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Alberta
British Columbia
Ontario
Québec (English Version)
Québec (Version Française)
Saskatchewan
2013 Alberta Budget Highlights
Regan A. O’Neil, Calgary
The 2013 Alberta Budget tabled by The Honourable Doug Horner, Minister of Finance, on March 7, 2013 received royal assent on April 29, 2013.
Corporate and Personal Income Taxes
There were no changes to corporate or personal income tax rates. The general and manufacturing and processing corporate income tax rates for the upcoming year will both remain at 10%. The small business corporate income tax rate of 3% and the small business income limit of $500,000 have not changed.
Alberta’s personal income tax system is indexed to inflation. Accordingly, the basic personal and spousal tax credits increased from $17,282 to $17,593 for 2013. There is no change to the 10% personal income tax rate applicable to all income for Alberta residents.
Education Property Taxes
There was a slight decrease in education property tax rates of 1.8%. Education property tax rates on residential and farmland properties will be reduced from $2.70 to $2.65 per $1,000 of assessed value. For commercial properties, the education property tax rate will decrease from $3.97 to $3.90 per $1,000 of assessed value.
Seniors’ Property Tax Deferral Program
The Alberta Government has introduced the Seniors’ Property Tax Deferral Program (the “Program”). The Program allows seniors to defer payment of property taxes until the sale of their property. For an individual to be eligible to participate in the Program, the person must be an Alberta resident who is at least 65 years old and has a minimum of 25% equity in their property. In addition, the property must be a residential property located in Alberta that qualifies as the person’s primary residence. The details of the Program are included in the Seniors’ Property Tax Deferral Act.
Sales Tax
While there have been some rumblings of bringing in a sales tax, no sales tax was introduced in the 2013 Alberta Budget.
2013 British Columbia Budget Highlights
Stephen Rukavina, Vancouver
The 2013 British Columbia Budget introduced several tax measures. The two most significant were changes to the corporate and personal income tax rates.
Corporate and Personal Income Taxes
The Budget increases British Columbia’s general corporate income tax rate from 10% to 11%. The effective date of this change is April 1, 2013. There will be no change in British Columbia’s small business corporate income tax rate, which remains at 2.5%.
The Budget also creates a new top personal income tax bracket for the years 2014 and 2015. The new top tax bracket applies to taxable income exceeding $150,000. An individual’s taxable income that falls within this new top tax bracket will be subject to provincial income tax at the rate of 16.8%. Previously, such income was subject to provincial income tax at the rate of 14.7%. This new top tax bracket is set to expire on December 31, 2015.
Provincial Sales Tax Regime
The Budget also discussed the transition back to the provincial sales tax (“PST”) regime. On April 1, 2013, the PST and goods and services tax (“GST”) regimes replaced the harmonized sales tax (“HST”) regime. Transactions with a connection to British Columbia will now potentially be subject to the PST and the GST, rather than simply the HST. The PST applies mainly to goods, but it also applies to certain services. The PST can also apply to the transfer of certain business assets under an asset sale or rollover transaction.
2013 Ontario Budget Highlights
Patrick Déziel, Toronto
The 2013 Ontario Budget was introduced on May 2, 2013 by The Honourable Charles Sousa, Minister of Finance. It contained little in the way of substantive changes to Ontario’s tax system as a whole. It announced no changes to corporate and personal income tax rates. Although Ontario’s general corporate income tax rate had been scheduled to decrease to 10% by July 1, 2013, the freeze implemented by the 2012 Ontario Budget remains in force such that the general corporate income tax rate will remain at 11.5% for 2013.
Employer Health Tax
Ontario’s Employer Health Tax (“EHT”) is a tax paid by employers based on the aggregate remuneration paid to employees. The maximum tax rate is 1.95% of the employer’s aggregate annual remuneration. In 2012, most employers were eligible for an exemption on their first $400,000 of aggregate remuneration paid in the year. The 2013 Ontario Budget proposed to increase the annual exemption to $450,000, indexed for inflation. However, private sector employers with aggregate payrolls of over $5,000,000 will cease to be eligible for this exemption.
Tax Loopholes and Integrity of Tax System
The 2013 Ontario Budget announced Ontario’s commitment to closing tax loopholes and improving the integrity of the tax system. It stated that the Ontario Government is working closely with the Federal Government to accomplish these objectives. The Ontario Government also indicated its intention to propose changes to update and strengthen provincial securities laws and related legislation.
Ontario Trillium Benefit
The Ontario Trillium Benefit is a combination of three Ontario-specific refundable credits paid by the Ontario government to eligible residents of Ontario. When the three credits were combined pursuant to the 2011 Ontario Budget, they went from being paid as an annual lump-sum (following the filing of an individual’s income tax return for the prior year) to being paid in equal monthly instalments. This change upset many Ontario taxpayers who had come to rely on the lump-sum payment to offset other Ontario taxes or for other purposes. The 2013 Ontario Budget proposed to give Ontario residents a choice to opt out of the monthly payment plan and to receive the Ontario Trillium Benefit as an annual lump-sum beginning in respect of the 2013 taxation year return to be filed in 2014.
The change relating to the Ontario Trillium Benefit was enacted by Bill 65, Prosperous and Fair Ontario Act (Budget Measures), 2013, which received Royal Assent on June 13, 2013.
Apprenticeship Tax Credit
Ontario’s Apprenticeship Tax Credit will no longer be available to the following apprenticeship trades effective for expenditures incurred after March 31, 2014:
- Information Technology – Contact Centre – Technical Support Agent (634a);
- Information Technology – Contact Centre – Inside Sales Agent (634d); and
- Information Technology – Contact Centre – Customer Care Agent (634e).
Other Tax Changes
The Ontario Government also announced several changes to provincial tax legislation to mirror changes announced in the 2013 Federal Budget, including the extension of the accelerated capital cost allowance for manufacturing and processing machinery and equipment, changes to the non-eligible dividend tax credit regime, and other federal tax measures.
English Version
In November 2012, the Quebec Minister of Finance and the Economy, Nicolas Marceau, tabled the 2013-2014 Quebec provincial budget.
Measures Affecting Individuals
A fourth tax bracket was introduced for an individual’s taxable income in excess of $100,000 at the rate of 25.75%. The amount of tax instalments to be made by an individual must be calculated as if this new tax bracket existed since 2011 so that an individual’s 2013 tax instalments reflect the addition of this new tax bracket.
As a result of the introduction of this new tax bracket, the following other consequential amendments are made:
- Individual tax rate respecting split income of minors and individual tax rate applicable to an income-averaging annuity payment respecting artistic activities are both increased by 1.75%.
- Individual tax rate on excess profit sharing plan amount has been increased to 25.75%.
- For purpose of calculating the alternative minimum tax, the proportion of the capital gain taken into account in computing adjusted taxable income is increased from 75 to 80% for the 2013 taxation year.
- The maximum marginal tax rate applicable to capital gains realized by non-residents on the disposition of taxable Quebec property (e.g., real or immovable property located in the Province of Quebec) increases from 12% to 12.875% for dispositions after December 31, 2012.
Measures Affecting Inter Vivos Trusts
For taxation years ending after March 19, 2012, the tax rate applicable to inter vivos trusts increases from 24% to 25.75%. This is consistent with the addition of the fourth tax bracket for individuals as discussed above. Tax instalments to be made by inter vivos trusts in 2013 will be determined as if this new tax bracket had been in effect since 2011.
As a result of this tax increase, the tax rate applicable to a non-resident inter vivos trust that earns rental income from immovable property located in Quebec and used primarily for the purpose of earning such income will increase from 5.3% to 7.05% for the 2013 taxation year. Such trusts will now be required to file a Quebec trust tax return for each taxation year in which they own rental property whether or not tax is actually payable.
In addition, inter vivos trusts will now be required to file a Quebec trust tax return in the following circumstances:
- The trust deducts in computing its income for the taxation year, an amount allocated to a beneficiary, regardless of the beneficiary’s residence.
- In the case of a trust resident in Quebec on the last day of the taxation year, it owns at any time in the taxation year property with a total cost in excess of $250,000.
- In the case of a trust that is not resident in Quebec on the last day of the taxation year, it owns at any time in the taxation year property used in carrying on a business in Quebec with a total cost in excess of $250,000.
Measures Affecting Corporations
The 2013 Quebec Budget includes an amendment to the Quebec tax holiday for major investment projects by replacing the current regime with a new one. The new Quebec tax holiday is designed specifically for companies in the manufacturing, wholesale trade, storage, processing and data hosting and related services sectors.
This new regime will allow a company or a partnership making a major investment in a Quebec project to benefit from a tax holiday on the income related to that investment. It will also provide a tax holiday for the employer contribution to the Health Services Fund with respect to the portion of wages paid to employees for the time spent on eligible activities related to the project.
In order to benefit from this new regime, the project will have to achieve and maintain a minimum threshold of $300 million in investment. The tax holiday is for a period of ten years and may not exceed 15% of the total eligible investment expenditures for the project.
The Quebec Government also announced an enhancement to the manufacturing and processing tax credit depending on the area in which the investment is made. The base rate for this credit is 5% which can be increased up to 40% when qualified assets are acquired for a specific use in a remote zone, 30% in the Bas-St-Laurent administrative region and 20% in an intermediate zone. This credit can generally be deducted by qualified corporations from their income tax, refunded or carried over to subsequent taxation years. In addition, the definition of « qualified property » is amended so that all eligible assets acquired before January 1, 2018 can be treated as qualified property for the purpose of this credit.
The refundable tax credit applicable to wages related to research and development in the biopharmaceutical sector is increased from 17.5% to 27.5%. This temporary increase is planned for a period of 5 years. When a biopharmaceutical company qualifies as a small-medium size enterprise, the credit can be up to 37.5%, depending on the consolidated value of its assets.
For further information regarding the various tax amendments included in the 2013 Quebec Budget, please contact the following tax lawyers in our Montreal office:
Richard Barbacki, Montréal
Bertrand Leduc, Montréal
Nathalie Marchand, Montréal
Normand Royal, Montréal
En novembre 2012, le ministre des Finances et de l’Économie du Québec, M. Nicolas Marceau, a déposé le budget provincial 2013-2014.
Mesures touchant les particuliers
Un quatrième palier d’imposition est ajouté par lequel la tranche de revenu imposable supérieure à 100 000$ est imposée à un taux de 25.75%. Afin que les acomptes provisionnels versés en 2013 reflètent ce changement, ils devront être calculés comme si le quatrième palier de la table d’imposition s’appliquait depuis 2011.
Étant donné l’instauration d’un nouveau palier d’imposition, plusieurs autres changements sont apportés à la législation fiscale :
- Le taux d’impôt sur le revenu fractionné des enfants mineurs ainsi que le taux d’impôt spécial sur le paiement d’une rente d’étalement du revenu provenant d’activités artistiques augmentent tous deux de 1,75%.
- L’impôt sur les excédents d’un régime d’intéressement est dorénavant calculé à un taux de 25,75%.
- Aux fins du calcul de l’impôt minimum de remplacement, la proportion du gain en capital prise en considération dans le calcul du revenu imposable modifié passe de 75 à 80% pour l’année d’imposition 2013.
- Le taux d’imposition marginal maximal s’appliquant au gain en capital passe de 12% à 12,875%, augmentant ainsi le fardeau fiscal des non-résidents réalisant un gain en capital à l’aliénation de biens québécois imposables (ex. : immeubles situés au Québec) après le 31 décembre 2012.
Mesures touchant les fiducies non testamentaires
Pour toute année d’imposition se terminant après le 19 mars 2012, le taux applicable pour déterminer l’impôt à payer par une fiducie non testamentaire passe de 24% à 25.75%. Cette mesure concorde avec l’ajout d’un quatrième palier d’imposition pour les particuliers dont le revenu imposable excède 100 000$. Afin de tenir compte de ce changement, les fiducies non testamentaires soumises au paiement d’acomptes provisionnels devront calculer ceux-ci comme si la hausse du taux d’imposition était en vigueur depuis 2011.
Conséquemment à cette hausse de 1,75%, le taux d’impôt auquel une fiducie non testamentaire ne résidant pas au Canada est assujettie sur son revenu de bien tiré de la location d’un immeuble situé au Québec, qui est utilisé principalement pour gagner un revenu qui constitue un loyer, passe de 5,3% à 7,05% pour l’année d’imposition 2013. Ces fiducies sont maintenant tenues de produire une déclaration fiscale pour chaque année d’imposition où elles sont propriétaires d’un tel immeuble locatif, qu’elles aient ou non un impôt à payer.
En outre, la législation fiscale est modifiée afin que les fiducies non testamentaires qui n’étaient pas autrefois contraintes de produire une déclaration fiscale le soient désormais. Les situations visées sont les suivantes :
- Lorsque la fiducie déduit dans le calcul de son revenu pour l’année d’imposition un montant attribué à un bénéficiaire, et ce, peu importe la résidence du bénéficiaire.
- Dans le cas d’une fiducie qui réside au Québec le dernier jour de l’année d’imposition, elle est propriétaire, à un moment quelconque de cette année d’imposition, de biens dont le total des coûts indiqués est supérieur à 250 000$.
- Dans le cas d’une fiducie qui ne réside pas au Québec le dernier jour de l’année d’imposition, elle est propriétaire, à un moment quelconque de cette année d’imposition, de biens qu’elle utilise dans l’exploitation d’une entreprise au Québec dont le total des coûts indiqués est supérieur à 250 000$.
Mesures touchant les sociétés
Le Budget de 2013 prévoit une modification du congé fiscal pour les projets majeurs d’investissement en remplaçant le régime actuel par un nouveau régime. Ce nouveau régime s’adresse spécifiquement aux entreprises du secteur de la fabrication, du commerce de gros, de l’entreposage, du traitement et de l’hébergement de données et de services connexes.
Ce nouveau régime permettra à une société ou à une société de personnes réalisant un projet majeur d’investissement de bénéficier d’un congé d’impôt sur le revenu relativement à cet investissement. Il permettra également aux employeurs d’obtenir un congé de cotisation au Fonds des services de santé à l’égard de la partie des salaires versés aux employés et attribuable au temps consacré par eux aux activités admissibles relatives à ce projet.
Afin de bénéficier de ce nouveau régime, le projet devra atteindre et maintenir un seuil minimum de 300 millions de dollars d’investissement. Il pourrait alors bénéficier d’un congé fiscal d’une durée de dix ans qui ne peut toutefois excéder 15% du total des dépenses d’investissement admissibles relatives au projet.
Le ministre Marceau a également annoncé une bonification du crédit d’impôt relatif au matériel de fabrication et de transformation selon la région ou la zone dans laquelle l’investissement est effectué. Ce crédit d’impôt, dont le taux de base est de 5%, peut atteindre 40% lorsque les biens admissibles sont acquis pour être utilisés principalement dans une zone éloignée, 30% dans la région administrative du Bas St-Laurent et 20% en zone intermédiaire. Le crédit donne aux sociétés admissibles la possibilité de le déduire de l’impôt à payer ou, s’il ne peut l’être, de le reporter ou d’avoir un remboursement. En outre, la définition de «biens admissibles » est modifiée de façon à ce que tous les biens admissibles acquis avant le 1e janvier 2018 soient éligibles au crédit d’impôt.
Le crédit d’impôt remboursable sur les salaires relativement à la recherche et développement dans le secteur biopharmaceutique se verra augmenté de 17,5% à 27,5%. Cette hausse temporaire est prévue pour une durée de 5 ans. Lorsque la société biopharmaceutique se qualifie comme petite ou moyenne entreprise ce crédit peut atteindre 37,5%, selon la valeur consolidée de son actif.
Pour de plus amples informations ayant trait au Budget de 2013, n’hésitez pas à consulter les avocats de notre groupe d’expertise en fiscalité de notre bureau de Montréal.
Richard Barbacki, Montréal
Bertrand Leduc, Montréal
Nathalie Marchand, Montréal
Normand Royal, Montréal
2013 Saskatchewan Budget Highlights
Graham Purse, Regina
On March 20, 2013, The Honourable Ken Krawetz, Minister of Finance, tabled the 2013 Saskatchewan Budget. The Budget contains moderate increases in spending and significant increases in Pigouvian taxes on alcohol and tobacco products.
Revenues are higher than expected while growth in expenses is lower than expected. The Budget forecasts revenues of $11.6 billion and a surplus of $64.8 million. This represents an increase in the General Revenue Fund of $212 million over the forecast in the 2012-2013 Budget. The additional revenues result from higher taxes and non-renewable resource revenues. Tax revenues and non-renewal resource revenues account for 75% of the General Revenue Fund.
Debt servicing expenses are set to proportionally decrease based on expenditures from 3.6% to 2.9%. Federal Government transfers are set to decrease by $66.8 million to $1.6 billion.
Corporate and Personal Income Taxes
Corporate and personal income tax rates have not changed. Although the Saskatchewan Government had promised to reduce the general corporate income tax rate from 12% to 10%, this reduction has been deferred “until it is deemed sustainable to do so.”
Alcohol and Tobacco Taxes
A key area of media focus in the 2013 Budget has been increases in “sin” taxes. As at Budget Day, tobacco tax increased from 21 cents to 25 cents per cigarette or gram of tobacco. It is forecasted that such an increase will yield an additional $45.2 million in revenues.
Like tobacco, liquor taxes are on the rise. Effective April 1, 2013, Saskatchewan Liquor and Gaming Authority adjusted mark-up rates for liquor by 3%.
Education Property Taxes
Education property tax mill rates are reduced in the Budget. The purpose of this reduction is to significantly offset increases in property values. Overall, revenues for education are set to increase. Universities and regional colleges will receive a 2.1% operating increase. This increase closely approximates the Consumer Price Index data from Statistics Canada for Saskatchewan.
Pooled Registered Pension Plans
There are significant changes to pensions in Saskatchewan. The Saskatchewan Government is introducing The Pooled Registered Pension Plans Act which is designed to closely mirror its federal counterpart. The purpose of the legislation is to make pooled registered pension plans available to all Saskatchewan employees and self-employed persons. The program will be voluntary for employers. It is intended that the plan will be simple to administer for employers.
Uranium Royalty Regime
Non-renewable resource revenues constitute a significant portion of Saskatchewan’s General Revenue Fund. The 2013 Budget modernized the uranium royalty regime. The policy reason behind this initiative is to encourage increased investment in northern Saskatchewan.
