Taxation PoliciesBy: Paul Young, CPA, CGA

Taxation by levels

Taxation by levels

Spending by levels

Spending by levels

Taxation at 40,000 Income

Taxation at 26,000 Income

Taxation Policies – Federal Level

Income tax Splitting

Income Tax and GST Cuts (put $30B into people’s pocket via Income Tax cuts as well cut to GST)

Working Tax Credit (helps low income eaners)

Child Tax Credit

Pension Splitting (tax credit up to 2,000)

TFSA (Tax Free Spending Account) - $5,000/year

Transit Pass or other credits

Fitness Tax Credits

Taxation Policies – Provincial Level

Ontario Health Premium Tax ($60 to $900 tax)

HST (applying the provincial tax to more items)

BC Carbon Tax (tax credits)

MB hikes PST (8% from 7%)

Tax impact / Spending per Ontario’s Government policies

Tax impact / Spending per Ontario’s Government policies

Ontario / Liberal Government

• Sources:

• Chamber of Commerce: http://www.occ.ca/media-release/ontario-budget-2014-business-worried-about-ontarios-finances/

• CFIB - http://www.cfib-fcei.ca/english/article/5860-provincial-pension-plan-an-attack-on-small-business.html

• Retail Council: http://www.retailcouncil.org/media/newsreleases/ontario-retirement-pension-plan-retailers-say-buyer-beware

• Ontario Federal of Labor - http://news.nationalpost.com/2013/04/02/ontario-federation-of-labour-may-need-to-trim-employees-benefits-to-solve-pension-fund-deficit/

• ORPP comments from CFIB - http://cornwallchamber.chambermaster.com/events/details/ontario-registered-pension-plan-impact-on-your-business-262

• CPPIB / Brison - http://news.nationalpost.com/2015/01/23/kelly-mcparland-justin-trudeaus-hidden-agenda/

• Auditor General Report - http://www.auditor.on.ca/en/news_en/14_newsreleases/2014news_3.03.pdf

• OMERS - http://www.bnn.ca/News/2015/2/27/OMERS-earns-10-return-in-2014-reduces-funding-shortfall.aspx

• Slush Fund - http://globalnews.ca/news/1900923/tories-demand-ontario-stop-wsib-from-operating-slush-fund-to-give-grants-to-ofl/.

• Accounting Rules: http://www.bdo.ca/en/Library/Services/assurance-and-accounting/Documents/Employee-Future-Benefits-What-you-need-to-know-about-Sections-3462-and-3463.pdf

Income inequality - AB

Private –vs- Public sector Pay

Private –vs- Public sector Pay

Private –vs- Public sector Pay

Family Tax Credit – Benefit by income Tax Bracket

Family Tax Credit

• Income Tax splitting / Accountant perspective:

• http://www.pwc.com/en_CA/ca/tax-insights/publications/pwc-income-splitting--other-tax-measures-for-families-introduced-2014-10-en.pdf

• http://www.ctvnews.ca/politics/income-splitting-among-new-tax-breaks-aimed-at-families-1.2079559

• http://www.imfcanada.org/sites/default/files/IMFC_Income%20Splitting_June2014.pdf

• http://www.charteredaccountants.ca/newsletters.html

• Vern Krishna - http://business.financialpost.com/2014/12/17/vern-krishna-income-splitting-is-fair/

• So, how does income splitting not help one spouse that makes 60K and the other none or one spouse that makes 40K the other 70K

Average Corporate Taxation

Impact of Corporate Taxation

Corporate Taxation

NDP / Mulcair – Corporate Tax

NDP / Mulcair – Corporate Tax

NDP / Mulcair – Taxing the Rich

Tax Cuts since 2006

Canada 1% (2010 Data)

Harper –vs- Justin Trudeau

• Justin Trudeau is proposing to eliminate the family tax credits and bringing in his own reforms• Assumptions

• 1% tax cut to middle class bracket by province

• Keeping the Child Deduction

• No assumptions were included on the TFSA including decreasing the limits. Justin Trudeau will have to deal with savings for retirement in separate statement.

Middle Class Family - Canada

Tax Rates for 2015 / 2015 Personal Income Tax Revenue

Middle Class Family - Canada

Harper –vs- JT Income Tax (Middle Class)Scenario – 0.5% cut to middle class income tax bracket

Harper –vs- Justin TrudeauScenario: reducing middle class tax bracket by 1% and increasing High Income tax bracket surtax by 3.66%

Assumptions:1. Average # of kids at home for Canadians family is 1

2. Justin Trudeau will imposed 3.66% surtax on high come earners as part of his tax reforms

3. Justin Trudeau will target 1% tax cut to middle income tax bracket

4. Justin Trudeau will keep the child deduction

Average Family Stats for Canada

Average Family Stats for Canada

Analysis of Justin Trudeau and Stephen Harper

TFSA Accounts

• https://newsroom.bmo.com/press-releases/bmo-annual-tfsa-report-tfsa-adoption-among-canadi-tsx-bmo-201312190918655001

• https://ca.news.yahoo.com/tfsas-wont-problem-harpers-granddaughter-145434969.html

• https://www.cpacanada.ca/en/connecting-and-news/cpa-magazine/articles/2015/April/Personal-finance-cheat-sheet

• http://open.canada.ca/data/en/dataset/10531a5e-b500-4842-a1b0-305802a1da28

TFSA Analysis

Seniors

• It is interesting that you have not reviewed the federal programs, right? It seems to me Harper has little control over hydro rates, right? http://millstonenews.com/2015/03/open-letter-to-premier-kathleen-wynne-about-hydro-costs.html or http://www.oafb.ca/tiny_mce/plugins/filemanager/pics_cms/97/297/OAFB__Hunger_Report_Dec._1_2014.pdf

•

• Federal - http://www.taxtips.ca/seniors.htm

• AB - http://www.seniors.alberta.ca/seniors/seniors-benefit-program.html

• Taxhttp://www.cpaontario.ca/MediaRoom/MediaArticles/TaxPlanArticles/1009page19641.aspx

•

• It seems to me that you are all about blaming Harper for bad policies at the provincial level, right?

Seniors

Toronto Star

Seniors

Middle Class Canada

• Comments

Middle Class Canada

• Comments

Middle Class

Middle Class

Middle Class

• Videos• http://video.lauraingraham.com/Ingraham-slams-Labrador-on-

immigration-So-youre-where-Cantor-is--26275295?playlistId=15975

or

• middle class: https://www.youtube.com/watch?v=xqLDHQ-iJU8

• Obama• http://www.theglobeandmail.com/news/politics/ndp-liberals-using-

grassroots-mobilization-tactics-from-obama-campaigns/article22216447/

Middle Class• My question to you as well as others how is going to expand the middle class? I see JT always talking about the middle class, but he never deals with either makeup of the

middle class or his policies. Here are some facts for you and/or other LPC supports to think about when it comes to middle class:

• Tax cuts – Over the past 8+ years the government has gave back $30B to Canadians: http://globalnews.ca/news/1356467/tax-cuts-since-2005-net-canadians-30b-pbo/. How come Mr. Trudeau has said nothing on the tax cuts?

• You have provinces like Ontario that have introduced health premium tax: http://www.cra-arc.gc.ca/E/pbg/tf/5006-c/5006-c-13e.pdf. People making from 50K to 72K are paying from $450 to $600 more in taxes. So, how is the health premium tax helping the middle class?

• Cost of Living – Ontario has increase the price of hydro rates: http://www.thebarrieexaminer.com/2014/11/27/common-sense-reality-check-needed. So, how come Mr. Trudeau is not talking about failed green energy policies? How is JT not saying that power costs need to be brought under control? http://news.nationalpost.com/full-comment/andrew-coyne-forget-the-liberal-mythology-canadas-middle-class-is-not-struggling

• Household Debt – Mr. Trudeau has mention numerous times that household debt is all-time high in Canada. Most of all household debt is related to mortgages. http://www.ctvnews.ca/business/hot-housing-market-high-household-debt-are-canada-s-key-economic-risks-imf-1.2119581. So, what is JT going to do help household debt? Is JT going to reduce taxes? Is JT going to change mortgage rules? Is JT going to put pressure on banks to cap housing valuations?

• Income inequality – Income inequality has been going on for the better part of 40 years. The Liberal in the 1990s did nothing on income inequality: https://www.policyalternatives.ca/newsroom/news-releases/martins-economic-record-marked-increased-income-inequality-no-real-wage-gains Here is what is said on income tax splitting: http://fullcomment.nationalpost.com/2014/11/05/andrew-coyne-conservatives-tax-package-with-income-splitting-corrects-inequality/. Justin says he would take the $2B income tax splitting and put it into infrastructure!

• Ontario has introduced the HST. HST now applies to many items that were exempt from PST: http://www.taxtips.ca/salestaxes/sales-tax-rates-2014.htm. So, how is HST helping the middle class? Additional Links: http://www.bdo.ca/en/Library/Services/Tax/pages/Tax-Factors/2014-01/Canadian-sales-tax-implications-of-selling-goods-over-the-internet.aspx

• All level governments are looking for more money as such property taxes have increases as well as the potential for new taxes/user fees: http://www.theglobeandmail.com/report-on-business/economy/economy-lab/kathleen-wynne-left-with-few-options-to-fix-ontarios-revenue-problem/article19813010/

Middle Class• Gas prices have also impacted spending as they would mean less money that can be spent elsewhere in the economy: http://www.cbc.ca/news/canada/gas-prices-here-s-

how-they-determine-what-you-pay-at-the-pump-1.1159639. Gas prices have been falling and this could benefit consumers with lower prices at the pump. JT has not one mention the price of gas other than he wants to introduce a carbon tax that could add 8 cents a liter to price of gas. So, how is an additional tax on gas going to help the middle class?

• Is JT going to look at the excise/duties/custom taxes as part of reducing the price of goods? Flaherty brought in programs to help bring consumer goods down: http://fullcomment.nationalpost.com/2014/05/08/jesse-kline-bridging-the-canada-u-s-price-gap/

• De-listing of medical services, especially in Ontario. How de-listing medical is services not a hit to the middle class. Ontario for example de-listed eye exams as well as other items. De-listing of items means people have to pick up the costs. Is JT going to force the provinces to restore medical services? http://www.optom.on.ca/OAO/Patients/Medical_Coverage/OAO/Patients/Medical_Coverage.aspx

•

• How about the lack of opportunities for students? JT constantly calls out Harper on youth unemployment: http://www.ctvnews.ca/canada/ontario-youth-unemployment-among-the-worst-in-canada-report-1.1473423. Yet Mr. Trudeau thinks we need more money for education, why? We cannot even support the current grads? Now if Mr. Trudeau said he would be looking at the apprenticeship programs with the provinces then that would be a statement: http://www.chamber.ca/media/news-releases/140206-Canadian-Chamber-Unveils-Top-10-Barriers-to-Competitiveness-for-2014/.

• OAS - http://www.therebel.media/justin_trudeau_new_ad

• Canada has one the richest middle class - http://business.financialpost.com/news/economy/canada-leading-ranks-of-shrinking-middle-class or http://www.politifact.com/truth-o-meter/statements/2014/may/20/hillary-clinton/hillary-clinton-says-united-states-falling-behind-/ or https://www.policyalternatives.ca/sites/default/files/uploads/publications/National_Office_Pubs/paul_martins_record.pdf or https://www.youtube.com/watch?v=xqLDHQ-iJU8 or https://www.youtube.com/watch?v=yOl37VcG89c or http://www.workingcanadians.ca/wp-content/uploads/2015/05/WC_CHARITIES-RADIO_30sec.mp3 or http://www.slideshare.net/paulyoungcga/taxation-policies

•

• Middle Class - http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil108a-eng.htm or https://www.youtube.com/watch?v=pICUvNi95AY or What is JT's plan? A group hug/jackets? It seems to me that neither JT nor Mulcair have a plan. I do believe both JT and TM have hidden agenda! http://news.nationalpost.com/.../kelly-mcparland-justin.... FYI - why has JT said nothing lately? Could it be his handlers are scared when JT opens up his mouth and what incoherent statement he will make to the public: https://www.youtube.com/watch?v=I0yxfQ2OyhQ

Other sources:

• Carbon Taxation / carbon pricing -http://www.slideshare.net/paulyoungcga/carbon-tax-canada-and-its-provinces

• Retail Sector / Internet taxation -http://www.slideshare.net/paulyoungcga/retail-sector-for-canada

• Corporate Taxation -http://www.slideshare.net/paulyoungcga/corporation-taxation-canada-44675640

Taxation view by CPA or Tax Experts

Income Tax splitting / Accountant perspective:

• http://www.pwc.com/en_CA/ca/tax-insights/publications/pwc-income-splitting--other-tax-measures-for-families-introduced-2014-10-en.pdf

• http://www.ctvnews.ca/politics/income-splitting-among-new-tax-breaks-aimed-at-families-1.2079559

• http://www.imfcanada.org/sites/default/files/IMFC_Income%20Splitting_June2014.pdf

• http://www.charteredaccountants.ca/newsletters.html

• Vern Krishna - http://business.financialpost.com/2014/12/17/vern-krishna-income-splitting-is-fair/