Box-tax

Taxes are a hot-button issue. And your parliamentarians aren’t shy about debating it: Our friends at Maclean’s have calculated that MPs said the word “tax” 2,617 times in the House of Commons over the first six months of 2015.

This election, the fate of several government pocketbook initiatives hangs in the balance. Prior to dissolving Parliament, Prime Minister Stephen Harper introduced a series of tax concessions, including an enhanced UCCB, income splitting for families and an increased TFSA limit. On the TFSA, the Conservative Party alone would keep the contribution limit at $10,000. The other three parties would restore contribution room to $5,500.

Read: Politics could shrink TFSA contribution room

To learn more about the parties’ tax pledges, we spoke to:

  • Deborah Coyne, senior policy advisor, Green Party of Canada
  • John McCallum, Liberal Party of Canada candidate in Markham-Thornhill and past National Revenue minister
  • Mélanie Richer, press secretary, New Democratic Party of Canada

The Conservative Party did not respond to multiple requests for comment.

Bookmark this page — we’ll continue to update it as the parties release more information about their spending priorities.

Income taxes

How will personal tax rates change, if at all?

Conservative Party
  • Proposes a “tax lock” that would disallow increases to federal income taxes and sales taxes, and new, discretionary payroll taxes, over the next four years.
Green Party
  • “Consumption taxes are better than personal income taxes. It’s consumption that harms the environment so that needs to be adjusted [i.e., through a carbon tax]. So we can see a shift to consumption taxes providing more revenue than they are now.”
  • Would repeal FATCA.
Liberal Party
  • Rate for taxable income between $44,700 and $89,401 would drop from 22% to 20.5%, for tax savings worth up to $670 a year per person.
  • Tax rate for income above $200,000 would increase to 33% from 29%. On a $250,000 income, this would mean paying up to $1,329.50 more. The party says this change would be revenue-neutral: “We think the highest-income people can pay a bit more, and we can use that money to reduce the tax on the middle class.”
New Democratic Party
  • Would not raise personal income tax rates. “There are already many Canadians facing marginal tax rates of 50% or more. The government should be closing tax loopholes that disproportionately benefit the wealthiest Canadians.”
  • Would eliminate tax breaks on stock options. More specifically, the NDP’s full platform document says, “The [party] will eliminate the unfair CEO stock option loophole and redirect
    every penny of this tax break, which largely benefits people earning over $250,000, into eliminating child poverty.”

Credits and deductions

What will you do about the UCCB? The TFSA limit? What other taxes, credits and/or deductions do you plan to introduce and/or repeal?

Conservative Party
  • New tax break on home renovations would provide a 15% tax credit on major, permanent renovations between $1,000 and $5,000.
  • Under Home Buyer’s Plan, would permit tax-free RRSP withdrawal of $35,000 instead of $25,000.
  • Would increase Adoption Expense Tax Credit from $15,000 to $20,000 and make it fully refundable.
  • Would increase the federal RESP grant to low- and middle-income families. Families earning up to $44,000 would get $200 for the first $500 saved in the RESP each year. Families that earn up to $88,000 would get $100 on the first $500 each year.
  • Would increase matching funds toward tax-free RDSPs to $4,000 per year.
  • Service club members (e.g., Kiwanis Club, Royal Canadian Legion) would be able to claim up to 29% of their membership costs under the charitable donations tax credit.
  • Would maintain Universal Child Care Benefit increase from $100 to $160; $60-per-month benefit for children aged 6 through 17.
  • Would extend Mineral Exploration Tax Credit for three years.
  • Would maintain reduced minimum RRIF withdrawal rates.
  • Would maintain increased TFSA contribution limit of $10,000.
  • Would cut payroll taxes by over 20% in 2017.
Green Party
  • Would eliminate boutique tax credits that were introduced in 2006 (e.g., credit for children’s music classes or workers’ tools).
  • Would eliminate Universal Child Care Benefit.
  • Would consider tax on estates worth more than $5 million.
  • Would reform the Working Income Tax Benefit.
  • Would close loopholes related to offshore tax havens.
  • Would re-introduce and expand the home renovation tax credit.
  • Would return TFSA contribution rates to $5,500 from $10,000 (but index it to inflation).
Liberal Party
  • Would replace the UCCB with the Canada Child Benefit, a tax-free monthly benefit for the middle class. Families would receive up to $6,400 a year per child under six and up to $5,400 a year per child aged six to 17. The amount would decrease as family income rises. Families with incomes of $200,000 or above would not get a benefit. “Every household earning $150,000 or less will get more under our plan.”
  • Would keep the labour-sponsored venture capital corporation tax credit, which is slated to be phased out. It’s a 15% federal tax credit for investments of up to $5,000 a year into labour-sponsored retirement funds.
  • Would reform EI eligibility and cut premiums.
  • Would create a Teachers School Supply Tax Benefit, a refundable credit worth up to $150 for teachers and educational assistants who buy their own classroom supplies.
  • Would allow Canadians to put RRSP money toward buying a house more than once.
  • Would return TFSA contribution rates to $5,500 from $10,000. “We think a $5,500 limit is enough for the great majority of Canadians.”
New Democratic Party
  • Would honour the enhanced UCCB plan unveiled by the Harper government last fall.
  • Would create one million affordable childcare spaces and a $15-per-day national childcare program.
  • Would return TFSA contribution rates to $5,500 from $10,000.

Income splitting

What is your position on senior and family income splitting?

Conservative Party
  • Through the Family Tax Cut, would continue to allow couples with children under 18 to split their income (up to $50,000) and reduce tax by up to $2,000.
Green Party
  • Would eliminate income splitting for families with children under 18. “What’s in place now only benefits a small slice of the population and it’s not a good use of tax revenues.”
Liberal Party
  • Would keep pension income splitting.
  • Would eliminate income splitting for families with children under 18. “It’s more effective to put money directly into the pockets of families with children, and the way in which we are paying for the increased child benefit is to not do this income splitting.”
New Democratic Party
  • Would keep pension income splitting.
  • Would eliminate income splitting for families with children under 18. “Family income splitting […] overwhelmingly benefits the wealthiest Canadians, while doing nothing for 85% of Canadians.”

Business taxes

How will corporate and small business tax rates change, if at all?

Conservative Party
  • As announced in Budget 2015, would reduce small business tax rate from 11% to 9% by 2019.
  • No announced proposals to change 2012 reduction of corporate tax rate to 15%.
Green Party
  • Would reduce small business tax rate to 9%.
  • Would raise corporate tax rate to 19% by 2019. “We’re already low with corporate tax levels and this is a reasonable step to take to build a better economy.”
Liberal Party
  • Would reduce small business tax rate from 11% to 9% by 2019. “We think small business is crucial to the economy, so we are happy to accept this reduction in the tax rate.”
  • No plans to change corporate tax rates. “We don’t want to raise the corporate tax rate, which would [adversely] effect investment in this country, and jobs.”
New Democratic Party
  • Would lower the small business tax rate from 11% to 9% over its first two years in government. In a Facebook Q&A, Mulcair said, “We want to kick-start the economy with a tax break for small and medium sized businesses. This is immediate aid and [will be] permanent for the creators of jobs from here.”
  • Would increase corporate tax rates from 15% to 17%, for the next fiscal year, to raise about $3.7 billion. NDP wants to “ensure Canadian businesses are more than competitive with those in our largest trading partner, the U.S.”

Want more? Check out Advisor’s 2015 Election Guide.

Originally published on Advisor.ca

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