- Canadian Tax Resource Blog - http://blog.taxresource.ca -

The 2011 Federal Budget Highlights

The 2011 Federal budget does not contain any major changes.

There are a few minor tax credit available, enhancements to GIS, and some tax loopholes have been closed. The most significant changes is the $600 per year enhancement to GIS for single seniors and $840 for couples.

Following these highlights are links to budget information and analysis from financial professional throughout Canada.

Guaranteed Income Supplement

The federal government has proposed to enhance the Guaranteed income Supplement (GIS) for low income seniors by providing a top-up of $600 per year for single seniors and $840 for couples.

Doctors For Rural Communities

Attracting health care professionals to rural areas is an important factor. The government wants to encourage doctors to settle in rural areas by forgiving up to $40,000 of the federal portion of Canada Student Loans.

Students & Learning

The eligibility for Canada Student Loans and the Grant Program for full and part-time students has been expanded.

For regulated professionals and skilled trades the tuition tax credit has been extended to their examination fees.

New Tax Credits

The government has introduced three new tax credits:

EcoENERGY Retrofit

The ecoENERGY retrofit program has been extended to allow Canadians to make homes more energy efficient.

Closing Tax Loopholes

The federal government has enhanced the RRSP anti-avoidance rules to align them with those introduced last year concerning the TFSA.

RRSP Advantage rules – The annuitant of an RRSP will be subject a special tax on certain swap (swapping from RRSP and on-registered accounts) transaction that take advantage of differences in share prices.

Prohibited investments – There will be a punitive, 50% of the fair market value of the prohibited investment held in an RRSP.

IPP Rules – Plan members will now be required to take withdrawals at age 72 to align with the RRSP conversion rules. In addition, past service contributions must now come from the plan members RRSP and RRSP contribution room to eliminate any large IPP contributions for past service.

Charitable Donations & Flow Through Shares – The proposed rules will limit the amount of the capital gain that would not be subject to a capital gain to the excess of the value of the shares at the time they are donated over the cost of the shares.

Other Budget Resources