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Archived - Tax Expenditures and Evaluations 2011

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Preface

The Department of Finance has published tax expenditures for personal and corporate income taxes as well as for the Goods and Services Tax since 1994. Beginning in 2000, the tax expenditure report has been separated into two documents. This document, Tax Expenditures and Evaluations, is published annually. It provides estimates and projections for broadly defined tax expenditures as well as evaluations and analytical papers addressing specific tax measures. This year’s edition includes an analytical paper entitled “Distributional Impact of the Federal Personal Income Tax System and Refundable Credits: Analysis by Income, Sex, Age and Family Status” and an evaluation of the Public Transit Tax Credit.

The second document, Tax Expenditures: Notes to the Estimates/Projections, is a reference document which presents the objective of each tax expenditure and explains how the estimates and projections are calculated. This document is published periodically and the 2010 edition is available on the Department of Finance website.

Part 1
Tax Expenditures:
Estimates and Projections

Introduction

The principal function of the tax system is to raise the revenues necessary to fund government expenditures. The tax system can also be used directly to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. These measures are often described as “tax expenditures” because they achieve policy objectives at the cost of lower tax revenue.

To identify and estimate tax expenditures, it is necessary to establish a “benchmark” tax structure that applies the relevant tax rates to a broadly defined tax base—e.g. personal income, business income or consumption. Tax expenditures are then defined as deviations from this benchmark. Reasonable differences of opinion exist about what should be considered part of the benchmark tax system and hence about what should be considered a tax expenditure. A more detailed discussion on the calculation of the tax expenditures presented in this document is available Tax Expenditures: Notes to the Estimates/Projections 2010.

This report takes a broad approach and includes estimates and projections of the revenue loss associated with all but the most fundamental structural elements of the tax system, such as the progressive personal income tax rate structure. This includes not only measures that may reasonably be regarded as tax expenditures but also other measures that may be considered part of the benchmark tax system. The latter are listed separately under “Memorandum Items.” For instance, the Dividend Tax Credit is listed under this heading because its purpose is to reduce or eliminate the double taxation of income earned by corporations and distributed to individuals through dividends. Also included under this heading are measures where data limitations do not permit a separation of the tax expenditure and benchmark components of the measure. This approach provides information on a full range of measures.

Caveats

Care must be taken in interpreting the estimates and projections of tax expenditures in the tables for the following reasons.

The estimates and projections are intended to indicate the potential revenue gain that would be realized by removing individual tax measures. They are developed assuming that the underlying tax base would not be affected by removal of the measure. However, this is an assumption that is unlikely to be true in practice in some cases, as the behaviour of beneficiaries of tax expenditures, overall economic activity and other government policies could change along with the specific tax provision.
The cost of each tax measure is determined separately, assuming that all other tax provisions remain unchanged. Many of the tax expenditures do, however, interact with each other such that the impact of several tax provisions at once cannot generally be calculated by adding up the estimates and projections for each provision.
The federal and provincial income tax systems interact with each other to varying degrees. As a result, changes to tax expenditures in the federal system may have consequences for provincial tax revenues. In this publication, however, any such provincial effects are not taken into account—that is, the tax expenditure estimates and projections address strictly the federal tax system and federal tax revenue.
The tax expenditure estimates and projections presented in this document are developed using the latest available taxation data. Revisions to the underlying data as well as improvements to the methodology can result in substantial changes to the value of a given tax expenditure in successive publications. In addition, estimates and projections for some tax measures, such as the partial inclusion of capital gains, are particularly sensitive to economic parameters and hence may also differ significantly from one publication to the next.

What’s New in the 2011 Report

New tax measures were introduced and others modified in Budget 2011. Changes affecting tax expenditures are described below.

Personal Income Tax

Children’s Arts Tax Credit

Budget 2011 introduced a Children’s Arts Tax Credit allowing parents to claim a 15% non-refundable tax credit based on an amount of up to $500 in eligible expenses per child paid in a year. The credit is available for the enrolment of a child, who is under 16 years of age at the beginning of the year, in an eligible program of artistic, cultural, recreational or developmental activities. For a child who is under 18 years of age at the beginning of the year and is eligible for the Disability Tax Credit, the 15% non-refundable tax credit may be claimed on an additional $500 disability supplement amount when a minimum of $100 is paid in eligible expenses. This measure applies to the 2011 and subsequent taxation years.

Volunteer Firefighters Tax Credit

Budget 2011 introduced a Volunteer Firefighters Tax Credit to allow eligible volunteer firefighters to claim a 15% non-refundable tax credit based on an amount of $3,000. To be eligible, a volunteer firefighter must perform at least 200 hours of volunteer firefighting services in a taxation year, for one or more fire departments, that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires. An individual who claims the credit is ineligible for the existing tax exemption of up to $1,000 for honoraria paid by a government, municipality or public authority in respect of firefighting duties. This measure applies to the 2011 and subsequent taxation years.

Family Caregiver Tax Credit

To provide new support to caregivers of dependants with a mental or physical infirmity, including spouses, common-law partners and minor children, Budget 2011 announced a Family Caregiver Tax Credit. This 15% non-refundable credit will be based on an amount of $2,000 and will apply beginning in 2012. The $2,000 amount will be indexed to account for inflation for 2013 and subsequent taxation years.

Caregivers will benefit from the Family Caregiver Tax Credit by claiming an enhanced amount for an infirm dependant under one of the existing dependency-related credits (i.e., Spouse or Common-Law Partner Credit, Child Tax Credit, Eligible Dependant Credit, Caregiver Credit or Infirm Dependant Credit). The effect of the Family Caregiver Tax Credit on the credit amount that can be claimed and the amount of the dependant’s net income at which the amount will be fully phased out in 2012 are set out for each existing credit in Table A3.2 of Budget 2011.

Budget 2011 also increased for the 2012 taxation year the threshold at which the Infirm Dependant Credit begins to be phased out, so that the enhanced amount is fully phased out at the same income level as the 2012 enhanced Spouse or Common-Law Partner Credit.

Medical Expense Tax Credit for Other Dependants

To better recognize the impact that extraordinary medical expenses can have on a caregiver’s ability to pay tax, Budget 2011 removed the $10,000 limit on eligible expenses that can be claimed under the Medical Expense Tax Credit in respect of a dependent relative. This measure applies to the 2011 and subsequent taxation years.

Child Tax Credit Eligibility

Prior to Budget 2011, rules provided that not more than one individual could claim the Child Tax Credit in respect of the same domestic establishment, which meant that when two or more families shared a home, only one individual in one family could claim the Child Tax Credit in respect of his or her children. For example, if two adult sisters lived together and each had a child under 18 years of age, only one sister could claim the Child Tax Credit for her child.

To ensure that sharing a home does not prevent otherwise-eligible parents from claiming the Child Tax Credit in respect of their children, Budget 2011 repealed the rule that limits the number of Child Tax Credit claimants to one per domestic establishment. This measure applies to the 2011 and subsequent taxation years.

Tuition Tax Credit—Examination Fees

Budget 2011 amended the Tuition Tax Credit to recognize fees paid to an educational institution, professional association, provincial ministry or other similar institution to take an examination that is required to obtain a professional status recognized by federal or provincial statute, or to be licensed or certified in order to practise a profession or trade in Canada. Consistent with the general rule that applies for the existing Tuition Tax Credit, the total of tuition and examination fees paid to the institution, association or ministry in respect of a year must exceed $100 to be eligible. These amendments do not apply to fees in respect of examinations taken in order to begin study in a profession or field, such as a medical college admission test. This measure applies to eligible amounts paid in respect of examinations taken in 2011 and subsequent taxation years.

Education Tax Measures—Study Abroad

To improve the tax recognition of education costs for Canadian post-secondary students who study outside Canada, Budget 2011 reduced the minimum course-duration requirement that a Canadian student at a foreign university must meet in order to claim the Tuition, Education and Textbook Tax Credits to 3 consecutive weeks from 13 consecutive weeks. Also, the 13-consecutive-week requirement for Educational Assistance Payments from a Registered Education Savings Plan was reduced to 3 consecutive weeks. This measure applies with respect to tuition fees paid for courses taken in the 2011 and subsequent taxation years, and to Educational Assistance Payments made after 2010.

Agri-Québec

Agriculture and Agri-Food Canada offers, through the AgriInvest program, an incentive to encourage farmers to set aside earnings in order to provide coverage against small income declines. Under the AgriInvest program, farmers who contribute to an AgriInvest account receive matching government contributions. Furthermore, the government contributions and interest earned in respect of the account are not taxable until withdrawn.

Beginning in 2011, the province of Quebec is supplementing AgriInvest with the new Agri-Québec program, an agricultural income stabilization account program that is very similar to the AgriInvest program.

Budget 2011 announced amendments to ensure that the Agri-Québec program is accorded the same income tax treatment as is currently provided to the AgriInvest program. These amendments apply to the 2011 and subsequent taxation years.

Mineral Exploration Tax Credit for Flow-Through Share Investors

The Mineral Exploration Tax Credit is a reduction in tax, available to individuals who invest in
flow-through shares, equal to 15% of specified mineral exploration expenses incurred in Canada and transferred to flow-through share investors. The credit was introduced on a temporary basis in 2000 and has been extended since then. Budget 2011 extended eligibility for the credit for an additional year to flow-through share agreements entered into on or before March 31, 2012. Under the one-year “look-back” rule, funds raised with the benefit of the credit in 2012, for example, can be spent on eligible exploration up to the end of 2013.

Donations of Publicly Listed Flow-Through Shares

Budget 2011 announced rules to limit the excessive tax benefits that can result on the donation of flow-through shares as a result of the interaction between the exemption from capital gains tax on the donation of publicly listed securities and the tax incentives for flow-through shares. The new rules will allow the exemption only to the extent that the capital gain on the donation exceeds a threshold amount (generally equal to the acquisition price of the flow-through shares) at the time of the donation. This measure applies to flow-through shares that were issued to the taxpayer under a flow-through share agreement entered into on or after March 22, 2011.

Corporate Income Tax

Qualifying Environmental Trusts

The Income Tax Act contains special rules for qualifying environmental trusts (QETs) that facilitate the pre-funding of the costs associated with reclaiming or restoring a mine, quarry or waste disposal site. Budget 2011 expanded the scope of the QET rules to include trusts that are required to be established to fund reclamation costs associated with pipelines, applicable to trusts established after 2011. In addition, in order to provide more flexibility to regulators in determining appropriate investments for the trusts that they mandate, Budget 2011 expanded the range of eligible investments that a QET can make, applicable to trusts created after 2011 or those created before 2012 if the trust and the regulatory authority jointly so elect. As pipeline companies are not anticipated to begin setting aside funds until 2015, no financial impact is anticipated to result from these changes until that time.

The Tax Expenditures

Tables 1 to 3 provide tax expenditure values for personal income tax, corporate income tax and the Goods and Services Tax (GST) for the years 2006 to 2011. Values for the years 2006 to 2009 are generally based on tax data supplied by the Canada Revenue Agency, or are calculated from data supplied by Statistics Canada and other government departments and agencies. Values for the 2010 and 2011 projections are usually determined from the historical relationship between a tax expenditure and relevant economic variables. These economic variables are generally based on the forecast presented in the November 8, 2011 Update of Economic and Fiscal Projections. See Chapter 1 of Tax Expenditures: Notes to the Estimates/Projections 2010^[1] for additional details on the methodology.

The tax expenditures are grouped according to functional categories. This grouping is provided solely for presentational purposes and is not intended to reflect underlying policy considerations.

All estimates and projections are reported in millions of dollars. The letter “S” (“small”) indicates that the absolute value of the tax expenditure is less than $2.5 million, “n.a.” signifies that data are not available to support a meaningful estimate/projection, and a dash means that the tax expenditure is not in effect. The inclusion in the report of items for which estimates and projections are not available reflects the intention to provide information on measures included in the tax system even if it is not always possible to provide their revenue impacts. Work is continuing to obtain quantitative estimates and projections where possible.

Table 1
Personal Income Tax Expenditures ($ millions)*
	Estimates¹			Projections¹

	2006	2007	2008	2009	2010	2011
Charitable Donations and Political Contributions
Charitable Donations Tax Credit (excluding donations of assets subject to a reduced inclusion rate for capital gains)²	2,325	2,345	2,270	2,095	2,200	2,280
Donations of publicly listed securities³
Charitable Donations Tax Credit	125	165	90	98	110	115
Reduced inclusion rate for capital gains	37	50	27	29	33	34
Total tax expenditure	160	215	115	130	145	150
Donations of ecologically sensitive land³
Charitable Donations Tax Credit	4	6	9	8	5	7
Reduced inclusion rate for capital gains	S	S	3	3	S	S
Total tax expenditure	5	8	11	11	7	9
Donations of cultural property³
Charitable Donations Tax Credit	28	22	21	20	18	18
Non-taxation of capital gains	9	7	7	6	6	6
Total tax expenditure	37	30	27	26	25	24
Political Contribution Tax Credit⁴	24	20	31	23	21	32
Culture
Assistance for artists	S	S	S	S	S	S
Children's Arts Tax Credit⁵	–	–	–	–	–	100
Deduction for artists and musicians	S	S	S	S	S	S
Education
Adult basic education—tax deduction for tuition assistance	5	5	5	5	5	5
Apprentice vehicle mechanics' tools deduction	4	3	4	4	4	4
Education Tax Credit⁶	240	210	215	200	205	210
Textbook Tax Credit^6,7	46	41	42	38	39	41
Tuition Tax Credit⁶	265	250	255	245	255	280
Transfer of Education, Textbook and Tuition Tax Credits	470	480	485	490	495	510
Carry-forward of Education, Textbook and Tuition Tax Credits⁸	420	425	540	490	510	535
Exemption of scholarship, fellowship and bursary income⁹	37	37	41	39	40	43
Registered Education Savings Plans	170	185	165	180	175	185
Student Loan Interest Credit	66	71	63	63	65	68
Employment
Canada Employment Credit¹⁰	470	1,835	1,905	1,910	1,955	2,025
Child care expense deduction	740	750	790	775	790	810
Deduction for income earned by military and police deployed to high-risk international missions	25	35	36	36	37	38
Deduction of home relocation loans	S	S	S	S	S	S
Deduction of other employment expenses	915	970	990	985	1,015	1,055
Deduction for tradespeople's tool expenses¹¹	4	4	4	4	4	4
Deduction of union and professional dues	660	705	755	740	765	795
Deferral of salary through leave of absence/sabbatical plans	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Disability supports deduction	S	S	S	S	S	S
Employee benefit plans	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Employee stock option deduction¹²	1,085	1,155	760	435	710	725
Moving expense deduction	115	125	125	125	130	135
Non-taxation of certain non-monetary employment benefits	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of strike pay	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Northern residents deductions¹³	140	150	160	155	160	165
Overseas Employment Credit	56	64	78	72	73	75
Tax-free amount for emergency service volunteers	14	14	14	14	14	12
Volunteer Firefighters Tax Credit¹⁴	–	–	–	–	–	15
Working Income Tax Benefit¹⁵	–	455	480	1,025	1,030	1,030
Family
Adoption Expense Tax Credit	S	3	S	S	S	S
Caregiver Credit	85	84	90	96	100	105
Child Tax Credit¹⁶	–	1,445	1,470	1,465	1,485	1,525
Deferral of capital gains through transfers to a spouse, spousal trust or family trust	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Family Caregiver Tax Credit¹⁷	–	–	–	–	–	–
Infirm Dependant Credit	5	5	5	5	5	6
Spouse or Common-Law Partner Credit¹⁸	1,205	1,240	1,225	1,325	1,355	1,400
Eligible Dependant Credit¹⁹	675	755	750	785	785	805
Inclusion of the Universal Child Care Benefit in the income of an eligible dependant²⁰	–	–	–	–	5	5
Farming and Fishing
Lifetime capital gains exemption for farm and fishing property²¹	280	385	385	320	330	335
Cash basis accounting	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deferral of capital gains through intergenerational rollovers of family farms, family fishing businesses and commercial woodlots	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deferral of income from destruction of livestock	S	S	S	S	S	S
Deferral of income from sale of livestock during drought, flood or excessive moisture years	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deferral of income from grain sold through cash purchase tickets	10	35	45	-10	-10	30
Deferral through 10-year capital gain reserve	S	S	S	S	S	S
Exemption from making quarterly tax instalments	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
AgriInvest (farm savings account)²²	–	S	20	15	15	15
Agri-Québec (farm savings account)²³	–	–	–	–	–	5
Flexibility in inventory accounting	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Tax treatment of the Net Income Stabilization Account²⁴
Deferral of tax on government contributions	S	S	S	S	–	–
Deferral of tax on bonus and interest income	S	S	S	S	–	–
Taxable withdrawals	-8	S	S	S	–	–
Federal-Provincial Financing Arrangements
Logging Tax Credit	S	S	S	S	S	S
Quebec Abatement	3,495	3,520	3,605	3,405	3,660	3,810
Transfer of income tax points to provinces	16,995	17,450	17,585	16,225	17,490	18,195
General Business and Investment
$200 capital gains exemption on foreign exchange transactions	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
$1,000 capital gains exemption on personal-use property	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Accelerated deduction of capital costs	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deduction of carrying charges incurred to earn income	1,105	1,270	1,200	905	1,000	1,020
Deferral through use of billed-basis accounting by professionals	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deferral through five-year capital gain reserve	25	15	10	10	10	10
Investment tax credits	20	20	20	15	15	16
Flow-through share deductions	435	435	215	165	245	280
Mineral Exploration Tax Credit for flow-through share investors²⁵	92	150	45	70	105	125
Reclassification of expenses under flow-through shares²⁶	13	-4	-10	-11	-5	-3
Partial inclusion of capital gains²⁷	5,100	5,740	2,995	2,425	3,535	3,605
Taxation of capital gains upon realization	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Tax-Free Savings Account²⁸	–	–	–	65	165	220
Small Business
Lifetime capital gains exemption for small business shares²⁹	440	585	620	475	550	560
Deduction of allowable business investment losses	25	20	30	30	30	30
Deferral through 10-year capital gain reserve	S	S	S	S	S	S
Labour-Sponsored Venture Capital Corporations Credit	125	120	120	125	130	130
Non-taxation of provincial assistance for venture investments in small businesses	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Rollovers of investments in small businesses	5	10	10	5	5	5
Health
Children's Fitness Tax Credit³⁰	–	90	105	110	115	115
Disability Tax Credit³¹	540	585	635	610	635	665
Medical Expense Tax Credit³²	875	915	995	1,035	1,045	1,090
Non-taxation of business-paid health and dental benefits	2,310	2,535	2,620	2,795	2,970	3,155
Refundable Medical Expense Supplement³³	115	110	120	135	135	140
Income Maintenance and Retirement
Age Credit³⁴	1,810	1,810	1,840	2,060	2,150	2,260
Deferred Profit-Sharing Plans	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of certain amounts received as damages in respect of personal injury or death	15	18	20	19	20	22
Non-taxation of Guaranteed Income Supplement and Allowance benefits³⁵	180	170	175	82	92	105
Non-taxation of investment income from life insurance policies³⁶	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of RCMP pensions/compensation in respect of injury, disability or death	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of social assistance benefits³⁷	185	145	165	135	140	145
Non-taxation of up to $10,000 of death benefits	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of veterans' allowances, income support benefits, civilian war pensions and allowances, and other service pensions (including those from Allied countries)	S	S	S	S	S	S
Non-taxation of veterans' disability pensions and support for dependants	150	150	150	135	140	140
Non-taxation of veterans' Disability Awards	3	11	19	22	31	35
Non-taxation of workers' compensation benefits	630	655	695	640	645	645
Registered Disability Savings Plans³⁸	–	–	S	S	S	4
Pension Income Credit³⁹	840	975	990	900	940	975
Pension income splitting⁴⁰	–	840	850	850	875	925
Registered Pension Plans⁴¹
Deduction for contributions	9,830	9,430	9,840	11,730	11,770	11,860
Non-taxation of investment income	13,080	14,825	6,720	7,145	10,320	11,155
Taxation of withdrawals	-7,295	-6,790	-6,825	-6,585	-6,970	-7,390
Net tax expenditure	15,615	17,465	9,735	12,290	15,120	15,625
Registered Retirement Savings Plans⁴¹
Deduction for contributions	7,325	7,405	7,245	6,995	7,180	7,390
Non-taxation of investment income	7,990	9,110	3,700	4,095	6,855	7,645
Taxation of withdrawals	-4,620	-5,030	-4,825	-4,595	-4,865	-5,125
Net tax expenditure	10,695	11,485	6,120	6,495	9,170	9,910
Supplementary information: present value of tax-assisted retirement savings plans⁴²	8,850	9,080	9,105	10,185	10,275	10,320
Saskatchewan Pension Plan	S	S	S	S	S	S
Treatment of alimony and maintenance payments	86	87	92	94	99	100
U.S. Social Security benefits⁴³	S	S	S	S	S	S
Other Items
Deduction for certain contributions by individuals who have taken vows of perpetual poverty	S	S	S	S	S	S
Deduction for clergy residence	75	82	82	80	83	85
First-Time Home Buyers’ Tax Credit⁴⁴	–	–	–	130	115	115
Home Renovation Tax Credit⁴⁵	–	–	–	2,265	–	–
Non-taxation of capital gains on principal residences⁴⁶	4,325	5,285	3,015	3,785	3,875	4,235
Non-taxation of income from the Office of the Governor General	S	S	S	S	S	S
Non-taxation of income of status Indians and Indian bands on reserve	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Special tax computation for certain retroactive lump-sum payments	S	S	S	S	S	S
Public Transit Tax Credit⁴⁷	45	110	135	140	145	150
Memorandum Items
Avoidance of Double Taxation
Dividend gross-up and credit⁴⁸	2,330	3,015	3,405	3,815	3,835	3,745
Foreign Tax Credit	705	780	750	740	760	785
Non-taxation of capital dividends	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Loss Offset Provisions
Capital loss carry-overs⁴⁹	340	330	145	215	395	405
Farm and fishing loss carry-overs	15	15	15	10	15	15
Non-capital loss carry-overs	50	70	55	55	55	55
Social and Employment Insurance Programs
Canada Pension Plan and Quebec Pension Plan
Employee-Paid Contribution Credit	2,665	2,750	2,875	2,885	2,985	3,130
Non-taxation of employer-paid premiums	4,145	4,445	4,650	4,590	4,765	5,030
Employment Insurance and Quebec Parental Insurance Plan
Employee-Paid Contribution Credit⁵⁰	965	945	955	955	995	1,075
Non-taxation of employer-paid premiums	1,835	1,865	1,885	1,865	1,925	2,075
Other
Basic Personal Amount⁵¹	24,350	26,015	26,205	27,795	28,505	29,510
Deferral through capital gains rollovers	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of lottery and gambling winnings	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of allowances for diplomats and other government employees posted abroad	27	29	33	39	42	44
Partial deduction of meals and entertainment expenses	125	150	150	160	175	180
* The elimination of a tax expenditure would not necessarily yield the full tax revenues shown in the table. See the publication Tax Expenditures: Notes to the Estimates/Projections 2010 for a discussion of the reasons for this. Notes: ¹ Unless otherwise indicated in the footnotes, changes in the estimates and projections from those in last year’s report, as well as variations from year to year, result from new data and changes in the economic variables affecting the tax expenditures. Changes from last year’s report may also reflect the availability of new data sources as well as methodological improvements, in which case the estimates and projections presented in this year’s publication may not be comparable to those published in previous reports. In addition, the tax expenditure estimates and projections for a given measure are often affected by changes to other measures. In particular, the introduction or enhancement of broad-based non-refundable tax credits (e.g. the Basic Personal Amount, Age Credit, Pension Income Credit and Child Tax Credit), along with reductions in the lowest personal income tax rate, tend to reduce tax expenditure estimates and projections. Further details on the tax expenditures presented in this table are available in Tax Expenditures: Notes to the Estimates/Projections 2010. ² The components of the Charitable Donations Tax Credit associated with donations of publicly listed securities, ecologically sensitive land and cultural property are presented separately (see note 3). The estimates and projections presented on this line reflect the Charitable Donations Tax Credit associated with all other donations. The total tax expenditure for the Charitable Donations Tax Credit would take into account all relevant components. ³ The total tax expenditure cost of donations of these types of assets has two components: the cost of the Charitable Donations Tax Credit and the revenue forgone from the reduced inclusion rate for capital gains (or the non-taxation of capital gains in the case of gifts of cultural property). Budget 2006 reduced the inclusion rate for capital gains on donations of publicly listed securities and ecologically sensitive land from 25% to zero, effective May 2, 2006. Budget 2007 extended this provision to include donations of eligible securities to private foundations, effective March 19, 2007. Budget 2011 announced rules, effective March 22, 2011, to limit the excessive tax benefits that can result on the donation of flow-through shares as a result of the interaction between the exemption from capital gains tax on the donation of publicly listed securities and the tax incentives for flow-through shares. See the “What’s New in the 2011 Report” section for details. The components may not add up to the totals due to rounding. ⁴ The higher levels for this tax expenditure in 2006, 2008 and 2011 are due to contributions in respect of the 39th, 40th and 41st general elections. ⁵ This measure was introduced in Budget 2011, effective 2011. See the “What’s New in the 2011 Report” section for details. ⁶ These tax expenditures relate to amounts earned and claimed in the year by students (i.e. neither transferred nor carried forward). Changes to these measures were introduced in Budget 2011, effective 2011. See the “What’s New in the 2011 Report” section for details. ⁷ This measure was introduced in Budget 2006, effective 2006. ⁸ For a given year, this tax expenditure represents the value of Education, Textbook and Tuition Tax Credits earned in past years and used in that year. The tax expenditure does not include the pool of unused Education, Textbook and Tuition Tax Credits that have been accumulated but will be deferred for use in future years. ⁹ Budget 2006 exempted all amounts received for post-secondary scholarships, fellowships and bursaries from tax, effective 2006, where these amounts are received in connection with enrolment in a program for which the student can claim the Education Tax Credit. The maximum exemption for tax years prior to 2006 was $3,000 for these students. Budget 2007 extended this treatment to elementary and secondary school students, effective 2007. ¹⁰ This measure was introduced in Budget 2006. Because it was effective in July 2006, the maximum amount on which the credit is calculated for the 2006 taxation year is $250. For 2007, the maximum amount on which the credit is calculated was increased to $1,000. This maximum amount has been indexed for years after 2007. ¹¹ This measure was introduced in Budget 2006, effective 2006. ¹² This measure was changed in Budget 2010, effective March 4, 2010. ¹³ Budget 2008 enhanced this measure, effective 2008. ¹⁴ The Volunteer Firefighters Tax Credit was introduced in Budget 2011, effective 2011. See the “What’s New in the 2011 Report” section for details. The value of the tax expenditure for the tax-free amount for emergency service volunteers decreased in 2011 to reflect the introduction of the Volunteer Firefighters Tax Credit. ¹⁵ This measure was introduced in Budget 2007, effective 2007. Budget 2009 enhanced this measure, effective 2009. ¹⁶ This measure was introduced in Budget 2007, effective 2007. ¹⁷ This measure was introduced in Budget 2011, effective 2012. See the “What’s New in the 2011 Report” section for details. ¹⁸ Budget 2007 and the 2007 Economic Statement enhanced this credit, effective 2007. Budget 2009 enhanced the credit, effective 2009. ¹⁹ Budget 2007 and the 2007 Economic Statement enhanced this credit, effective 2007. Budget 2009 enhanced the credit, effective 2009. ²⁰ This measure was introduced in Budget 2010, effective 2010. ²¹ Budget 2006 extended the lifetime capital gains exemption (LCGE) to qualifying fishing property, effective May 2, 2006. Budget 2007 introduced an increase in the LCGE to $750,000 from $500,000, effective March 19, 2007. ²² This measure was introduced in Budget 2007. In December 2007, agreements were signed with the provinces to implement the program and the disbursement of funds began. ²³ This measure was introduced in Budget 2011. See the “What’s New in the 2011 Report” section for details. ²⁴ The Net Income Stabilization Account (NISA) and the Canadian Farm Income Program were replaced by the Canadian Agricultural Income Stabilization Program, with the effect that government contributions under NISA ceased as of December 31, 2003. All funds in participant accounts were paid out by March 31, 2009. Tax expenditure estimates and projections reflect the wind-down schedule. ²⁵ This credit was introduced on a temporary basis in 2000 and has been extended since. It is set to expire on March 31, 2012. See the “What’s New in the 2011 Report” section for details. ²⁶ The overall tax expenditure is negative for 2007 and subsequent years because the positive tax expenditure associated with new spending in those years is more than offset by the negative tax expenditure resulting from reclassifications that occurred in previous years. For more information, see the entry for this item in Tax Expenditures: Notes to the Estimates/Projections 2010. ²⁷ Projections for 2009 and 2010 are based on preliminary tax return information. This tax expenditure does not take into account the tax value of current-year capital losses applied against previous-year capital gains. ²⁸ The Tax-Free Savings Account was introduced in Budget 2008, effective January 1, 2009. The amount of the tax expenditure for this measure has been adjusted upwards for 2009 and 2010, reflecting improvements in data and methodology. ²⁹ Budget 2007 introduced an increase in the lifetime capital gains exemption to $750,000 from $500,000, effective March 19, 2007. ³⁰ This measure was introduced in Budget 2006, effective 2007. Budget 2007 enhanced this measure for children with disabilities. ³¹ The amount of the tax expenditure for this measure has been adjusted upwards for all years, reflecting improvements in data and methodology. ³² Budget 2010 made expenses incurred for purely cosmetic procedures ineligible for the credit (effective after March 4, 2010). Budget 2011 removed the $10,000 limit on eligible expenses that can be claimed under the Medical Expense Tax Credit in respect of a dependent relative, effective 2011. See the “What’s New in the 2011 Report” section for details. ³³ Budget 2006 increased the maximum amount from $767 to $1,000, effective 2006. ³⁴ The Age Credit amount was increased by $1,000, to $5,066 from $4,066, in the Tax Fairness Plan (announced October 31, 2006 and confirmed in Budget 2007), effective January 1, 2006. Budget 2009 increased the amount by $1,000, to $6,408 from $5,408, effective 2009. ³⁵ The decline in this tax expenditure in 2007 and 2009 is mainly explained by the increase in non-taxpaying seniors due to increases in the Basic Personal Amount and other non-refundable credits relevant to seniors (such as the Age Credit). ³⁶ Although this measure provides tax relief for individuals, it is implemented through the corporate income tax system. Tax expenditure amounts are shown under “investment income credited to life insurance policies” in the corporate income tax table. ³⁷ The decline in this tax expenditure in 2007 generally reflects the increase in non-taxpaying low-income earners due to increases in the Basic Personal Amount and the Eligible Dependant Amount, as well as the introduction of the Child Tax Credit. The decline in 2009 generally reflects the Budget 2009 increase in the Basic Personal Amount and related amounts. ³⁸ This measure was introduced in Budget 2007, effective 2008. ³⁹ Budget 2006 doubled the maximum amount that can be claimed under the Pension Income Credit to $2,000 from $1,000 for the 2006 and subsequent taxation years. The introduction of pension income splitting in 2007 increases the number of individuals claiming the Pension Income Credit and thus increases the value of this tax expenditure (i.e. spouses who previously did not have pension income, and thus could not claim the credit, now receive eligible pension income transferred from their spouse, allowing them to claim the Pension Income Credit). ⁴⁰ This measure, announced on October 31, 2006 in the Tax Fairness Plan and confirmed in Budget 2007, allows Canadian residents to allocate up to one-half of eligible pension income to their resident spouse or common-law partner, effective 2007. ⁴¹ Estimates and projections vary from those in last year’s report due to changes in estimated levels of assets, contributions, investment income, capital gains/losses and withdrawals. In general, tax expenditure estimates and projections will be higher in years in which assets grow strongly, reflecting the tax forgone on that investment income, and lower in years in which assets grow slowly or decline. ⁴² The present-value estimates reflect the lifetime cost of a given year’s contributions. This definition is different from that used for the cash-flow estimates and thus the two sets of estimates are not directly comparable. Further information on how these estimates are calculated is contained in the paper “Present-Value Tax Expenditure Estimates of Tax Assistance for Retirement Savings,” which was published in the 2001 edition of this report. The present-value estimates do not reflect the potential effect of Tax-Free Savings Accounts on the average tax rate used to calculate the present value of the forgone tax on investment income. ⁴³ This measure was changed in Budget 2010, effective January 1, 2010. ⁴⁴This measure was introduced in Budget 2009, effective January 28, 2009. The projection for 2009 is based on preliminary tax return information. ⁴⁵This temporary measure was introduced in Budget 2009 for the 2009 tax year only. See note 46 of Table 1 in the 2010 edition of this publication for details. ⁴⁶The estimates and projections for this tax expenditure reflect the cyclicality of the housing market and its impact on the number of residence resales and on the average price of residences. Estimates and projections are based on housing market data and resale forecasts provided by Canada Mortgage and Housing Corporation and the Canadian Real Estate Association. Data on major additions and renovations obtained from Statistics Canada are used to estimate the average amount of capital expenditures on principal residences, which reduces the estimated amount of capital gains. ⁴⁷This measure was introduced in Budget 2006, effective July 1, 2006. Budget 2007 extended the credit to electronic fare cards and weekly passes used on an ongoing basis. ⁴⁸The estimates and projections include the revenue impact associated with both the enhanced Dividend Tax Credit, mainly applicable to dividends from large businesses, and the basic Dividend Tax Credit applicable to other dividends, mostly from small businesses. Budget 2008 introduced reductions in the enhanced Dividend Tax Credit rate and gross-up factor beginning in 2010 to mirror the general corporate income tax reductions introduced in the 2007 Economic Statement. ⁴⁹This tax expenditure represents the revenue impact resulting from the application of prior years’ capital losses against net capital gains realized in the current year. ⁵⁰Estimates and projections include contributions paid to the Quebec Parental Insurance Plan, which took effect January 1, 2006. Effective in 2010, a tax credit is also provided in respect of premiums paid by a self-employed individual under the Employment Insurance Act. ⁵¹The Basic Personal Amount has been increased by amounts over and above the inflation protection provided by full indexation (due to changes in Budget 2005, Budget 2006, the 2007 Economic Statement and Budget 2009).

Table 2
Corporate Income Tax Expenditures ($ millions)*
	Estimates¹				Projections¹

	2006	2007	2008	2009	2010	2011
Charities, Gifts and Political Contributions
Deductibility of charitable donations	495	455	415	375	395	390
Donations of publicly listed securities²
Deductibility of donations³	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Reduced inclusion rate for capital gains	36	55	106	34	62	67
Total tax expenditure	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Donations of ecologically sensitive land²
Deductibility of donations	5	3	4	11	S	5
Reduced inclusion rate for capital gains	3	22	4	10	S	5
Total tax expenditure	7	25	8	21	3	10
Donations of cultural property²
Deductibility of donations	19	8	6	4	19	10
Non-taxation of capital gains	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Total tax expenditure	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deductibility of gifts of medicine	–	S	S	S	S	S
Deductibility of gifts to the Crown	S	S	S	S	S	S
Non-taxation of registered charities	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Non-taxation of other non-profit organizations (other than registered charities)	160	175	115	90	95	85
Political Contribution Tax Credit⁴	S	S	–	–	–	–
Culture
Canadian Film or Video Production Tax Credit	195	210	220	230	240	255
Non-deductibility of advertising expenses in foreign media	S	S	S	S	S	S
Federal-Provincial Financing Arrangements
Income tax exemption for provincial and municipal corporations	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Transfer of income tax points to provinces	2,045	2,070	1,725	1,900	2,025	2,270
Logging Tax Credit	21	18	5	4	8	8
General Business and Investment
Accelerated deduction of capital costs	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Capital Gains
Deferral through five-year capital gain reserve	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Partial inclusion of capital gains	5,880	5,480	4,205	2,950	3,915	3,920
Taxation of capital gains upon realization	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Investment Tax Credits
Atlantic Investment Tax Credit
Earned and claimed in current year	95	120	65	90	140	150
Claimed in current year but earned in prior years	70	165	75	30	40	115
Earned in current year but carried back to prior years	6	3	S	7	32	8
Total tax expenditure	171	288	142	127	212	273
Scientific Research and Experimental Development Investment Tax Credit
Earned and claimed in current year	2,160	2,255	2,440	2,430	2,580	2,685
Claimed in current year but earned in prior years	565	990	770	775	820	855
Earned in current year but carried back to prior years	100	90	195	120	115	115
Total tax expenditure	2,825	3,335	3,405	3,325	3,515	3,655
Apprenticeship Job Creation Tax Credit
Earned and claimed in current year	18	51	64	60	61	61
Claimed in current year but earned in prior years	S	3	10	11	13	13
Earned in current year but carried back to prior years	S	3	5	5	7	7
Total tax expenditure	19	56	80	76	81	81
Investment Tax Credit for Child Care Spaces	–	S	S	S	S	S
Small Business
Deduction of allowable business investment losses	10	8	11	12	13	13
Low tax rate for small businesses⁵	3,505	4,055	4,460	4,340	4,210	3,555
Non-taxation of provincial assistance for venture investments in small businesses	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
International
Exemption from Canadian income tax of income earned by non-residents from the operation of a ship or aircraft in international traffic	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Exemption from tax for international banking centres⁶	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Exemptions from non-resident withholding tax
Dividends⁷	1,145	1,395	2,590	1,485	1,580	1,640
Interest	2,055	1,960	1,305	1,685	1,835	1,910
Rents and royalties	225	305	270	310	330	345
Management fees	100	110	120	150	160	165
Non-taxation of life insurance companies' world income	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Tax treatment of active business income of foreign affiliates of Canadian corporations and deductibility of expenses incurred to invest in foreign affiliates	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Sectoral Measures
Farming
Cash basis accounting	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deferral of income from destruction of livestock	S	S	S	S	S	S
Deferral of income from sale of livestock during drought, flood or excessive moisture years⁸	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deferral of income from grain sold through cash purchase tickets	-8	-25	-26	8	-6	-9
Flexibility in inventory accounting	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Agricultural co-operatives—patronage dividends issued as shares	3	3	7	5	4	4
AgriInvest (farm savings account)⁹	–	–	3	S	3	3
Agri-Québec (farm savings account)¹⁰	–	–	–	–	–	S
Exemption for farmers’ and fishers’ insurers	7	4	S	5	7	6
Natural Resources
Corporate Mineral Exploration and Development Tax Credit	5	15	25	17	24	26
Deductibility of contributions to a qualifying environmental trust¹¹	3	S	S	S	S	S
Earned depletion¹²	48	6	4	S	11	11
Net impact of the resource allowance and the limited deductibility of Crown royalties and mining taxes¹³	17	S	–	–	–	–
Tax rate on resource income¹⁴	-430	-30	–	–	–	–
Transitional arrangement for the Alberta Royalty Tax Credit¹⁵	S	S	–	–	–	–
Flow-through share deductions	110	120	75	70	65	60
Reclassification of expenses under flow-through shares¹⁶	-5	-3	-4	-3	S	S
Other Sectors
Exemption from branch tax for transportation, communications, and iron ore mining corporations	7	5	5	5	14	15
Film or Video Production Services Tax Credit	115	95	100	100	105	110
Low tax rate for credit unions	62	73	84	75	73	60
Surtax on the profits of tobacco manufacturers¹⁷	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Other Items
Deductibility of countervailing and anti-dumping duties	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deductibility of earthquake reserves	S	S	S	S	S	S
Deferral through use of billed-basis accounting by professional corporations	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Holdback on progress payments to contractors¹⁸	79	59	60	42	39	39
Investment income credited to life insurance policies	295	280	270	275	260	275
Tax status of certain federal Crown corporations¹⁹	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Memorandum Items
Avoidance of Double Taxation—Integration of Personal and Corporate Income Tax
Investment corporation deduction	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Refundable capital gains for investment and mutual fund corporations	415	430	89	51	185	185
Refundable taxes on investment income of private corporations
Additional Part I tax²⁰	-1,945	-2,145	-2,355	-1,855	-2,035	-2,245
Part IV tax	-2,650	-3,065	-4,675	-4,820	-3,725	-3,800
Dividend refund	5,445	6,080	8,170	8,425	7,010	7,145
Net tax expenditure	850	870	1,140	1,750	1,250	1,100
Loss Offset Provisions
Capital loss carry-overs
Net capital losses carried back	78	205	510	410	260	170
Net capital losses applied to current year	590	755	465	270	460	445
Farm and fishing loss carry-overs
Farm and fishing losses carried back	14	13	15	17	20	18
Farm and fishing losses applied to current year	57	39	37	47	40	35
Non-capital loss carry-overs
Non-capital losses carried back	1,720	2,140	6,145	3,240	2,680	2,115
Non-capital losses applied to current year	4,495	4,800	3,770	4,215	3,790	3,295
Other
Deferral through capital gains rollovers	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Deduction for intangible assets	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Partial deduction of meals and entertainment expenses	325	340	305	255	280	275
Patronage dividend deduction	360	475	420	340	315	295
* The elimination of a tax expenditure would not necessarily yield the full tax revenues shown in the table. See the publication Tax Expenditures: Notes to the Estimates/Projections 2010 for a discussion of the reasons for this. Notes: ¹ Unless otherwise indicated in the footnotes, changes in the estimates and projections from those in last year’s report, as well as variations from year to year, result from new data and changes in the economic variables affecting the tax expenditures. Changes from last year’s report may also reflect the availability of new data sources as well as methodological improvements, in which case the estimates and projections presented in this year’s publication may not be comparable to those published in previous reports. Estimates and projections also reflect the impact of reductions in the general corporate income tax rate from 21% to 19.5% on January 1, 2008, 19.0% on January 1, 2009, 18.0% on January 1, 2010 and 16.5% on January 1, 2011. The 4% corporate surtax (equivalent to a 1.12% corporate income tax rate) was eliminated on January 1, 2008. Further details on the tax expenditures presented in this table are available in Tax Expenditures: Notes to the Estimates/Projections 2010. ² The total tax expenditure cost of donations of these types of assets has two components: the revenue forgone as a result of the reduced inclusion rate and the cost of the deductibility of charitable donations. Budget 2006 reduced the inclusion rate for capital gains on donations of publicly listed securities and ecologically sensitive land from 25 per cent to zero, effective May 2, 2006. Budget 2007 extended this provision to include donations of eligible securities to private foundations, effective March 19, 2007. ³ There are no data available that allow this tax expenditure to be separated from the “deductibility of charitable donations” category. Therefore, the value of this tax expenditure is included under “deductibility of charitable donations.” ⁴ The Federal Accountability Act prohibits political contributions from corporations as of January 1, 2007. Some tax expenditure occurred in 2007, however, as many firms reporting income in the 2007 tax year earned a portion of that income in the 2006 calendar year. ⁵ The amount of this tax expenditure reflects the impact of Budget 2006 and Budget 2009, which increased the amount of small business income eligible for the lower tax rate, and Budget 2004, which accelerated the Budget 2003 increase. In addition, Budget 2006 reduced the small business tax rate and the 2007 Economic Statement accelerated the rate reduction. The lower tax expenditure for 2007 compared to last year’s report reflects an improvement in data and methodology. The reduction in the tax expenditure between 2008 and 2011 partly reflects the reduction in the general corporate income rate. ⁶ For confidentiality reasons, estimates and projections are not published. ⁷ This category includes the tax expenditure attributable to the exemption of estate and trust income distributions, including distributions by income trusts. ⁸ This measure was expanded to include prescribed flood or excessive moisture regions on March 5, 2009. ⁹ This measure was introduced in Budget 2007. In December 2007, agreements were signed with the provinces to implement the program and the disbursement of funds began. ¹⁰ This measure was introduced in Budget 2011. See the “What’s New in the 2011 Report” section for details. ¹¹ The measure was expanded in Budget 2011 to include trusts that are required to be established to fund reclamation costs associated with pipelines, applicable to trusts established after 2011. No impact on the tax expenditure is anticipated from these changes until 2015. See the “What’s New in the 2011 Report” section for details. ¹² Additions to earned depletion pools were eliminated as of January 1, 1990. The tax expenditure reflects use of the existing earned depletion pools. ¹³ The tax expenditure is the revenue cost of the resource allowance net of non-deductible Crown royalties and provincial mining taxes. Over a five-year period beginning in 2003, the resource allowance was phased out and a deduction for Crown royalties and mining taxes phased in, so that by 2007, this tax expenditure is eliminated. Costs for 2007 relate to companies with a tax year that ends on a date other than December 31, for which the 2007 tax year includes a portion of calendar year 2006. ¹⁴ The tax rate on resource income was reduced to the general corporate income tax rate over a five-year phase-in period beginning in 2003. Although the separate rate for resource income was eliminated as of 2007, there are still revenues in that year associated with companies having a tax year that ends on a date other than December 31, for which the 2007 tax year includes some income earned in calendar year 2006. ¹⁵ The Alberta government announced on September 21, 2006 that the Alberta Royalty Tax Credit (ARTC) program would be discontinued effective January 1, 2007. Although the ARTC no longer exists as of 2007, there are still small costs in that year associated with the related federal transitional measure for companies with off-calendar taxation years, for which the 2007 tax year includes some royalty credits earned in 2006. ¹⁶ The overall tax expenditure is negative for 2006 and subsequent years because the positive tax expenditure associated with new spending in those years is more than offset by the negative tax expenditure resulting from reclassifications that occurred in previous years. ¹⁷ For confidentiality reasons, estimates and projections are not published. ¹⁸ The amount of the tax expenditure for this measure has been adjusted for all years, reflecting improvements in data and methodology. ¹⁹ For confidentiality reasons, estimates and projections are not published. ²⁰ This item includes the additional 6 2/3% refundable tax on investment income as well as the Part I tax paid on investment income in excess of the benchmark rate.

Table 3
GST Tax Expenditures ($ millions)*
	Estimates¹				Projections¹

	2006²	2007	2008²	2009	2010	2011
Status Indians and Aboriginal Self-Governments
Non-taxation of personal property of status Indians and Indian bands on reserve	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Refunds for Aboriginal self-governments	5	5	5	5	5	5
Business
Exemption for domestic financial services	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Exemption for ferry, road and bridge tolls³	20	20	20	20	20	20
Exemption and rebate for legal aid services	25	25	20	20	25	25
Non-taxability of certain importations	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Rebate for foreign visitors⁴	70	20	–	–	–	–
Rebate for foreign conventions and tour packages⁴	–	5	10	10	10	10
Small suppliers' threshold³	185	180	155	150	160	165
Zero-rating of agricultural and fish products and purchases	S	S	S	S	S	S
Zero-rating of certain purchases made by exporters	S	S	S	S	S	S
Charities and Non-Profit Organizations
Exemption for certain supplies made by charities and non-profit organizations	810	825	740	760	785	810
Rebate for registered charities	310	295	270	260	275	290
Rebate for qualifying non-profit organizations	75	70	70	70	75	80
Education
Exemption for educational services (tuition)	520	505	445	460	475	490
Rebate for book purchases made by qualifying public institutions	30	25	25	25	25	25
Rebate for colleges	80	85	75	80	85	90
Rebate for schools	430	415	360	370	405	420
Rebate for universities	260	245	220	225	250	260
Health Care
Exemption for health care services	605	620	580	605	635	670
Rebate for hospitals	515	525	485	515	570	590
Zero-rating of medical devices	190	190	165	175	185	195
Zero-rating of prescription drugs	725	720	630	660	695	740
Households
Exemption for child care and personal services	140	135	120	130	135	145
GST/HST Credit	3,450	3,490	3,555	3,645	3,755	3,865
Zero-rating of basic groceries	3,635	3,515	3,105	3,290	3,455	3,680
Housing
Exemption for sales of used residential housing and other personal-use real property	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Exemption for residential rent (long-term)	1,305	1,300	1,165	1,200	1,240	1,275
Rebate for new housing	985	850	690	595	675	705
Rebate for new residential rental property	50	60	55	50	60	60
Municipalities
Exemption for municipal transit	165	165	150	155	160	165
Exemption for water and basic garbage collection services	240	240	220	225	235	240
Rebate for municipalities	1,810	1,805	1,745	1,890	2,080	2,160
Memorandum Items
Recognition of Expenses Incurred to Earn Income
Rebate to employees and partners	105	95	80	75	80	85
Other
Partial input tax credits for meals and entertainment expenses	155	150	130	120	120	125
* The elimination of a tax expenditure would not necessarily yield the full tax revenues shown in the table. See the publication Tax Expenditures: Notes to the Estimates/Projections 2010 for a discussion of the reasons for this. Notes: ¹ Unless otherwise indicated in the footnotes, changes in the estimates and projections from those in last year's report, as well as variations from year to year, result from new data and changes in the economic variables affecting the tax expenditures. Changes from last year's report may also reflect the availability of new data sources as well as methodological improvements, in which case the estimates and projections presented in this year's publication may not be comparable to those published in previous reports. Further details on the tax expenditures presented in this table are available in Tax Expenditures: Notes to the Estimates/Projections 2010. ² The GST rate was lowered from 7% to 6% effective July 1, 2006, and to 5% effective January 1, 2008. These rate reductions have the effect of lowering the cost of tax expenditures starting in 2006 from what they otherwise would have been. This is not true of the GST/HST Credit, however, since it was unaffected by the rate reductions. ³ The amount of the tax expenditure has been adjusted for all years, reflecting improvements in methodology. ⁴ The Visitors' Rebate Program (VRP) was replaced by the Foreign Convention and Tour Incentive Program effective April 1, 2007. Estimates for the VRP do not include amounts credited by suppliers at the point of sale.

^[1] Available on the Department of Finance website.

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