Personal Tax Rate Changes 2017

There are no income tax increases in the budget (includes personal, corporate and capital gains inclusion rate). Both the federal and Alberta marginal tax rates remain the same as the previous year. The only tax rate changes are the increased tax brackets. These new tax brackets will not affect most Canadians, but will mean more money for tax filers that fit into the changed range.

“There are a few changes that are unique for 2017 but the average Canadian is not going to see much difference between 2016 and 2017,” – Jamie Golombek, managing director of tax and estate planning for CIBC Wealth Advisory Services.

Changes in the 2017 Federal Budget That May Affect You

In the new 2017 Federal Budget, the government is cancelling four child tax credits: arts, fitness, education and textbooks. There will no longer be income splitting for families; the tax credit for income splitting was capped at $2,000, this is no longer available. Lastly, regulars of the Calgary Public Transit will no longer be eligible for the credit of public transit passes and electronic fare cards.

Childcare

Canadians who are expecting will be happy to know that the government extended parental leave and benefits to 18 months. However, parents taking the extended leave will have a lower Employment Insurance (EI) benefit rate of 33% rather than 55% of their average weekly earnings.

Caregiver

The current three caregiver credits will be replaced with a single tax credit: the Canada Caregiver Credit. It provides a 15% non-refundable tax credit, available beginning of the 2017 taxation year.

Business Income Tax Measures

In Alberta, the small business corporate income tax rate has reduced from 3% to 2%. Nationally, the general corporate tax rate and the small business tax rate remains at 15% and 10.5% respectively in Budget 2017.