TORONTO, Sept. 12, 2011 /CNW/ - Every year in Canada it hurts to hand
over a percentage of our earnings to the taxman. The amount of tax will
vary depending on which province you live in or where your corporation
does business. The federal government and the provinces provide an
array of incentives or credits to spur investment and spending.
"While there were no sweeping tax changes in budget pronouncements this
year, some perceived loopholes have been tightened and inequities have
been eliminated. The good news for taxpayers is that we've escaped
relatively unscathed this year. The federal government and some
provinces are reducing corporate tax rates and have introduced various
family-friendly credits," says Christopher Kong, National Tax Leader
Below PwC outlines some of the tax reductions and incentives that are
offered. The information is from its annual Tax Facts and Figures
publication; a reference tool for understanding personal and corporate
tax rates and changes across Canada.
If you earn $70,000 in ordinary income (e.g., salary or interest) in
2011, you will have the lowest tax bite if you reside in British
Columbia where your combined federal and provincial tax will be below
$14,788. Ontario is the second lowest province at $15,373, while
Alberta is third at $16,215.
British Columbia is among seven provinces that are reducing corporate
tax rates: its general and manufacturing and processing rate declined
from 10.5% to 10% on January 1, 2011; and its small business rate will
be reduced from 2.5% to 0% on April 1, 2012. Provincial incentives
include a refundable 17.5% tax credit for digital animation or visual
effects tax, a refundable 17.5% interactive digital media tax credit
and a 35% (or higher) Film Incentive BC tax credit.
Alberta has the lowest probate fees of all the provinces (excluding
Quebec, which does not levy probate fees). Its fees are $400,
regardless of the value of the estate. For estates valued at $500,000,
Prince Edward Island's and New Brunswick's probate fees are $2,000 and
$2,500 respectively; the provincial average across Canada is over
If you earn $150,000 in ordinary income (e.g. salary or interest) in
2011, you will pay the lowest income taxes if you live in Alberta; your
combined federal and provincial tax bite will be $45,128. For December
31, 2011 year ends, Alberta's combined general corporate tax rate is
the lowest among the provinces; it is 26.5%, down from 28% in 2010.
Alberta also has a Multimedia Development Fund that permits 20 to 29%
of Alberta production costs to be recovered as a non-recoupable grant.
Announced in November of 2010, Ontario offers a refundable Children's
Activity Tax Credit. Of interest to corporations, Ontario has extended
and enhanced its book publishing tax credit and offers generous tax
incentives for research and development. Ontario corporations will also
benefit from scheduled corporate tax reductions; Ontario's generate
corporate tax rate is decreasing in stages from 14% before July 1,
2010, to 10% by July 1, 2013.
The province provides a tax "holiday" for businesses that commercialize
intellectual property developed by Canadian universities, colleges or
research institutions. Its tax incentives for the entertainment and
media industry include a 20% computer animation and special effects tax
credit, a 40% interactive digital media tax credit, a 35% (or more)
film and television tax credit and a 25% production services tax
Quebec is in line with the Canadian average for general corporate income
taxes with a combined federal provincial rate of 28.4% for December 31
2011 year ends. British Columbia and Alberta have the lowest general
rates at 26.5%, while Nova Scotia's is the highest at 32.5%.
Starting 2012, a new tax credit for experienced workers will eliminate
or reduce the income tax paid by individuals 65 or over on eligible
work income. The province has enhanced its refundable tax credits for
book publishing and for sound recording and has introduced a refundable
credit for the production of cellulosic ethanol. Quebec offers a tax
credit for film and television productions (maximum 65%), film and
television dubbing (35%) and a 25% Production Services Tax Credit.
Incentives are also available for producing multimedia titles (varies)
and computer animation and special effects.
If you want to purchase a new home, New Brunswick land transfer tax
rates are the lowest in the eastern Canadian provinces; you'll pay only
$1,075 for a $400,000 home. This compares to $1,698 in Newfoundland and
The province is phasing out its film tax credit but intends to replace
it with a digital media tax credit. For December 31, 2011, New
Brunswick's combined federal-provincial income tax rate of 27% is among
the lowest in Canada. This rate will decrease to 25% by 2012. The small
business rate will be reduced in stages from 5% to 2.5 % over the next
four years. Similar to two other Atlantic Provinces, New Brunswick
offers a fully refundable 15% research and development tax credit to
corporations that incur qualified SR&ED expenditures in the province.
PwC firms provide industry-focused assurance, tax and advisory services
to enhance value for their clients. More than 161,000 people in 154
countries in firms across the PwC network share their thinking,
experience and solutions to develop fresh perspectives and practical
advice. See www.pwc.com for more information. In Canada,
PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,700 partners and staff in
offices across the country.
"PwC" is the brand under which member firms of PricewaterhouseCoopers
International Limited (PwCIL) operate and provide services. Together,
these firms form the PwC network. Each firm in the network is a
separate legal entity and does not act as agent of PwCIL or any other
member firm. PwCIL does not provide any services to clients. PwCIL is
not responsible or liable for the acts or omissions of any of its
member firms nor can it control the exercise of their professional
judgment or bind them in any way.
"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability
partnership, which is a member firm of PricewaterhouseCoopers
International Limited, each member firm of which is a separate legal
For further information:
There are regional tax specialists available to speak to specific provincial tax laws and regulations. Please try one of our regional communications personnel to connect:
Kiran Chauhan - Ontario/National, 416 947 8983
David Rowney - Atlantic, 416 365 8858
Olivia Boucherie - Quebec, 514 205 5335
Melissa Homenuik - Alberta, 403 509 7590
Jim Nelson - British Columbia, 604 806 7047
Follow PwC on Twitter @PwC_Canada_LLP and on Facebook at http://www.facebook.com/pwccanada.