In mid-January, the Canada Revenue Agency (CRA) announced the inflation-adjusted tax brackets, and other deduction amounts for 2017. The amounts have been adjusted at a 1.4% inflation rate which is derived from the average monthly Consumer Price Index (CPI) data provided by Statistics Canada.
As we look back to 2016 when filing returns, AGT tax professionals recommends that taxpayers should consider going through these tax rates and other Canadian tax changes to prepare for their taxes and take the necessary tax planning measures to reduce their tax burden in 2017.
Canada Federal & Provincial Tax Rates, Income Brackets & Basic Personal Amount for 2017
2017 Federal Tax Brackets
| Taxable Income Bracket (CAD) | Federal Tax Rate |
|---|---|
| $0 – $45,916 | 15% |
| $45,916 – $91,831 | 20.5% |
| $91,831 – $142,353 | 26% |
| $142,353 – $202,800 | 29% |
| Above $202,800 | 33%* |
*This is the new high-income bracket introduced by the government in 2016.
2017 Provincial Tax Bracket
| Province | Taxable Income Brackets & Rates |
|---|---|
| Alberta | 10% on $126,625 + 12% on the next $25,325 + 13% on the next $50,650 + 14% on the next $101,300, + 15% on remaining amount |
| British Columbia | 5.06% on $38,898 + 7.7% on the next $38,899 + 10.5% on the next $11,523 + 12.29% on the next $19,140, + 14.7% on any remaining amount |
| Ontario | 5.05% on $42,201 + 9.15% on the next $42,203 + 11.16% on the next $65,596 + 12.16% on the next $70,000 + 13.16 % on any remaining amount |
| Manitoba | 10.8% on $31,465 + 12.75% on the next $36,540 + 17.4% on any remaining amount |
| Nova Scotia | 8.79% on $29,590 + 14.95% on the next $29,590 + 16.67% on the next $33,820 +17.5% on the next $57,000 +21% on remaining amount |
| Prince Edward Island | 9.8% on $31,984 + 13.8% on the next $31,985 + 16.7% on remaining amount |
| Newfoundland and Labrador | 8.7% on $35,851 + 14.5% on the next $35,850 + 15.8% on the next $56,309 + 17.3% on the next $51,204 + 18.3% on remaining amount |
| New Brunswick | 9.68% on $41,059 + 14.82% on the next $41,060, + 16.52% on the next $51,388, + 17.84% on the next $18,593, + 20.3% on remaining amount |
| Northwest Territories | 5.9% on $41,585 + 8.6% on the next $41,587 + 12.2% on the next $52,047 + 14.05% on remaining amount |
| Nunavut | 4% on $43,780 + 7% on the next $43,780 + 9% on the next $54,793 + 11.5% on any remaining amount |
| Saskatchewan | 11% on $45,225 + 13% on the next $83,989, + 15% on any remaining amount |
| Yukon | 6.4% on $45,916 + 9% on the next $45,915 + 10.9% on the next $50,522 + 12.8% on the next $357,647 + 15% on the amount over $500,000 |
| Quebec | 16% on $42,705 + 20% on the next $42,700 + 24% on the next $18,510 + 25.75% on any remaining amount |
NOTE: Residents of Quebec receive a Federal refundable Quebec abatement amounting to 16.5% of the basic federal tax
2017 Basic Personal Amount and Other Non-Refundable Tax Credits
The 2017 federal basic personal amount is $11,635. The basic personal amount is a non-refundable tax credit amount, and like every other non-refundable credit, it is calculated on the lowest tax bracket rate of 15%.
Canadian taxpayers should note that these increases to the tax bracket thresholds and various amounts relating to non-refundable credits take effect on Jan. 1, 2017. Increases in amounts for certain benefits, such as the GST/HST credit, however, only take effect on July 1, 2017. This coincides with the beginning of the program year for these benefit payments, which are income-tested and based on your prior year’s net income as reported on your 2016 tax return, which most Canadians will have filed (and the CRA will have assessed) by July 1, 2017.
Other Tax-Related Items
Canada Pension Plan Contributions
The CPP rates are staying the same at 4.95 per cent for employees and 9.9 per cent if you’re self-employed), however, the maximum pensionable earnings for 2017 is set at $55,300, which is up from $54,900 in 2016. the new maximum employer and employee contribution to the plan for 2017 is up slightly to $2,564. Quebec employees contribute to the QPP at a slightly higher rate – 5.4 per cent (up slightly from 5.325 per cent in 2016) to a maximum of $2,797.
Employment Insurance
For 2017, the EI rate is dropping to 1.63 per cent (from 1.88 per cent for the past four years) of insurable earnings, up to a 2017 earnings maximum of $51,300. The maximum employee premium for 2017 will be $836.19. For Quebec employees, the maximum employee premium for 2017 is $651.51. Employers must contribute 1.4 times the amount of the employee’s premiums.
2017 RRSP Limit
The maximum RRSP contribution for 2017 is the lessor of $26,010 or 18 per cent of your 2016 earned income. This limit is then reduced by any pension adjustment. To reach the maximum RRSP contribution for 2017, earned income in 2016 would be $144,500.
AG TAX LLP CAN HELP
If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of US and Canadian tax laws as well as cross-border compliance.
Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- US Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement Planning
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a tax consultation to discuss your queries, please contact us at:
- 604-538-8735 (Greater Vancouver Area, BC)
- 780-702-2732 (Greater Edmonton Area, AB)
Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.
