(File Photo)

(File Photo)

Lower taxes, new RRSP rules among 2020 changes in Canada

$75 credit for digital news subscriptions and Alberta now has a federal carbon tax

Federal changes coming into effect Jan. 1 will lower taxes for most Canadians and affect retirees, recently separated individuals who want to use their retirement savings to buy a home, and digital news consumers.

The basic amount most Canadians can earn tax-free is going up on Jan. 1, resulting in slightly lower federal income taxes.

The increase in the basic personal amount was promised by the Liberals during the federal election campaign and is being phased in over four years until it reaches $15,000 in 2023.

For this year, the exemption amount will increase from $12,069 to $13,229. That will result in federal income tax savings of $113 in Quebec and $138 in the rest of Canada, according to the Canadian Taxpayers Federation.

The benefit will be lower for anyone earning more than $150,473 during the year and will be reduced to zero for Canadians with incomes above $214,368.

The tax cut will also be offset on individual paycheques by an increase in Canada Pension Plan premiums of up to $97, the CTF calculated. At the same time, employment insurance premiums will decrease, producing savings of about $20 for workers outside of Quebec, where the EI premium benefit will add up to $48 for some individuals.

Overall, residents of Ontario and Quebec earning less than $100,000 annually will see net savings of between $55 and $116, the federation estimated.

Also effective Jan. 1, Canadians experiencing a breakdown in their marriage or common-law partnership can qualify to withdraw money from their registered retirement savings plan, without incurring a tax penalty, to buy a home.

The Finance Department said individuals who make a withdrawal in the year a breakup occurs, or in the four preceding calendar years, can access the Home Buyers’ Plan, even if they are not a first-time home buyer.

It allows first-time home buyers to withdraw up to $35,000 from an RRSP to put toward a down payment without having to pay tax on the withdrawal.

KEEP READING: Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets, commission says

Among the other federal tax changes coming into effect:

— Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.

— Certain journalism organizations operating as not-for-profits will be allowed to register to receive donations from Canadians who can claim the amount for a charitable donation tax credit. Businesses donating money can also apply for tax savings.

— Two new types of annuities are being permitted under the tax rules for certain registered plans to provide Canadians with greater flexibility in managing their retirement savings.

— And, the federal carbon tax is being implemented in Alberta. The $20-per-tonne charge for carbon emissions will add to the cost of gas, diesel and heating fuels. Albertans had been paying a provincial carbon tax until it was abolished by the UCP government less than two months after the party won the Alberta election in the spring. Canadians in other provinces are already paying some form of carbon tax.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Shaelyn Sinnott of Oak Bay Volunteer Services delivers groceries for client Irene Kenny. The organization has kept up delivery of food and medication throughout all phases of the COVID-19 pandemic. (Courtesy Oak Bay Volunteer Services)
Oak Bay volunteers keep critical services running

Duo drove between Oak Bay and Jubilee three days a week, twice a day during pandemic

Two volunteers work to sieve a sample of sand and ocean water through a filter, capturing any potential microplastics. (Courtesy of Ocean Diagnostics)
Victoria startup making waves in microplastics research

New products from Ocean Diagnostics will make research faster, more affordable

Island Savings kick-starts the Equipped to Heal campaign with $120,000. (Courtesy Victoria Hospitals Foundation)
Latest Victoria Hospitals Foundation campaign targets $1M for mental health

Goal is to outfit new 19-bed unit at Eric Martin Pavilion

Willows Beach in Oak Bay. (Black Press Media file photo)
Seven days of sun set to shine on Greater Victoria

Special weather statement warns of higher than usual temperatures

Chef Trevor Randle leads a June 21 online cooking featuring recipes – beef zesty lettuce wraps, blueberry strudel and blueberry spritzer. (Courtesy We Heart Local BC)
Free online cooking course explores B.C. blueberries and beef

Chef Trevor Randle calls them the province’s most flavourful foods

Jesse Roper tackles weeds in his garden to kick off the 2021 season of What’s In My Garden Man? (YouTube/Whats In My Garden)
VIDEO: Metchosin singer-songwriter Jesse Roper invites gardeners into his plot

What’s In My Garden, Man? kicks off with the poop on compost

FILE – Most lanes remain closed at the Peace Arch border crossing into the U.S. from Canada, where the shared border has been closed for nonessential travel in an effort to prevent the spread of the coronavirus, Thursday, May 7, 2020, in Blaine, Wash. The restrictions at the border took effect March 21, while allowing trade and other travel deemed essential to continue. (AP Photo/Elaine Thompson)
Feds to issue update on border measures for fully vaccinated Canadians, permanent residents

Border with U.S. to remain closed to most until at least July 21

A portion of the George Road wildfire burns near Lytton, B.C. in this Friday, June 18, 2021 handout photo. THE CANADIAN PRESS/HO, BC Wildfire Service *MANDATORY CREDIT*
Blaze near Lytton spread across steep terrain, says BC Wildfire Service

Fire began Wednesday and is suspected to be human-caused, but remains under investigation

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

A Lotto 6/49 ticket purchased in Parksville for the June 19, 2021 draw is a $3M winner. (Submitted photo)
Winning Lotto 6/49 ticket worth $3M purchased on Vancouver Island

Lottery prize winners have 52 weeks to claim jackpot

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

Patrick O’Brien, a 75-year-old fisherman, went missing near Port Angeles Thursday evening. (Courtesy of U.S. Coast Guard)
Search for lost fisherman near Victoria suspended, U.S. Coast Guard says

The 75-year-old man was reported missing Thursday evening

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Most Read