Canadian Payroll Reporter

News Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: carswell.customerrelations @thomsonreuters.com Website: www.carswell.com One Corporate Plaza 2075 Kennedy Road Toronto, Ontario, Canada M1T 3V4 Director, Carswell Media Karen Lorimer Publisher/Editor-in-Chief Todd Humber Editor Sheila Brawn sbrawn@rogers.com Editor/Supervisor Sarah Dobson Assistant Editor Mallory Hendry Marketing Manager Robert Symes rob.symes@thomsonreuters.com (416) 649-9551 Circulation Co-ordinator Keith Fulford keith.fulford@thomsonreuters.com (416) 649-9585 Payroll Reporter Can R Can R adian adian a www.payroll-reporter.com ©2016 Thomson Reuters Canada Ltd ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise without the written permission of the publisher (Carswell, a Thomson Reuters business). Return Mail Registration # 1522825 | Return Postage Guaranteed Paid News Revenue Toronto Canadian Payroll Reporter is part of the Canadian HR Reporter group of publications: • Canadian HR Reporter — www.hrreporter.com • Canadian Occupational Safety magazine — www.cos-mag.com • Canadian Payroll Reporter — www.payroll-reporter.com • Canadian Employment Law Today — www.employmentlawtoday.com • Canadian Labour Reporter — www.labour-reporter.com See carswell.com for information May 2016 | CPR not include measures to reinstate a threshold for retiree group term life insurance premiums. All employer-paid premiums for employee and retiree life insur- ance coverage are a taxable bene- fit. Before 1995, only premiums for group term life insurance policies of more than $25,000 were taxable. "The CPA's 2015 Employment and Retirement Benefits Survey of nearly 4,000 members iden- tified that 62 per cent of retirees are covered under life policies of $25,000 or less. T4As are cur- rently generated to report very small amounts of taxable bene- fits provided to retired employ- ees for life insurance policies," the association said. In addition, the CPA said it wanted to see changes to the tax- able benefit threshold for mov- ing allowances. It said, "(T)he $650 moving allowance, which has not been revised since 1984, currently reflects an unrealistic- ally low reimbursement for mov- ing costs. The threshold has not been adjusted for inflation and reasonableness." The association said that in pre-budget consultations, it rec- ommended that the federal gov- ernment implement a moving al- lowance threshold that would be equivalent to two weeks' salary. "This change would also align with Revenu Québec's policy and better reflect realistic relocation costs," it said. from EI on page 6 CPA calls for revision of moving allowance support the province's health care system. The proposals would replace rate reductions proposed last year that targeted SMBs in in- dustries other than the primary and manufacturing sectors. The rate reductions would be based on the size of an employer's payroll and the economic sector in which it operates. The budget divides the economic sectors into two groups: primary and manu- facturing sectors and service and construction sectors. For SMBs in the primary and manufacturing sectors whose total annual payroll is no more than $1 million, the budget pro- poses to reduce the HSF rate from 1.6 per cent in 2016 to 1.55 per cent in 2017, 1.5 per cent from 2018 to 2020, and to 1.45 per cent in 2021. For SMBs in the service and construction sectors, the budget proposes to reduce the HSF rate from 2.7 per cent in 2016 to 2.5 per cent in 2017, 2.3 per cent in 2018, 2.15 per cent in 2019, 2.05 per cent in 2020 and to 2.0 per cent in 2021. For SMBs with a total annual payroll of more than $1 million but less than $5 million, partial rate reductions would apply in all sectors. The HSF contribution rate would remain 4.26 per cent for SMBs whose total annual pay- roll is $5 million or more. For employers that are not SMBs, the rates would continue to vary from 2.7 per cent to 4.26 per cent, depending on the size of the employer's payroll. Business groups said the gov- ernment needs to make more tax changes to encourage economic growth. The Quebec Employers Council said in a news release that personal and business taxes in Quebec are too high com- pared to other jurisdictions in North America. The Board of Trade of Metro- politan Montreal said it was disappointed Leitão did not im- plement some of the more fun- damental changes proposed last year by a government committee studying tax reform. The committee, chaired by tax professor Luc Godbout, made recommendations to make the tax system "more competitive, efficient and equitable." In addition to eliminating the personal health contribu- tion and reducing the HSF rate for SMBs, the committee sug- gested increasing the number of personal income tax rates and brackets from four to nine to make it more progressive. The report also recom- mended raising the basic per- sonal amount claimed on a Source Deductions Return (TP- 1015.3-V) to $18,000 (it is cur- rently $11,550) and increasing the rate of the Quebec Sales Tax to 11 per cent. In addition, the report recom- mended the province eliminate a number of payroll-related tax credits and deductions. Last year, Leitão said the go- vernment had already acted on 28 of the committe's 71 recom- mendations and it would study and consult on the remainder before deciding whether to pro- ceed. Other payroll-related meas- ures Leitão proposed include: • Lowering the age at which individuals can claim a tax credit for experienced workers from 63 to 62, beginning in 2018. • Keeping the rate of a tax credit for buying Fondaction shares at 20 per cent for the la- bour-sponsored fund's next two fiscal years. In last year's budget, the government announced the rate would be 20 per cent for shares acquired after May 31, 2015, and before June 1, 2016. • Revenu Québec will take steps to improve its service de- livery, including implementing more online services. The change to the age for claiming the tax credit for expe- rienced workers is designed to encourage older workers to stay in the workforce or re-enter it. The government has proposed various measures to address concerns the province is facing a shrinking pool of workers due to its aging population. from QUEBEC on page 3 Business groups want more tax changes

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