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Since the beginning of the pandemic in March 2020, the federal government has provided a wide range of pandemic benefit programs for individuals. In the main, those programs have acted to replace income lost where employment income was no longer available as businesses closed during lockdowns, or individuals were unable to work because of illness or because they were at home with young children when schools closed to in-person learning.


Canada’s retirement income system has three major components – private savings through registered retirement savings plans or registered pension plans, and two public retirement income plans – the Canada Pension Plan and the Old Age Security program. The last of those – the Old Age Security program – is the only aspect of Canada’s retirement income system which does not require a direct contribution from recipients of program benefits. Rather, the OAS program is funded through general tax revenues, and eligibility to receive OAS is based solely on Canadian residency. Anyone who is 65 years of age or older and has lived in Canada for at least 40 years after the age of 18 is eligible to receive the maximum benefit. For the second quarter of 2022 (April to June 2022), that maximum monthly benefit is $648.67.


The difficulties faced by younger Canadians in buying a first home almost anywhere in Canada, owing to both the spiraling cost of real estate and, more recently, increases in interest rates, is a major concern for those individuals and their families. Not surprisingly, then, the issue of housing affordability was a major focus of the recent federal budget, and the following measures to address that problem were announced.


For the majority of Canadians, the due date for filing of an individual tax return for the 2021 tax year was Monday May 2, 2022. (Self-employed Canadians and their spouses have until Wednesday June 15, 2022 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and tax result obtained by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


It is a sad fact that, every year, thousands of Canadians become the victims of scams in which fraud artists claim to be representatives of the federal government. Equally sadly, in most cases the money lost is never recovered.


Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.


Our tax system is complex and, understandably, its myriad rules and exceptions are a mystery to most Canadian taxpayers – and most are happy to leave it that way. There is however, one rule in the Canadian tax system which doesn’t really have any exceptions and of which most Canadian taxpayers are all too well aware. That is the rule that says individual income tax amounts owed for any tax year must be paid – in full – on or before April 30 of the following calendar year. This year, that means April 30, 2022 – although, since April 30, 2022 falls on a Saturday, the Canada Revenue Agency is providing an administrative concession by allowing taxpayers until Monday May 2 to pay their taxes without incurring any interest charges.


Most Canadians don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2021 ahead of the May 2, 2022 filing deadline.


Each year, the Canada Revenue Agency (CRA) publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. Those statistics for last year show that the vast majority of Canadian individual income tax returns — just over 90%, or just over 28 million returns — were filed online, using one or the other of the CRA’s web-based filing methods. About 2.8 million returns — or just over 9% — were paper-filed.


The Canadian tax system provides individual taxpayers with a tax credit for out-of-pocket medical and para-medical expenses incurred during the year. Given that such expenses must be incurred at some time by virtually every Canadian, that credit is among the most frequently claimed on the annual return. Unfortunately, however, the rules governing such claims are detailed, somewhat complex, and frequently confusing.


While the requirement that Canadians file an income tax return each year never changes, the actual content of that return is never the same year to year. While many of the changes — like inflation-related increases to income tax brackets and credit amounts — happen automatically and don’t require any particular awareness or action on the part of the taxpayer, this is not the case with all tax changes. In some cases, taxpayers who aren’t aware of the changes can miss out on newly available or expanded tax deductions or credits, even if they are using tax preparation software to prepare their return. While the Canada Revenue Agency (CRA) will usually catch arithmetic errors made on a return, the Agency does not (and cannot) ensure that a taxpayer has made all of the claims which are available to him or her. And perhaps the only thing worse than having to pay a tax bill is paying one that is higher than it needs to be because available deductions or credits were missed.


The list of financial assistance programs that have been provided by the federal government to support individual Canadians through two years of the pandemic is lengthy, detailed, and sometimes confusing. Unfortunately for the Canadian taxpayer, however, every one of those programs has one thing in common — benefits received are taxable income which must be reported on the return for the year in which they were received, and on which tax must be paid.


Sometime during the month of February, millions of Canadians will receive mail from the Canada Revenue Agency (CRA). That mail, a “Tax Instalment Reminder”, will set out the amount of instalment payments of income tax to be paid by the recipient taxpayer by March 15 and June 15 of this year.


Income tax is a big-ticket item for most retired Canadians. Especially for those who are no longer paying a mortgage, the annual tax bill may be the single biggest expenditure they are required to make each year. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And, in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.


If there is one invariable “rule” of financial and retirement planning of which most Canadians are aware, it is the unquestioned wisdom of making regular contributions to one’s registered retirement savings plan (RRSP). And it is true that for several decades the RRSP was only tax-sheltered savings and investment vehicle available to most individual Canadians.


As the pandemic continued past 2020 and through 2021, it is likely that employees who were able to work from home spent at least part of the 2021 tax year doing just that. And, as was the case in 2020, those workers may be entitled to claim a deduction on their 2021 tax return for home office expenses incurred.


The Employment Insurance premium rate for 2022 is unchanged at 1.58%.


The Quebec Pension Plan contribution rate for 2022 is set at 6.15% of pensionable earnings for the year.


The Canada Pension Plan contribution rate for 2022 is set at 5.7% of pensionable earnings for the year.


Dollar amounts on which individual non-refundable federal tax credits for 2022 are based, and the actual tax credit claimable, will be as follows:


The indexing factor for federal tax credits and brackets for 2022 is 2.4%. The following federal tax rates and brackets will be in effect for individuals for the 2022 tax year.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


When the Canada Pension Plan was launched in the mid-1960s, both the working lives and the retirements of Canadians looked a lot different than they do in 2018. Fifty years ago, most Canadians were able to work at a single full-time job, often held that job for most or all of their working lives and, in many cases, benefitted from an employer sponsored defined benefit pension plan which guaranteed a certain level of income in retirement.


The daily commute to and from work is, generally, everybody’s least favourite part of the work day. In recent years that commute has gotten longer and longer as many Canadians, especially those working in large urban centers, have moved further and further away from their workplaces in search of affordable family housing.


When the Canada Pension Plan was put in place on January 1,1966, it was a relatively simple retirement savings model. Working Canadians started making contributions to the CPP when they turned 18 years of age and continued making those contributions throughout their working life. Those who had contributed could start receiving CPP on retirement, usually at the age of 65. Once an individual was receiving retirement benefits, he or she was not required (or allowed) to make further contributions to the CPP. The CPP retirement benefit for which that individual was eligible therefore could not increase (except for inflationary increases) after that point.