $28 million over two years to the National Energy Board to review project applications, such as TransCanada Pipelines Limited’s Energy East Pipeline Project, within legislated timelines to provide timeline certainty and to enhance the Participant funding Program. This funding will be fully cost-recovered from industry.
Offshore oil and gas development go duty-free – waving goodbye to tariffs.
Economic Action Plan 2014 proposes to permanently eliminate tariffs on mobile offshore drilling units used in offshore oil and gas exploration and development. The duty-free status of these units, which was scheduled to expire in 2014, lowers business costs by $13 million annually, improving the global competitiveness of Canadian energy projects, and increasing the potential for valuable resource discoveries in Canada’s Atlantic and Arctic offshore areas. This measure will also provide important maintenance and repair opportunities for Canadian shipyards.
Expanding tax support for clean energy generation
The government plans to expand eligibility for the accelerated capital cost allowance (CCA) for clean energy generation equipment to include water-current energy equipment and a broader range of equipment used to gasify eligible waste. It’s estimated that these measures will reduce federal revenues by a small amount in 2014-15 and by $1 million in 2015-16.
Saving junior mines with extension of 15% Mineral Exploration Tax Credit
The Mineral Exploration Tax Credit is scheduled to expire on March 31, 2014. However, to support the mineral exploration efforts of junior exploration companies in a context of continued economic global uncertainty, Economic Action Plan 2014 proposes to extend the credit for an additional year, until March 31, 2015.
It is estimated that the extension of this measure will result in a net reduction of federal revenues of $45 million over the 2014-15 to 2015-16 period.
Livestock pilot project launches in Western Canada
Starting this spring, a new pilot price insurance program will be available to cattle and hog producers in western Canada – offering insurance against unanticipated price declines. The four-year pilot Western Livestock Price Insurance Program is a unique and collaborative arrangement between the federal government and the western provinces to enhance risk management options available to the livestock industry.
Keeping Canada pretty with $391.5M over 5 yrs to Parks Canada Agency
Economic Action Plan 2014 proposes to provide $391.5 million over five years on a cash basis to the Parks Canada Agency to make improvements to highways, bridges and dams located in Canada’s national parks and along historic canals, facilitating better access to these national treasures.
Montreal bridges receive a $378 million makeover over two years
Economic Action Plan 2014 proposes to provide $378 million over two years on a cash basis to advance the repair and maintenance of federal bridges in the Greater Montreal Area. These structures were built in the 1930s and 1960s and require rehabilitation and repair measures over time.
Tax Compliance/Reducing Tax Burden
CRA takes on GST/HST application credit duty
The government is proposing to eliminate the need for individuals to apply for the GST/HST Credit and to allow the Canadian Revenue Agency (CRA) to automatically determine if an individual is eligible to receive the credit. In addition to simplifying tax filings for individuals, this measure will eliminate the need for the CRA to issue notices each year to about two million applicants who do not qualify for the credit
Charities receive the gift of electronic filing
To reduce the administrative burden on charities, the government will modernize the CRA’s information technology system to permit electronic filing. Enabling charities to apply for registration and file their annual information returns electronically will reduce the time it takes charities to meet their compliance obligations under the Income Tax Act and allow them to spend more time on their charitable activities. This will represent an overall cash investment of $23 million over five years.
Table manners on tax measures – Gov’t outlines tax measures annually for Canadians
To make it easier for taxpayers to know the status of proposed tax measures, Economic Action Plan 2014 announces that legislation will be introduced to require the Minister of Finance to table in Parliament annually a list of the government’s outstanding tax measures. To ensure that the list reflects any current government’s legislative agenda, the first report of each new government would be tabled in the second year of its mandate.
Stronger tax compliance, addressing tax avoidance improving tax integrity = savings of $44M in 2014-15.
Economic Action Plan 2014 announces a number of measures to address international aggressive tax avoidance, improving tax integrity and strengthening tax compliance and enhancing the fairness of the tax system.
Economic Action Plan 2014 to improve the fairness of the tax systems include:
In total, addressing international aggressive tax avoidance, improve tax integrity and strengthening tax compliance, and enhance the fairness of the tax system will provide savings of $44 million in 2014-15, rising to $454 million in 2018-19, for a total of $1.8 billion over 2013-14 and the following five years.
Supporting Families And Communities
Gov’t ringing in on consumer protection within the telecoms sector – calls to reduce whole roaming rates
The government has taken steps to achieve greater competition in the wireless market so Canadians can benefit from more choice, lower prices and better service. The government proposes to amend the Telecommunications Act to cap wholesale domestic wireless roaming rates to prevent wireless providers from charging other companies more than they charge their own customers for mobile voice, data and text services.
This measure will be in place until the Canadian Radio-Television and Telecommunications Commission (CRTC), which is now investigating this issue, makes a decision on roaming rates. With wholesale domestic roaming rates on networks capped, Canadian consumers will benefit from more competition in the wireless market.
Stepping up against cross-border price discrimination
Economic Action Plan 2014 plans to address country pricing strategies – that is, when companies use their market power to charge higher prices in Canada that are not reflective of legitimate higher costs.
The government intends to introduce legislation to address price discrimination that is not justified by higher operating costs in Canada, and to empower the Commissioner of Competition to enforce the new framework. Details will be announced in the coming months.
Food Safety Information System getting a $30.7M revamp
Economic Action Plan 2014 proposes to provide $30.7 million over five years to establish a Food Safety Information Network to link federal and provincial food safety authorities and private food testing laboratories across Canada.
The network will allow food safety data to be compiled, analyzed and shared in real time, allowing for more rapid detection of and response to food safety hazards.
Paying respect to where it’s due – Gov’t gives $2.1M to improve veteran programs
The government proposes to invest $2.1 million in 2014-15 to improve My VAC Account – a web-based tool that provides information and access to Veterans Affairs Canada’s services, and allows veterans and their families to do routine business with the department.
The improved My VAC Account will offer a complete suite of online services that mimics services offered in-person, and will allow veterans to conduct business with Veterans Affairs Canada 24/7 from anywhere in the world.
Safeguarding our communities with the National Disaster Mitigation Program
The government is committed to working with provinces, territories and municipalities to build safer and more resilient communities. Economic Action Plan 2014 plans to provide $200 million over five years to establish a National Disaster Mitigation Program.
This program will support investments in structural mitigation measures, such as infrastructure to control floods that can decrease the impact of severe natural disasters. The cost of projects will be shared with provinces and territories.
Missing no more! Gov’t creates $8.1M DNA-based Missing Persons Index
Economic Action Plan 2014 proposes up to $8.1 million over five years, starting in 2016-17, with $1.3 million per year ongoing, to create a DNA-based Missing Persons Index.
This new funding will be used to support police forces and coroners in submitting samples from unidentified remains and personal effects from missing persons and facilitate the comparison of DNA profiles with samples from the National DNA Data Bank.
On February 18, 2014 the British Columbia Minister of Finance, the Honourable Michael de Jong, Q.C., tabled the province’s budget which unveiled liquefied natural gas (LNG) tax.Contact
Nicolas Marceau, Quebec Minister of Finance, delivered today, February 20, 2014, the 2014-2015 Budget of the Government of Quebec.Contact
Carlos Leitao, Quebec Minister of Finance, delivered today, June 4, 2014, the 2014/2015 Budget of the Government of Quebec.Contact
On March 6, 2014, Manitoba’s Minister of Finance, Jennifer Howard, presented the province’s budget.
On May 1, 2014, Ontario's Finance Minister, Charles Sousa, presented the province’s budget.