Oct 13

Federal Budget: What’s In, and What’s Out

Here are selected highlights of what’s in and what’s out now that the federal budget has been
tabled.

WHAT’S IN
(Explanations of tax credits are courtesy of EY’s report on the budget.)
Tax Evasion Crackdown — Over five years, $523.9 million is allocated to prevent tax
evasion and improve tax compliance, including more auditors, a crackdown on high-risk
avoidance cases and better investigative efforts.
Tuition Tax Credit — Eligibility criteria for the tuition tax credit is extended to amounts
paid for tuition to a post-secondary institution in Canada for occupational skills courses
that aren’t at the post-secondary level.
Caregiver Tax Credits — The infirm dependant tax credit, the caregiver tax credit and
the family caregiver tax credit will be replaced with a new 15% non-refundable Canada
caregiver credit for 2017 and subsequent years. Amounts that can be claimed remain
consistent, reports EY.
Disability Tax Credit — Nurse practitioners will be added to the list of medical
practitioners allowed to certify eligibility for the 15% non-refundable disability tax credit.
This applies to disability tax credit certifications made on or after March 22, 2017.
Medical Expense Tax Credit — Those who incur costs related to reproductive
technologies, such as in-vitro fertilization, but don’t have a medical infertility condition
are now eligible to claim this credit. The measure applies to 2017 and subsequent year.
But taxpayers can elect, in a year, to apply for any of the immediately preceding 10
taxation years.
Mineral Exploration Tax Credit — As previously announced on March 5, 2017, this tax
credit, equal to 15% of specified mineral exploration expenses incurred in Canada and
renounced to flow-through share investors, will be extended to flow-through share
agreements entered into on or before March 31, 2018. The credit was scheduled to expire
on March 31, 2017.  
Higher Taxes for Smokers and Drinkers — The excise duty rate on cigarettes goes up to
$21.56 per carton of smokes, from $21.03, while the rates on alcohol are going up $2.
Both will be adjusted every April 1 starting next year, based on the consumer price index.
Increases on Employment Insurance Premiums — EI’s now $1.68 per every $100 of
insurable earnings, up from $1.63. This is the maximum allowable increase under the
Employment Insurance Act.

WHAT’S OUT 
Canada Savings Bonds — First established in 1946, the bond program’s no longer cost
effective and is being phased out. The decline in the program’s popularity “can be
attributed to the proliferation of higher-yielding alternative retail investment instruments,
such as government of Canada insured retail products,” budget documents say.
Public Transit Tax Credit — Say goodbye to deducting the cost of transit passes,
effective July 1.
Home Relocation Loan Deduction — Effective 2018, relocating employees can no longer
deduct these loans.

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