Canadians Doing Business In China can Now Use The Renminbi

Three important initiatives were announced by Finance Canada this week:  a US-dollar denominated global bond issue and second, more significantly the launch of North America’s first trading hub using Chinese currency, the renminbi or RMB, which is poised to take a leading position as a global trading currency, after the US Dollar and the Euro.

Lastly, Finance Minister Joe Oliver tabled in the House a motion to implement the Government’s latest tax cuts for families, which were announced by Prime Minister Stephen Harper on October 30, 2014.

First, to the bond issue.  According to Finance Canada, the “bond issue will provide funds to supplement and diversify Canada’s foreign exchange reserves and to meet foreign currency requirements.” This is Canada’s fifth foreign currency bond issue in the last number of years.  Canada priced the U.S. dollar global bond for $3.5 billion, stating that the proceeds of the bond “will supplement and diversify Canada’s foreign exchange reserves.”

Also, Finance Canada announced the launch this week of North America’s first renminbi trading hub by the Industrial and Commercial Bank of China, in Toronto is sure to be a significant one in Canada’s economic development.  The bank has been designated the renminbi clearing bank for Canada, which means that Canadian firms doing business in Canada can use the renminbi instead of another currency, like the US dollar to do business in China.    According to the release, Canadian exports to China have more than quadrupled since 2003.  Two way trade in 2014 totalled $78 Billion. 

According to HSBC, “The Chinese government is actively seeking to internationalize the RMB to match China’s global economic status. The Chinese government policy is to promote international use of the RMB in three stages through trade, investment and as a reserve currency. This represents new opportunities for companies, financial institutions and personal investors.”

The latest tax cut will impact some 4 million Canadian families.

The Family Tax Cut is a new tax credit aimed at couples with young children. The tax cut allows a spouse to transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. This could bring a maximum tax saving of $2,000 for couples with children under the age of 18.

The Child Care Expense Deduction dollar limits would increase by $1,000, effective as of the 2015 taxation year. The maximum amounts that can be claimed would increase to

• $8,000 from $7,000 for children under age 7

• $5,000 from $4,000 for children aged 7 through 16

• $11,000 from $10,000 for children who are eligible for the Disability Tax Credit

The Child Tax Credit would be replaced with an enhanced Universal Child Care Benefit (UCCB) for 2015 and beyond.

Buy Canadians and the IRS and any other two Knowledge Bureau books for ONLY $60! Click here to see what our website has to offer.