C-80
First Session, Thirty-eighth Parliament,
53-54 Elizabeth II, 2004-2005
HOUSE OF COMMONS OF CANADA
BILL C-80
An Act to implement certain income tax reductions
first reading, November 23, 2005
THE MINISTER OF FINANCE
90359
SUMMARY
This enactment
(a) provides an increase of $500 to the basic personal amount — the amount of income that Canadians can earn without paying federal income tax — effective January 1, 2005, and makes consequential amendments to other personal amounts accelerating the increases to the personal amounts implemented pursuant to the 2005 federal budget; and
(b) reduces the lowest 16% federal income tax rate to 15%, effective January 1, 2005.
Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
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1st Session, 38th Parliament,
53-54 Elizabeth II, 2004-2005
house of commons of canada
BILL C-80
An Act to implement certain income tax reductions
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. 1 (5th Supp.)
INCOME TAX ACT
1. (1) Subsection 117(2) of the Income Tax Act is replaced by the following:
Rates for years after 2004
(2) The tax payable under this Part by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, (in this subdivision referred to as the “amount taxable”) for a taxation year is
(a) 15% of the amount taxable, if the amount taxable does not exceed $35,595;
(b) $5,339 plus 22% of the amount by which the amount taxable exceeds $35,595, if the amount taxable exceeds $35,595 and does not exceed $71,190;
(c) $13,170 plus 26% of the amount by which the amount taxable exceeds $71,190, if the amount taxable exceeds $71,190 and does not exceed $115,739; and
(d) $24,753 plus 29% of the amount by which the amount taxable exceeds $115,739, if the amount taxable exceeds $115,739.
(2) Subsection (1) applies to the 2005 and subsequent taxation years.
2. (1) Subsections 118(3.1) to (3.3) of the Act are replaced by the following:
Additions to personal credits — basic personal amount
(3.1) The amount of $7,131 referred to in paragraphs (a) to (c) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2005 taxation year, to be replaced by the amount that is the total of $500 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2006 taxation year, to be replaced by the amount that is the total of $200 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);
(c) for the 2007 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b);
(d) for the 2008 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c);
(e) for the 2009 taxation year, to be replaced by the amount that is the greater of
(i) the amount that is the total of $300 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and
(ii) $10,000; and
(f) for the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (e).
Additions to personal credits — spouse or common-law partner or wholly dependent person
(3.2) The amount of $6,055 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2005 taxation year, to be replaced by the amount that is the total of $425 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2006 taxation year, to be replaced by the amount that is the total of $170 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);
(c) for the 2007 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b);
(d) for the 2008 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c);
(e) for the 2009 taxation year, to be replaced by the amount that is the greater of
(i) the amount that is the total of $255 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and
(ii) $8,500; and
(f) for the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (e).
Additions to personal credits — net income threshold
(3.3) The amount of $606 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2005 taxation year, to be replaced by the amount that is the total of $42.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2006 taxation year, to be replaced by the amount that is the total of $17 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);
(c) for the 2007 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b);
(d) for the 2008 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c);
(e) for the 2009 taxation year, to be replaced by the amount that is the greater of
(i) the amount that is the total of $25.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and
(ii) $850; and
(f) for the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (e).
(2) Section 118 of the Act is amended by adding the following after subsection (8):
Rounding
(9) If an amount determined under any of paragraphs (3.1)(a) to (f), (3.2)(a) to (f) and (3.3)(a) to (f) is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from two such consecutive multiples, to the greater multiple.
(3) Subsections (1) and (2) apply to the 2005 and subsequent taxation years.
COORDINATING AMENDMENTS
Bill C-67
3. (1) If Bill C-67, introduced in the 1st session of the 38th Parliament and entitled the Unanticipated Surpluses Act (the “other Act”), receives royal assent, then the provisions mentioned in subsections (2) and (3) are amended as provided in those subsections.
(2) On the day on which subsection 6(1) of the other Act begins to apply, subsections 118(3.1) to (3.3) of the Income Tax Act are replaced by the following:
Additions to personal credits — basic personal amount
(3.1) The amount of $7,131 referred to in paragraphs (a) to (c) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2005 taxation year, to be replaced by the amount that is the total of $500 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2006 taxation year, to be replaced by the amount that is the total of $200 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);
(c) for the 2007 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b),
(ii) $100, and
(iii) the basic personal amount surplus adjustment determined for that taxation year;
(d) for the 2008 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c),
(ii) $100, and
(iii) the basic personal amount surplus adjustment determined for that taxation year;
(e) for the 2009 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d),
(ii) the greater of $300 and the amount, if any, by which $10,000 exceeds the amount determined under subparagraph (i), and
(iii) the basic personal amount surplus adjustment determined for that taxation year;
(f) for the 2010 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (e), and
(ii) the basic personal amount surplus adjustment determined for that taxation year; and
(g) for each of the 2011 and subsequent taxation years, to be replaced by the amount determined for that description for that taxation year in respect of the particular amount by applying section 117.1 to the amount determined for that description for the immediately preceding taxation year in respect of the particular amount.
Additions to personal credits — spouse or common-law partner or wholly dependent person
(3.2) The amount of $6,055 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2005 taxation year, to be replaced by the amount that is the total of $425 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2006 taxation year, to be replaced by the amount that is the total of $170 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);
(c) for the 2007 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b),
(ii) $85, and
(iii) 85% of the basic personal amount surplus adjustment determined for that taxation year;
(d) for the 2008 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c),
(ii) $85, and
(iii) 85% of the basic personal amount surplus adjustment determined for that taxation year;
(e) for the 2009 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d),
(ii) the greater of $255 and the amount, if any, by which $8,500 exceeds the amount determined under subparagraph (i), and
(iii) 85% of the basic personal amount surplus adjustment determined for that taxation year;
(f) for the 2010 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (e), and
(ii) 85% of the basic personal amount surplus adjustment determined for that taxation year; and
(g) for each of the 2011 and subsequent taxation years, to be replaced by the amount determined for that description for that taxation year in respect of the particular amount by applying section 117.1 to the amount determined for that description for the immediately preceding taxation year in respect of the particular amount.
Additions to personal credits — net income threshold
(3.3) The amount of $606 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is
(a) for the 2005 taxation year, to be replaced by the amount that is the total of $42.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);
(b) for the 2006 taxation year, to be replaced by the amount that is the total of $17 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);
(c) for the 2007 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (b),
(ii) $8.50, and
(iii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year;
(d) for the 2008 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c),
(ii) $8.50, and
(iii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year;
(e) for the 2009 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d),
(ii) the greater of $25.50 and the amount, if any, by which $850 exceeds the amount determined under subparagraph (i), and
(iii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year;
(f) for the 2010 taxation year, to be replaced by the amount that is the total of
(i) the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (e), and
(ii) 8.5% of the basic personal amount surplus adjustment determined for that taxation year; and
(g) for each of the 2011 and subsequent taxation years, to be replaced by the amount determined for that description for that taxation year in respect of the particular amount by applying section 117.1 to the amount determined for that description for the immediately preceding taxation year in respect of the particular amount.
(3) On the day on which subsection 6(2) of the other Act begins to apply, subsections 118(9) and (10) of the Income Tax Act are replaced by the following:
Rounding
(9) If an amount determined under any of paragraphs (3.1)(a) to (f), (3.2)(a) to (f) and (3.3)(a) to (f) is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from two such consecutive multiples, to the greater multiple.
Definition of “basic personal amount surplus adjustment”
(10) For the purposes of subsections (3.1) to (3.3), “basic personal amount surplus adjustment” for a particular taxation year means the amount, if any, specified by the Minister of Finance for the particular taxation year, not exceeding the amount determined by dividing 85% of the surplus adjustment, as defined in subsection 122.52(1), for the preceding taxation year by the appropriate percentage for the particular taxation year.
Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada