Tax Credit Watch: Should They Stay Or Should They Go?

Evelyn Jacks

Governments are long on promises but short of money these days, as deficits grow both provincially and federally.  Will prior tax preferences be maintained in the next federal budget, or will they be clawed back?  Here are some provisions worth watching:

The Age Credit.  First introduced as part of the 1987 Tax Reforms the Age Credit replaced the Age Exemption and it was intended to reduce the tax burden born by seniors who started to receive the Old Age Security and other pension benefits at the age of 65.  The 2009 Budget increased the Age Credit by $1000; but since then, Canada has experienced significant inflation.  Is it time for the Age Credit to be increased to help Canadian seniors with the cost of living?  It would be a simple but effective way for lower income Canadians to keep more of their OAS (high income earners usually have their Age Credit clawed away.

The Charitable Donation Credit.  This credit goes way back – first introduced “in 1917 to pay for the Patriotic and Red Cross Funds and other patriotic and war funds approved by the Minister” it was last changed in 2019 to add registered journalism organizations as a new category of tax exempt qualified donees, but then again in 2024 the new Alternative Minimum Tax will claw back the benefits of this credit for high income earners.  The government has had significant pushback on this plan.  Will it remove new taxes on donations from their original plan? According to Taxation Statistics, 1.3 million individuals claimed the Charitable Donations credit in 2020. But the cost of the donation credit has actually been declining from a high of 1.3 Billion in 2019 to a low of $950 Million projected for 2024.

Credit For Digital News Subscriptions.  This temporary credit, ending in 2025 brings a real dollar value of up to $75 for subscriptions valued at up to $500.  Will it be extended or increased?  The original intent was for eligible subscribers to access the content of a Qualified Canadian Journalism Organization in digital form that is primarily original written news and about 300,000 Canadians accessed the credit in 2020.  Will these journalism organizations be disqualified from charitable donation status when this credit disappears in 2025?  Time will tell. 

Still Waiting for News.  The Liberal Government, in their last election platform also promised a $1650 Career Extension Tax Credit, never implemented.  They also promised a 25% increase to the CPP survivor’s benefit.