Backgrounder
List of Tax Measures Coming into Effect in 2019
Key Tax Measures Taking Effect in 2019
| Measure |
Change in 2019 |
Announcement |
| Small business tax rate reduction |
The federal small business tax rate will be reduced to 9 per cent from 10 per cent on January 1, 2019. |
Fall Economic Statement 2017 |
| Canada Workers Benefit |
Starting with the 2019 tax year, the Canada Workers Benefit (CWB) will replace the Working Income Tax Benefit (WITB). The CWB will be more generous—putting more money in the pockets of low-income Canadians as they work—and more accessible, as the Canada Revenue Agency will be able to calculate the CWB for anyone who hasn't claimed it on their tax return. Canadians will begin to receive enhanced benefits under the new CWB in early 2020, when they file their 2019 tax returns. |
Budget 2018 |
| Deduction for employee contributions to the enhanced portion of the Canada Pension Plan and Quebec Pension Plan |
With the gradual phase-in of the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) enhancements starting on January 1, 2019, a tax deduction—instead of a tax credit—will be provided for employee contributions associated with the enhanced portion of the CPP and QPP. |
Agreement reached by Canada's Ministers of Finance in 2016. Announcement by Quebec Government in 2017 that the QPP would be enhanced in a manner similar to the CPP. |
| Limiting tax deferral opportunities related to passive investments within a private corporation |
Budget 2018 announced measures to limit the ability of Canadian-controlled private corporations holding significant passive investments to benefit from the preferential small business tax rate; and to restrict Canadian-controlled private corporations from obtaining refunds of taxes paid on investment income while distributing dividends from income taxed at the general corporate rate. The changes will take effect for taxation years that begin after 2018. |
Budget 2018 |
Additional Tax Measures
| Measure |
Change in 2019 |
Announcement |
| Allowances for members of legislative assemblies and certain municipal officers |
Budget 2017 removed the tax exemptions for non-accountable expense allowances paid to members of provincial and territorial legislative assemblies, and to certain municipal office-holders. This measure will apply to the 2019 and subsequent taxation years. The reimbursement of employment expenses will remain non-taxable to the recipient. |
Budget 2017 |
| Dividend Tax Credit |
The taxation of non-eligible dividends (generally dividends distributed from corporate income taxed at the small business tax rate) will be adjusted to reflect the reduction in the small business tax rate. |
Fall Economic Statement 2017 |
| Accelerated capital cost allowance for mining |
Budget 2013 announced the phase-out of the accelerated capital cost allowance (CCA) rate for mining. The accelerated CCA took the form of an additional allowance that allowed the taxpayer to deduct up to 100 per cent of the remaining cost of eligible assets (not exceeding the taxpayer's income for the year from the mining project). As part of that phase-out, the percentage of the additional allowance that a taxpayer can claim will be reduced from 80 per cent in 2018 to 60 per cent in 2019. |
Budget 2013 |
| Canadian Exploration Expenses for discovery wells |
Expenditures related to drilling or completing a discovery well (or in building a temporary access road to, or in preparing a site in respect of, any such well) will generally be classified as Canadian Development Expenses instead of Canadian Exploration Expenses as of 2019. |
Budget 2017 |
| Reclassification of expenses renounced to flow-through share investors |
As of 2019, eligible small oil and gas corporations will generally no longer be able to treat the first $1 million of Canadian Development Expenses as Canadian Exploration Expenses when renounced to shareholders under a flow-through share agreement. |
Budget 2017 |
| Insurers of fishing and farming property |
As of 2019, the tax exemption for insurers of farming and fishing property will be eliminated. This tax exemption is based on the proportion of an insurer's gross premium, and that of its affiliated insurers, that is earned from the insurance of property used in farming and fishing, except for prescribed insurers that do not have to take into account the gross premium income of affiliated insurers when determining their eligibility for the tax exemption. |
Budget 2017 |
| Special Harmonized Sales Tax rules for investment limited partnerships |
This measure brings the Goods and Services Tax/Harmonized Sales Tax (GST/HST) treatment of investment limited partnerships in line with the GST/HST treatment of other investment plans such as mutual funds, segregated funds and pension plans. It does this by ensuring that the base of taxation in respect of the provincial component of the HST is based on the location of the investment limited partnership's investors instead of the location of the investment limited partnership's general partner. This measure generally takes effect as of January 1, 2019. |
Department of Finance Canada news release of September 8, 2017. Confirmed by Budget 2018. |
