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Canadian Budget Legislation Receives Royal Assent

Wednesday, December 24, 2014

The Canadian Government's Economic Action Plan 2014 has received Royal Assent, the final legislative step required for the implementation of key tax measures including the new Small Business Job Credit.

The Economic Action Plan 2014 Act, No. 2 received Royal Assent on December 17, 2014. It contains measures announced by Finance Minister Joe Oliver at the Budget in May, and since.

The Small Business Jobs Credit was announced in September. It is worth the difference between the Employment Insurance (EI) premiums paid at the legislated rate of CAD1.88 per CAD100 (USD86) per insurable earnings and the reduced small business rate of CAD1.60 per CAD100 of insurable earnings. It will apply in 2015 and 2016, and any firm that pays employer EI premiums equal to or less to CAD15,000 in those years will be eligible.

The Act also introduces new reporting standards to meet Canada's 2013 Group of Eight Nations (G-8) commitment to increase transparency for entities operating in the extractive sector. It eliminates graduated rate taxation for trusts and certain estates, and prevents the shifting of certain Canadian source income to no- or low-tax jurisdictions. It adjusts government policy on the exchange of information, and introduces new conditions for qualifying under the regulated foreign financial institution tax rules.

In addition, the legislation aims to support families and communities, by doubling the Children's Fitness Tax Credit and making it refundable, and by reducing the administrative burden on charities.

"Canada's Economic Action Plan benefits all Canadians as we head towards budget balance in 2015," Oliver said.