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Most retired Canadians receive income from two government-sponsored retirement income programs – the Canada Pension Plan (CPP) and the Old Age Security (OAS) program. While benefits from both are paid to recipients by the federal government on a monthly basis, there are significant differences in how the two plans are funded, the amounts which can be received, and, most significantly for retirees, in how entitlement to benefits is determined each year.


This year, the Canada Revenue Agency (CRA) will receive and process more than 30 million individual income tax returns for the 2023 tax year. No two of those returns will be identical, as each such return will have its own particular combination of amounts and sources of income reported, and deductions and credits claimed. There is, however, one thing which every one of those returns has in common: for each and every one, the CRA will review the return filed, determine whether it is in agreement with the information contained therein, and, finally, issue a Notice of Assessment (NOA) to the taxpayer summarizing the Agency’s conclusions with respect to the taxpayer’s tax situation for the 2023 tax year.


For the majority of Canadians, the due date for filing of an individual tax return for the 2023 tax year was Tuesday April 30, 2024. (Self-employed Canadians and their spouses have until Monday June 17, 2024 to get that return filed.) When things go entirely as planned and hoped, the taxpayer will have prepared a return that is complete and correct, and filed it on time, and the Canada Revenue Agency (CRA) will issue a Notice of Assessment indicating that the return is “assessed as filed”, meaning that the CRA agrees with the information filed and the amount of tax payable determined by the taxpayer. While that’s the outcome everyone is hoping for, it’s a result which can be derailed in any number of ways.


As everyone knows, buying one’s first home – achieving that elusive first step on to the “property ladder” – has always presented a challenge, and that challenge has rarely been greater than it is now. The two unavoidable hurdles which must be cleared by first time home buyers are putting together sufficient funds for a down payment, and qualifying for mortgage financing under mortgage lending requirements which have become increasingly stringent in recent years. Soaring house prices and mortgage interest rates which have steadily increased over the past two years combine to make it difficult to clear either or both of those hurdles.


Most Canadians rarely have reason to interact with the tax authorities, and for most people, that’s the way they like it. In the vast majority of cases, Canadians file their tax returns each spring, receive their refund or pay any balance of taxes owing, and forget about taxes until filing season rolls around the following year.


Most taxpayers sit down to do their annual tax return, or wait to hear from their tax return preparer, with some degree of trepidation. In most cases taxpayers don’t know, until their return is completed, what the “bottom line” will be, and it’s usually a case of hoping for the best and fearing the worst.


Our tax system is, for the most part, a mystery to individual Canadians. The rules surrounding income tax are complicated and it can seem that for each and every rule there is an equal number of exceptions or qualifications. There is, however, one rule which applies to every individual taxpayer in Canada, regardless of location, income, or circumstances, and of which most Canadians are aware. That rule is that income tax owed for a year must be paid, in full, on or before April 30 of the following year. This year, that means that individual income taxes owed for 2023 must be remitted to the Canada Revenue Agency (CRA) on or before Tuesday April 30, 2024. No exceptions and, absent extraordinary circumstances, no extensions.


No one likes paying taxes, but for taxpayers who live on a fixed income having to pay a a large tax bill can mean real financial hardship – and the majority of Canadians who live on fixed incomes are, of course, those who are over 65 and retired. Adding to their financial stress is the reality that such individuals have been coping, for the past two years, with inflationary increases in the cost of just about all goods and services, especially food and shelter.


For the past two years, Canadians have had to continually adjust their household budgets to accommodate price increases for nearly all goods and services. The impact of rising prices is felt most by those who are living on a fixed income and who, of necessity, spend a larger than average share of their income on non-discretionary expenditures like housing and food. And, while such individuals and families can be found in all age groups, retirees make up the largest Canadian demographic who live on such fixed incomes.


Most Canadians don’t turn their attention to their taxes until sometime around the end of March or the beginning of April, in time to complete the return for 2023 ahead of the April 30, 2024 filing deadline.


While owning one’s own home brings with it many intangible benefits, home ownership also provides some very significant financial advantages. Specifically, it provides the opportunity to accumulate wealth through increases in home equity, and to realize that wealth on a truly tax-free basis.


While our tax laws require Canadian residents to complete and file a T1 tax return form each spring, that return form is never exactly the same from year to year. Some of the changes found in each year’s T1 are the result of the indexing of many aspects of our tax system, as income brackets and tax credit amounts are increased to reflect the rate of inflation during the previous year. Other changes, however, arise from the introduction by the federal government of new deductions or credits, changes to the existing rules which govern the availability, amount, or delivery of such deductions or credits, and, inevitably, the end of some tax credit programs.


Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.


Each year, the Canada Revenue Agency publishes a statistical summary of the tax filing patterns of Canadians during the previous filing season. The final statistics for 2023 show that the vast majority of Canadian individual income tax returns – just over 92%, or just under 30 million returns – were filed by electronic means, using one or the other of the CRA’s web-based filing methods. About 2.5 million returns – or just under 8% – were paper-filed.


Income tax is a big-ticket item for most retired Canadians. Especially for those who are no longer paying a mortgage, the annual tax bill may be the single biggest expenditure they are required to make each year. Fortunately, the Canadian tax system provides a number of tax deductions and credits available only to those over the age of 65 (like the age credit) or only to those receiving the kinds of income usually received by retirees (like the pension income credit), in order to help minimize that tax burden. And in most cases, the availability of those credits is flagged, either on the income tax form which must be completed each spring or on the accompanying income tax guide.


If there is one invariable “rule” of financial and retirement planning of which most Canadians are aware, it is the unquestioned wisdom of making regular contributions to one’s registered retirement savings plan (RRSP). And it is true that for several decades the RRSP was the only tax-sheltered savings and investment vehicle available to most individual Canadians.


Sometime during the month of February, millions of Canadians will receive some unexpected mail from the Canada Revenue Agency (CRA). That mail, entitled simply “Instalment Reminder”, will set out the amount of instalment payments of income tax to be paid by the recipient taxpayer by March 15 and June 15 of this year.


The Employment Insurance (EI) premium rate for 2024 is set at 1.66%.


Changes made to the Québec Pension Plan (QPP) beginning in the 2024 calendar year will create a two-tier contribution structure.


Changes made to the Canada Pension Plan (CPP) beginning in the 2024 calendar year will create a two-tier contribution structure.


Dollar amounts on which individual non-refundable federal tax credits for 2024 are based, and the actual tax credit claimable, will be as follows:


The indexing factor for federal tax credits and brackets for 2024 is 4.7%. The following federal tax rates and brackets will be in effect for individuals for the 2024 tax year.


Each new tax year brings with it a schedule of tax payment and filing deadlines, as well as some changes with respect to tax saving and planning opportunities. Some of the more significant dates and changes for individual taxpayers for 2024 are listed below.


While most taxpayers pay their annual income tax bill in full and by the tax payment deadline of April 30, there are many circumstances that could result in an individual’s being unable to meet their tax payment obligations in full or on time. Individuals who earn income from employment pay their taxes through deductions from their paycheques, but can still be faced with a tax balance owing when the annual return is filed. Newly retired Canadians who are receiving income from a variety of sources may not realize that sufficient tax is not being withheld from all of those sources to cover the tax bill for the year. And, in a time when many Canadians and their families are living paycheque to paycheque, most taxpayers are unlikely to have additional funds readily available to pay a large, unexpected tax bill.


While almost everyone looks forward to retirement and an end to the day-to-day demands of working life, there’s also no question but that the decision to give up a regular paycheque is a stressful one. Particularly when the cost of life’s necessities – groceries, rent, mortgage interest payments – seems to be continually increasing, individuals wanting to retire have to wonder whether they can actually afford to do so, or whether it would be foolhardy, in the current economic realities, to walk away from a reliable, regular paycheque.


During the month of December, it’s customary for employers to provide something “extra” for their employees, whether it’s a compensation bonus, a gift, or an employer-sponsored social event – or all three. And, given the current labour shortages in many sectors, employers may be particularly motivated this year to provide such extras in order to retain current employees, or attract new ones. What employers definitely aren’t trying to do is create a tax headache or liability for their employees: unfortunately, it’s also the case that a failure to properly structure employee gifts or even employee social events can result in unintended and unwelcome tax consequences to those employees.


Everyone in Canada who earns a salary or wages is familiar with the deduction taken from each paycheque for contributions to the Canada Pension Plan (CPP). The CPP is one of the two major government-sponsored retirement income programs in Canada – the other being the Old Age Security program.


Two quarterly newsletters have been added – one dealing with personal issues, and one dealing with corporate issues.


When the pandemic struck in March of 2020 and public health lockdowns were imposed, virtually all Canadian employees were required to work from home, most for the first time.


The day-to-day financial impact of increases in interest rates over the past 18 months, together with higher costs for nearly all goods and services, means that for most Canadians maximizing take-home income isn’t just desirable, it’s a necessity. And the best way to make sure that take-home pay is maximized is to ensure that deductions taken from that paycheque – especially deductions for income tax – are no greater than required.


Canadians have a well-deserved reputation for supporting charitable causes, through donations of both money and goods. Our tax system supports that generosity by providing a tax credit for qualifying donations made and, in all cases, in order to claim a credit for a donation in a particular tax year, that donation must be made by the end of that calendar year.


The 10-fold increase in interest rates since March of 2022 has affected Canadians in almost every area of their financial lives, as individuals and families struggle to cope with the every-increasing bite that interest costs take out of their budgets.


While our health care system is currently struggling with a number of significant problems, Canadians are nonetheless fortunate to have a publicly funded health care system, in which most major medical expenses are covered by government health care plans. Notwithstanding, there is a large (and growing) number of medical and para-medical costs – including dental care, prescription drugs, physiotherapy, ambulance trips, and many others – which must be paid for on an out-of-pocket basis by the individual. In some cases, such costs are covered by private insurance, usually provided by an employer, but not everyone benefits from private health care coverage. Self-employed individuals, those working on contract, or those whose income comes from several part-time jobs do not usually have access to such private insurance coverage. Fortunately for those individuals, our tax system acts to help cushion the blow by providing a medical expense tax credit to help offset out-of-pocket medical and para-medical costs which must be incurred.


One or two generations ago, retirement was an event. Typically, an individual would leave the work force completely at age 65 and begin collecting Canada Pension Plan (CPP) and Old Age Security (OAS) benefits along with, in many cases, a pension from an employer-sponsored registered pension plan.


Most Canadians know that the deadline for making contributions to one’s registered retirement savings plan (RRSP) comes 60 days after the end of the calendar year, around the end of February. There are, however, some circumstances in which an RRSP contribution must be (or should be) made by December 31 in order to achieve the desired tax result.


During the pandemic, temporary financial assistance was provided to Canadian small businesses through a number of grant and loan programs initiated by the federal government. One of the largest of those programs was the Canada Emergency Business Account (CEBA) program, which ran from April 2020 to June 2021, and provided a total of approximately $50 billion in loan financing to just under a million small businesses.


By anyone’s measure, obtaining a post-secondary education is an expensive undertaking. Tuition and other school-related costs are just the start of the bills which must be paid. Whether the student obtains a place in a university residence or finds a place to live off campus, students (and their parents) must also budget for the cost of residence and meal plan fees, or rent and groceries. The total cost of a single year of university or college attendance away from home can easily reach $30,000 – and can significantly exceed that amount where the student is enrolled in a specialized academic program leading to a professional designation.


The Old Age Security (OAS) program is the only aspect of Canada’s retirement income system which does not require a direct contribution from recipients of program benefits. Rather, the OAS program is funded through general tax revenues, and eligibility to receive OAS is based solely on Canadian residency. Anyone who is 65 years of age or older and has lived in Canada for at least 40 years after the age of 18 is eligible to receive the maximum benefit. For the third quarter of 2023 (July to September), that maximum monthly benefit for recipients under the age of 75 is $698.60, while benefit recipients aged 75 and older can receive up to $768.46 per month. The monthly benefit for all recipients will increase by 1.3% during the fourth quarter (October to December) of 2023.


When the pandemic began in the spring of 2020, it wasn’t long before it became apparent that the increasing threat was to both public health and to the economy. In response to the economic threat, the federal government launched a wide range of support programs for both individuals and businesses. Some of those programs were structured as outright grants to replace income lost when workplaces and businesses shut down, while others were structured as loans, to be repaid when the pandemic ended and the economic fortunes of recipients had (hopefully) improved.


The Canadian tax system is a “self-assessing system” which relies heavily on the voluntary co-operation of taxpayers. Canadians are expected (in fact, in most cases, required) to complete and file a tax return each spring, reporting income from all sources, calculating the amount of tax owed, and remitting that amount to the federal government on or before April 30. And while it’s doubtful that anyone does so with any great degree of enthusiasm, each spring tens of millions of Canadians do sit down to complete that return (or, more often, they pay someone else to do it for them).


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


While the way in which post-secondary learning is delivered may have changed and changed again over the past three and a half years, as the pandemic waxed and waned and finally ended, the financial realities of post-secondary education have not. Regardless of how post-secondary learning is structured and delivered, it is expensive. There will be tuition bills, of course, but also the need to find housing and pay rent in what is, in most college or university locations, a very tight and very expensive rental market. Those who choose to live in residence and are able to secure a place will also face bills for accommodation and, usually, a meal plan.


The scarcity of affordable housing in just about every Canadian community can’t be news to anyone anymore. Whether it’s in relation to rental housing or the purchase of a first home, the opportunity to secure affordable, long-term housing has become more and more elusive, especially for younger Canadians.


By mid to late summer, almost every Canadian has filed his or her income tax return for the previous year and has received the Notice of Assessment issued by the Canada Revenue Agency (CRA) with respect to that tax filing. Most taxpayers, therefore, would consider that their annual filing and payment obligations are done and behind them for another year.


Between 2009 and early 2022, Canadians lived (and borrowed) in an ultra-low interest rate environment. Between January 2009 and March 2022, the bank rate (from which commercial interest rates are determined) was (except, briefly, in the fall of 2018) never higher than 1.50% – and was almost always lower than that. Effectively, adult Canadians who are now under the age of 35 have had no experience of managing their finances in high – or even, by historical standards, ordinary – interest rate environments.


The age at which Canadians retire and begin deriving income from government and private pensions and private retirement savings has become something of a moving target. At one time, reaching one’s 65th birthday marked the transition from working life to full retirement, and, usually, receipt of a monthly employee pension, along with government-sponsored retirement benefits. That is no longer the unvarying reality. The age at which Canadians retire can now span a decade or more, and retirement is more likely to be a gradual transition than a single event.


By the time summer arrives, nearly all Canadians have filed their income tax returns for the previous year, have received a Notice of Assessment from the tax authorities with respect to that return and have either spent their tax refund or, more grudgingly, paid any balance of tax owing.


At a time when Canadian households are coping simultaneously with ongoing inflation, especially food inflation, as well as interest rates which are at their highest point in decades, every dollar of income counts. And where that income can be obtained with minimal effort, and received tax-free, then it’s a win-win for the recipient.


With the worst days of the pandemic behind us, more and more Canadian families have returned to their usual schedule, with kids back in attendance at school and parents back at work at the office, on either a full-time or a part-time basis. While a return to the normal routine is likely welcome, the need to go to the office for at least part of the week means that parents must make arrangements for summer child care.


Two quarterly newsletters have been added—one dealing with personal issues, and one dealing with corporate issues.


The purchase of a first home is a milestone in anyone’s life, for many reasons. A home purchase is likely the largest single financial transaction most Canadians will enter into in their lives, and having the ability to buy one’s own home has traditionally been perceived as a marker of financial success and stability.


Many, if not most, taxpayers think of tax planning as a year-end exercise to be carried out in the last few weeks of the year, with a view to taking the steps needed to minimize the tax bill for the current year. And it’s true that almost all strategies needed to both minimize the tax hit for the year and to ensure that there won’t be a big tax bill come next April must be taken by December 31 of the current calendar year (the making of registered retirement savings plan (RRSP) contributions being the notable exception). Nonetheless, there’s a lot to recommend carrying out a mid-year review of one’s tax situation for the current year. Doing that review mid-year, instead of waiting until December, gives the taxpayer the chance to make sure that everything is on track and to put into place any adjustments needed to help ensure that there are no tax surprises when the income tax return for 2023 is filed next spring. As well, while the deadline for implementing most tax saving strategies may be December 31, the window of opportunity to make a significant difference to one’s current-year tax situation does narrow as the calendar year progresses.


Canada’s retirement income system is made up of two public retirement income programs – the Old Age Security program and the Canada Pension Plan – as well as the opportunity to accumulate private retirement savings on a tax-assisted basis, through registered pension plans or registered retirement savings plans.


Sales of residential real estate across Canada are, after a slowdown in 2022, once again on the rise. Back-to-back increases in sales figures during February and March 2023 were followed by a double digit increase in such sales during the month of April. Those figures mean that tens of thousands of Canadians will be closing home sales transactions and moving this spring and summer. And, whatever the reason for the move or the distance to the new location, all moves have two things in common – stress and cost. Even where the move is a desired one – from an apartment to a first home, or moving to take one’s dream job, any move inevitably means upheaval of one’s life, and the costs (especially for a long-distance move) can be very significant. There is not much that can diminish the stress of moving, but the associated costs can be offset somewhat by a tax deduction which may be claimed for many of those costs.


Of the 17 million individual income tax returns for the 2022 tax year filed with the Canada Revenue Agency (CRA) by the middle of April 2023, no two were identical. Each return contained its own particular combination of types and amounts of income reported and deductions and credits claimed. There is, however, one thing which every one of those returns has in common: For each and every one, the CRA will review the return filed, determine whether it is in agreement with the information contained therein, and, finally, issue a Notice of Assessment (NOA) to the taxpayer summarizing the Agency’s conclusions with respect to the taxpayer’s tax situation for the 2022 tax year.


The fact that Canadian households and families have been living with a significant amount of financial stress for the past year or so isn’t really news. Eight interest rate hikes in the past 14 months, together with double digit inflationary increases in the price of food and energy, have combined to squeeze family finances from all directions.