January 17th, 2018 ~ Vol. 89 No. 3
Chamber Luncheon recap: new tax rules for 2018
Crowsnest Pass Herald Front Page
Anna Kroupina Photo
Dennis Robin from Robin & Co. Chartered Accountant presented some of the tax changes for 2018, which will have big implications for businesses, particularly when it comes to income sprinkling among family members.
Pass Herald Reporter
At a Chamber of Commerce Monthly Luncheon on January 10, Dennis Robin from Robin & Co. Chartered Accountant went over some of the tax changes that either came into effect in recent years and, most significantly, some of those that await us for the 2018 tax year.

Robin noted that the 2018 tax rules have not been released in their entirety. Certain changes have come into effect as of January 1, 2018, while the government has yet to confirm others.

Private corporations will see several major tax changes for 2018.

As of January 1, 2018, the government announced that it would be cracking down on three tax components: split income (TOSI), or “income sprinkling”, earning passive investment income in a corporation and converting income into capital gains.
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Robin spoke critically of the changes, stating that they are hard to interpret, clog the courts, are convoluted and use the word “reasonable.”

“Who determines that?” says Robin. “If I’m an 18-year-old kid and I’ve got a 400-horsepower Corvette and I’m driving down the highway, what if the speed limit was reasonable? There are drastically different opinions here.”

Another big change for business owners comes in the provincial Employment Standards Code. Robin highlighted two major changes in how employers would compensate their workers.
The first major change is in how they pay out statutory holiday pay for their employees. Under the new public holiday pay formula, employers are obligated to pay overtime wages to all employees, even if they were not scheduled to work on the stat holiday.

“Think about the consequences,” says Robin. “You have Tim Hortons, where people work [every day of the week]. You have an oil company or a mine company where you’ve got four days on, four days off. They now have to pay stat to everybody, not just the people that were on shift that day or the day before or after.”
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The second major change is in how overtime is banked and paid out. Overtime banking will be calculated at 1.5 for all overtime hours worked.
The province has also announced an increase to the minimum wage from $13.60/hour to $15/hour as of October 1, 2018.

In 2016, a significant tax change was that property owners needed to disclose all sales of a principal residence. Income splitting – a tax reduction where one could transfer up to $50,000 of income to a spouse with lower income was allowed if they had a child under 18 years of age - was removed.

In 2017, a significant change was the elimination of the federal education, textbook and public transit expenses. The children’s arts amount and fitness tax credits were also removed. In healthcare, individuals who needed medical intervention to conceive a child became eligible to claim expenses, a credit allowable in retrospect for the past 10 calendar years. Additionally, a gift of ecologically sensitive land cannot be made to a private foundation after March 21, 2017.

To avoid penalties, Robin suggests to always file taxes on time. Generally, you can make a change to a return going back 10 calendar years. He also emphasized the importance of conserving tax returns, bills of sale and paperwork for capital assets, even for deceased family members.
January 17th, 2018 ~ Vol. 89 No. 3
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