New Legislation: The Economic Action Plan 2014 Act, No. 2

New legislation from the Department of Finance, The Economic Action Plan 2014 Act, No. 2, received Royal Assent on December 17.

The new Act has three stated objectives: supporting jobs and growth, supporting families and communities, and improving the fairness and integrity of Canada’s tax system. By creating a new Small Business Jobs Tax Credit - doubling the Children’s Fitness Tax Credit - making it refundable and making it more difficult to shift certain Canadian source income to other jurisdictions - the Department of Finance believes it has attained its objectives.

Other changes made by the new legislation include:

- an “income-splitting” non-refundable Family Tax Cut Credit for couples with children under the age of 18;

- increases to the Universal Child Care Benefit (to $160/month for children under the age of six);

- an increase of $60/month for the Universal Child Care Benefit for children six through seventeen;

- the repeal of the Child Tax Credit; and

- an increase of each of the maximum dollar limits of the Child Care Expense Deduction by $1,000.

Furthermore, a promise from Economic Action Plan 2014 is realized in the new provision for amateur athlete trusts that permits income contributed to an amateur athlete trust to qualify as earned income for RRSP contribution limit purposes; an election is available to taxpayers for up to a three-year retroactive application.

The new legislation implements laws that go beyond tax and finance, but still accord with the three overreaching objectives. For instance, it also encompasses changes that will assist Canadian police in finding and identifying missing persons.

For more information see: http://www.fin.gc.ca/pub/c43/index-eng.asp

Greer Jacks practices law in British Columbia and updates EverGreen Explanatory Notes for Knowledge Bureau for recent jurisprudence.