Canadaâ€™s New Government Continues to Deliver on Its Tax Relief Plan
News Release: August 31, 2006
The Honourable Jim Flaherty, Minister of Finance, today announced that Canadaâ€™s new Government is keeping its promise to Canadians by delivering on its Tax Relief Plan. The measures below are part of the Governmentâ€™s plan to deliver over $20 billion in tax cuts over the next two years, which is more than the last four budgets of the previous government combined.
These measures were part of the income tax measures that were proposed in Budget 2006 but not included in the Budget Implementation Act, 2006, which received Royal Assent on June 22, 2006.
These measures are:
* The new Canada Employment Credit.
* The new Textbook Tax Credit.
* The new tax credit for public transit passes.
* The new deduction for tradespeopleâ€™s tool expenses.
* A complete exemption for scholarship income received in connection with enrolment at an institution which qualifies the student for the education tax credit.
* A doubling, to $2,000 from $1,000, of the amount on which the pension income credit is calculated.
* An extension of the $500,000 lifetime capital gains exemption, and various intergenerational rollovers, to fishers.
* The new Apprenticeship Job Creation Tax Credit.
* A reduction of the current 12 per cent small business tax rate to 11.5 per cent for 2008 and to 11 per cent thereafter.
* An increase, to $400,000 from $300,000, of the amount that a small business can earn at the small business tax rate, effective January 1, 2007.
* A reduction of the minimum tax on financial institutions.
The legislative proposals are being released in draft form so that taxpayers have an opportunity to consider and comment on them before they are introduced in Parliament. To facilitate this review, detailed explanatory notes relating to the proposals are also being released.
As the panel of health and physical fitness experts appointed by the Minister of Finance to advise on the Childrenâ€™s Fitness Tax Credit has not yet had an opportunity to report its recommendations, the legislative proposals released today do not include provisions to implement this credit. These measures will be incorporated in the legislative package to be tabled in Parliament.
Comments on the proposals are requested by September 22, 2006. Once the comment period is concluded, the Government will work towards introducing these measures in Parliament at the earliest opportunity.
The legislative proposals and explanatory notes released today are available free of charge on the Department of Finance website. Printed copies are available for $13 from the Department of Finance Distribution Centre at 613-995-2855.
Further information on Budget 2006, which was tabled on May 2, 2006, is available on the Department of Finance website.
There’s always a lot to post when you talk about income tax, so I won’t. If you want to read more about any of the above topics .. I suggest that you hilite a topic from the above (CTRL-C) and then CTRL-F find it on the last link just above this sentence.
?? You wonder ?? … . “Textbook Tax Credit” … CTRL-C to Hilite!
Go to the page http://www.fin.gc.ca/drleg/BudAug06n_e.html .. CTRL-F that query:
Textbook tax credit
New subsection 118.6(2.1) of the Act provides to an individual a non-refundable tax credit in respect of textbooks for each month in a taxation year in which an individual was entitled to claim the education tax credit.
The textbook tax credit for a taxation year is equal to the product obtained when the appropriate percentage for the taxation year is multiplied by $65 for each month in the taxation year in which the individual was entitled to claim the education tax credit as a full-time student or $20 for each month in the taxation year in which the individual was entitled to claim the education tax credit as a part-time student. The appropriate percentage is 15.25% for the 2006 taxation year and 15.5% for the 2007 and subsequent taxation years.
New subsection 118.6(2.1) applies to the 2006 and subsequent taxation years.