New Refundable Education Credit

The Canada Training Credit was introduced in the federal budget this year.

Each year, taxpayers aged between 25-64, who have working type earnings between $10,000 and the top of the third tax bracket (in 2019 this is $147,667) will accumulate a $250 credit that they can use to pay for education costs.

The amount of the refundable credit will be the maximum of either the balance that the taxpayer has in their accumulation account, or one half of the eligible cost of the program. Eligible costs will be similar to what currently qualifies for the tuition credit. The tuition credit will be reduced by the amount of the refundable credit.

The maximum that the taxpayer can claim over their lifetime is $5,000. Once a taxpayer has reached the age of 65, their accumulation account will be dissolved.

The annual accumulation will begin in 2019, and 2020 will be the first year that a taxpayer will be eligible to claim this new credit on their income tax return.

Employment Standards Updated

Changes have been introduced to Employment Standards in British Columbia. These regulations establish minimum standards that must be followed in the workplace.

One of the most notable changes is related to the employment of youth. The minimum age of employment has been raised from 12 years to 16 years.

If a child is under the age of 14, they can only work if permission is received from the Director of Employment Standards. If a child is 14 or 15, they can only work with a parent or guardian’s consent, and they can only perform “light work”. The term “light work” has not yet been defined in the regulations.

There has also been two new types of unpaid leave introduced.

Employees will now be able to take leave of up to 36 weeks a year to care for an ill or injured family member under the age of 19, and up to 16 weeks for those over 18.

In addition, victims of domestic or sexual violence can take up to 10 non-consecutive days off to deal with issues related to their abuse. They can be entitled to an additional 15 weeks of leave to deal with the consequences of that violence.

Another notable change is that employees can recover unpaid wages from the last 12 months. Previously they were limited to the last 6 months. This could even be expanded to 24 months in serious cases.

Several other small changes were also enacted. There are expected to be several other amendments to Employment Standards in the coming years.

Increases to Climate Action Tax Credits

Gradual increases are planned for the provincial Climate Action Tax Credit for eligible taxpayers.

In July of this year, the maximum amount of the annual credit was increased to $155 per adult from $135. This will increase to $174 per adult in July 2020, and $194 per adult in July 2021.

The annual credit per child increased to $46 from $40 on July 1, and will increase to $51 per child in July 2020, and $57 per child in July 2021.

These credits are primarily targeted at helping low income families. Most of these families will receive dill credit if their qualifying income is less that $40,689.

Amortization (CCA) Rates Increased

The federal government has introduced accelerated rates of amortization on capital asset purchases, otherwise known as Capital Cost Allowance (CCA). These will allow businesses to write off their eligible asset purchases faster than in previous years.

The write off will be increased by one half of the original rate on ordinary asset purchases, if the asset purchased will be available for use prior to 2024.

In addition, businesses were previously allowed a write off of only one half of the applicable rate in the year of purchase. These new rules exclude the application of this “half year” rule on eligible purchases.

The half year rule will not apply on any of these asset purchases if the asset is available for use by the business prior to 2028.

If an asset purchase is considered to be a piece of manufacturing or processing equipment, the total write off on the asset will be up to 100% of the net cost of the asset in the year of purchase, if the equipment will be used prior to 2024.

If the equipment becomes available for use in 2024 or 2025, 75% of the purchase can be written off in the year of purchase, and if it is not available for use until 2026 or 2027, 55% can be written off in the first year.

Similar accelerated rates of amortization are available for purchases of clean energy equipment.

Zero emission vehicles will also qualify for special amortization status. These vehicles can be fully written off in the first year if they are available for use prior to 2024.

There is a cap of $55,000 on the amount of the write off if the vehicle is considered to be a passenger vehicle.

If the vehicle qualifies for federal incentives on the purchase of zero emission vehicles, it will not qualify for these special amortization rates. Rather, the vehicle would be written off the same as any other vehicle purchases.

Credit for Digital Subscriptions

A new non-refundable federal tax credit has been introduced for individuals who purchase digital news subscriptions.

The maximum amount of the credit is $500 per year. It is limited to the cost of the standalone digital subscription if the individual purchases a combined digital and newsprint subscription.

To qualify for the credit the amount must be paid after 2019 and prior to 2025. An eligible subscription must be purchased from a qualified Canadian journalism organization that is primarily engaged in the production of written content. If the subscription is with a broadcasting entity, it will not qualify for the credit.