Report on Federal Tax Expenditures - Concepts, Estimates and Evaluations 2018

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Part 3 – Descriptions of Tax Expenditures: 4 of 4

Rebate for book purchases made by certain organizations
  Value
Description A 100% rebate is provided in respect of GST paid on books acquired by:
  • schools, universities, public colleges and municipalities;
  • charities and qualifying non-profit organizations that operate public lending libraries; and
  • designated charities and qualifying non-profit organizations whose primary purpose is the promotion of literacy.
The rebate is not available when the books are acquired for resale.
Tax Goods and Services Tax
Beneficiaries Schools, colleges, universities, municipalities, certain charities and certain non-profit organizations
Type of measure Rebate
Legal reference Excise Tax Act, section 259.1
Implementation and recent history
  • Introduced on October 23, 1996 (Department of Finance Canada news release 1996-076). Effective in respect of GST paid after that date.
  • Budget 2012 extended the rebate to include books acquired to be given away by designated literacy organizations.
Objective – category To achieve a social objective
Objective This measure recognizes the important role played by public libraries, educational institutions and other community organizations in helping people learn how to read and improve their reading skills (Department of Finance Canada news release 1996-076, October 23, 1996).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Education
CCOFOG 2014 code 70959 - Education - Education not definable by level
Other relevant government programs Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and Indigenous and Northern Affairs Canada also support objectives related to education and training. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with provincial government expenditures on education.
Number of beneficiaries About 2,000 entities claim this rebate each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 20 20 15 15 15 15 15 15
Rebate for hospitals, facility operators and external suppliers
  Value
Description Hospitals provide primarily tax-exempt services, and as such are unable to claim input tax credits for GST paid on most of their purchases. However, public hospitals are eligible for a rebate of 83% of the GST paid on purchases related to their supply of exempt services.
Since 2005, government-funded charities and non-profit organizations that provide health care services similar to those traditionally performed in hospitals or supply ancillary support services to hospitals and eligible health care facilities (“facility operators and external suppliers”) are also eligible for an 83% rebate of the GST paid on purchases related to their exempt health care supplies.
Tax Goods and Services Tax
Beneficiaries Public hospitals, facility operators and external suppliers
Type of measure Rebate
Legal reference Excise Tax Act,subsection 259(3)
Implementation and recent history
  • The rebate for public hospitals has been in effect since the inception of the GST in 1991.
  • Budget 2005 extended the 83% rebate to facility operators and external suppliers to accommodate the restructuring by provinces and territories of the delivery of health care services that has resulted in some services formerly provided by hospitals being performed by other non-profit organizations.
Objective – category To achieve a social objective
Objective The rebate for public hospitals was implemented at the time of inception of the GST to ensure that the sales tax burden did not increase as a result of moving to the GST from the previous federal sales tax (Goods and Services Tax: Technical Paper, August 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Health
CCOFOG 2014 code 7073 - Health - Hospital services
Other relevant government programs Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with provincial government expenditures on health.
Number of beneficiaries About 600 entities claim this rebate each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 590 635 650 695 630 665 705 725
Rebate for municipalities
  Value
Description Municipalities are eligible for a 100% rebate for the GST paid on their purchases of inputs used in the provision of their exempt supplies. Entities that are not municipalities (e.g., library boards) may nonetheless be determined by the Minister of National Revenue to be municipalities for the purposes of this rebate. Similarly, service providers may be designated to be municipalities with respect to certain municipal-like services they provide (e.g., sewage treatment services). Entities determined or designated to be municipalities are eligible for the 100% rebate in respect of GST paid on inputs used in the course of their exempt municipal activities.  
Tax Goods and Services Tax
Beneficiaries Municipalities
Type of measure Rebate
Legal reference Excise Tax Act,subsections 259(3) and (4)
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991, initially with a rebate rate of 57.14%.
  • The rebate rate was increased to 100%, generally effective since February 2004 (Department of Finance Canada news release 2004-007, February 3, 2004).
Objective – category To implement intergovernmental tax arrangements
Objective The partial rebate initially provided was intended to ensure that the sales tax burden of municipalities did not increase as a result of moving to the GST from the previous federal sales tax (Goods and Services Tax: Technical Paper, August 1989).The rebate was increased to 100% to provide municipalities with an increased source of reliable, predictable and long-term funding to address infrastructure priorities (Department of Finance Canada news release 2004-007, February 3, 2004).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Intergovernmental tax arrangements
CCOFOG 2014 code 70183 - General public services - Transfers of a general character between different levels of government - General purpose transfers to local governments
Other relevant government programs n/a
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with local government expenditures.
Number of beneficiaries About 9,500 entities claim this rebate each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 1,995 2,060 2,165 2,240 2,270 2,380 2,445 2,490
Rebate for new housing
  Value
Description Builders or purchasers of newly constructed and substantially renovated residential housing are eligible for a rebate of the GST paid if the housing is for use as a primary place of residence. For houses valued at or below $350,000, the rebate is 36% of the total GST paid to a maximum of $6,300. The rebate is gradually phased out for houses valued between $350,000 and $450,000, and there is no rebate for houses valued at $450,000 or more. The same rebate is available for the GST paid by individuals to construct or substantially renovate housing that is for use by the owner or a relative as a primary place of residence.
The rate of rebate was established so that the GST burden on new housing would be equal to the federal sales tax component of the total price of a new home before the introduction of the GST (which was approximately 4.5% on average). 
Tax Goods and Services Tax
Beneficiaries Individuals who have purchased or constructed new homes
Type of measure Rebate
Legal reference Excise Tax Act, sections 254 and 256
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
  • The maximum dollar value of the rebate was lowered in Budget 2006 and in the 2007 Economic Statement concurrently with the reductions in the GST rate from 7% to 6% on July 1, 2006 and to 5% on January 1, 2008.
Objective – category To achieve a social objective
Objective This measure is designed to ensure that the GST does not pose a barrier to the affordability of new homes (Goods and Services Tax Consolidated Explanatory Notes, April 1997).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Housing
CCOFOG 2014 code 70619 - Housing and community amenities - Housing development
Other relevant government programs Programs within the mandate of the Canada Mortgage and Housing Corporation are intended to promote the construction of new houses, the repair and modernization of existing houses and the improvement of housing and living conditions. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada. Data on expenditures on residential construction from the System of National Accounts were adjusted by Statistics Canada for conceptual differences in the timing and tax treatment of land.
Estimation method The cost of this measure is calculated from source data.
Projection method The cost of this measure is projected to grow in line with housing completions.
Number of beneficiaries No data is available.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 580 595 570 570 515 535 560 520
Rebate for new residential rental property
  Value
Description Builders or purchasers of newly constructed or substantially renovated residential rental housing are eligible for a rebate of the GST payable if it can reasonably be expected that the first use of the individual residential units within the property will be as a primary place of residence for at least one year. The rebate also applies to builders or purchasers of new additions to multiple-unit residential rental housing and to the leasing of land (i.e., housing lots) to a person that affixes a new or substantially renovated house or sites in new residential trailer parks for long-term residential use.
For single-unit residential housing (including duplexes) or units in multiple-unit residential housing valued at or below $350,000, the rebate is 36% of the total GST paid to a maximum of $6,300. The rebate is phased out for such residential housing or units valued between $350,000 and $450,000. In the case of leasing housing lots or sites in residential trailer parks, the rebate is 36% of the total GST paid to a maximum $1,575. The rebate is phased out for each housing lot or site valued between $87,500 and $112,500.
Tax Goods and Services Tax
Beneficiaries Builders and purchasers of new residential rental property and landlords that lease housing lots or sites in new residential trailer parks for long-term residential use
Type of measure Rebate
Legal reference Excise Tax Act, section 256.1
Implementation and recent history
  • Introduced in Budget 2000. Effective February 28, 2000.
  • The maximum dollar value of the rebate was lowered in Budget 2006 and in the 2007 Economic Statement concurrently with the reductions in the GST rate from 7% to 6% on July 1, 2006 and to 5% on January 1, 2008.
Objective – category To achieve a social objective
Objective This measure ensures that builders and purchasers of new residential rental property face the same effective GST rate faced by purchasers of new owner-occupied homes (Budget 2000).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Housing
CCOFOG 2014 code 70619 - Housing and community amenities - Housing development
Other relevant government programs Programs within the mandate of the Canada Mortgage and Housing Corporation are intended to promote the construction of new houses, the repair and modernization of existing houses and the improvement of housing and living conditions. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Form GST524 - GST/HST New Residential Rental Property Rebate Application
Estimation method The cost of this measure is calculated from source data.
Projection method The cost of this measure is projected to grow in line with housing completions for multiple units.
Number of beneficiaries No data is available.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 85 110 125 135 145 140 145 135
Rebate for poppies and wreaths
  Value
Description The Royal Canadian Legion is eligible for a 100% rebate of GST paid on Remembrance Day poppies and wreaths it acquires.
Tax Goods and Services Tax
Beneficiaries Royal Canadian Legion
Type of measure Rebate
Legal reference Excise Tax Act, section 259.2
Implementation and recent history
  • Introduced on October 28, 2010 (Department of Finance Canada news release 2010-101). Effective in respect of tax payable or paid after 2009.
Objective – category To achieve a social objective
Objective This measure recognizes the special status of poppies and wreaths as symbols of the contribution, courage and sacrifices of those who served in the Canadian Forces (Department of Finance Canada news release 2010-101, October 28, 2010).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Donations, gifts, charities and non-profit organizations
CCOFOG 2014 code 70869 - Recreation, culture, and religion - Recreation, culture, and religion not elsewhere classified
Other relevant government programs Many federal government entities provide direct funding to registered charities, non-profit organizations and international development associations through various programs.
Source of data Form GST189 - General Application for Rebate of GST/HST
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method n/a
Number of beneficiaries The Royal Canadian Legion is the sole direct beneficiary of this measure.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax X X X X X X X X
Rebate for qualifying non-profit organizations
  Value
Description Non-profit organizations that receive at least 40% of their funding from governments, municipalities or Indian Bands are eligible for a rebate of 50% of the GST paid on purchases related to their supplies of exempt services.
Tax Goods and Services Tax
Beneficiaries Non-profit organizations
Type of measure Rebate
Legal reference Excise Tax Act,subsection 259(3)
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To achieve a social objective
Objective This measure recognizes the important role of non-profit organizations in Canadian society (Goods and Services Tax, December 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Donations, gifts, charities and non-profit organizations
CCOFOG 2014 code 705 - Environmental protection; 706 - Housing and community amenities; 707 - Health; 708 - Recreation, culture, and religion; 709 - Education; 710 - Social protection; Other various codes
Other relevant government programs Many federal government entities provide direct funding to registered charities, non-profit organizations and international development associations through various programs.
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with nominal gross domestic product.
Number of beneficiaries About 8,000 entities claim this rebate each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 65 65 70 75 60 65 70 70
Rebate for registered charities
  Value
Description Charities registered under the Income Tax Act and registered Canadian amateur athletic associations are eligible for a rebate of 50% of the GST paid on purchases related to their supplies of exempt services. Non-profit organizations operating a facility or part thereof to provide nursing home care are also eligible for the rebate.
Tax Goods and Services Tax
Beneficiaries Registered charities, registered Canadian amateur athletic associations, non-profit organizations operating a facility or part thereof to provide nursing home care
Type of measure Rebate
Legal reference Excise Tax Act,subsection 259(3)
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To achieve a social objective
Objective This measure recognizes the important role of charities in Canadian society (Goods and Services Tax, December 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Donations, gifts, charities and non-profit organizations
CCOFOG 2014 code 705 - Environmental protection; 706 - Housing and community amenities; 707 - Health; 708 - Recreation, culture, and religion; 709 - Education; 710 - Social protection; Other various codes
Other relevant government programs Many federal government entities provide direct funding to registered charities, non-profit organizations and international development associations through various programs.
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with nominal gross domestic product.
Number of beneficiaries About 50,000 entities claim this rebate each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 290 290 305 320 295 310 325 335
Rebate for schools, colleges and universities
  Value
Description Schools, colleges and universities provide primarily tax-exempt services, and as such are unable to claim input tax credits for GST paid on most of their purchases. However, elementary and secondary schools operating on a not-for-profit basis are eligible for a rebate of 68% of the GST paid on purchases related to their supplies of exempt services. Publicly funded colleges and recognized degree-granting universities operating on a not-for-profit basis are eligible for a rebate of 67% of the GST paid on purchases related to their supplies of exempt services.
Tax Goods and Services Tax
Beneficiaries Schools, colleges and universities
Type of measure Rebate
Legal reference Excise Tax Act,subsection 259(3)
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To achieve a social objective
Objective This measure was implemented at the time of inception of the GST to ensure that the sales tax burden on these sectors did not increase as a result of moving to the GST from the previous federal sales tax (Goods and Services Tax: Technical Paper, August 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Education
CCOFOG 2014 code 70929 - Education - Primary and Secondary education
70939 - Education - College education
70949 - Education - University education
Other relevant government programs Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and Indigenous and Northern Affairs Canada also support objectives related to education and training. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with provincial government expenditures on education.
Number of beneficiaries About 4,500 entities claim this rebate each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Rebate for schools 380 385 400 400 415 440 470 480
Rebate for colleges 85 80 80 85 90 95 105 105
Rebate for universities 235 230 230 235 235 250 265 270
Total – Goods and Services Tax 700 700 710 725 745 785 840 855
Rebate for specially equipped motor vehicles
  Value
Description A GST rebate is available in respect of motor vehicles specially equipped with certain features for use by individuals with disabilities. The amount of the rebate is the GST paid on the portion of the purchase price attributable to the special features. The rebate is available in respect of both new and used vehicles, and in respect of vehicles purchased either in Canada or abroad (with the GST being paid on importation). The rebate is also available when a vehicle is imported after being modified with special features.
Tax Goods and Services Tax
Beneficiaries Individuals with disabilities, organizations serving these individuals and caregivers
Type of measure Rebate
Legal reference Excise Tax Act,sections 258.1 and 258.2
Implementation and recent history
  • Introduced on April 3, 1998 (Department of Finance Canada news release 1998-036). Effective in respect of new vehicles paid for after April 3, 1998.
  • An amendment to extend the relief to used vehicles was announced on November 27, 2006 (Department of Finance Canada news release 2006-073), effective retrospectively to vehicles paid for after April 3, 1998.
Objective – category To achieve a social objective
Objective This measure ensures that all individuals and organizations get tax relief on the additional cost of purchasing vehicles, such as a car or minivan, that meet their special needs (Department of Finance Canada news release 1998-036, April 3, 1998).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Health
CCOFOG 2014 code 70713 - Health - Medical products, appliances, and equipment - Therapeutic appliances and equipment
Other relevant government programs Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Form GST518 - GST/HST Specially Equipped Motor Vehicle Rebate Application
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with consumption expenditures on vehicles and parts.
Number of beneficiaries No data is available.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax S S S S S S S S
Rebate to employees and partners
  Value
Description Employees and partners may incur expenses in the course of carrying out their duties that are not directly reimbursed by their employers and partnerships. Instead, compensation may be provided through salaries, commissions, profits and other means that would not be subject to GST. Consequently, employers and partnerships cannot recover the GST paid by the employees and partners through the input tax credit mechanism.
A rebate is available to an employee of a GST registrant (other than a listed financial institution) for the GST paid on those expenses that are deductible in computing the employee’s income from employment for income tax purposes. For example, an employee is allowed to claim a rebate in respect of the GST on a portion of entertainment expenses or on the capital cost allowance for an automobile, aircraft or musical instrument that is used in his or her employment and on which GST is payable.
This rebate is also available to an individual who is a member of a GST-registered partnership in respect of expenses incurred outside the partnership that are deducted in computing the member’s income from the partnership for income tax purposes.
Tax Goods and Services Tax
Beneficiaries Employees and partners
Type of measure Rebate
Legal reference Excise Tax Act, section 253
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To provide relief for special circumstances
Objective This measure is designed to reduce the possible tax-cascading effect that would occur in certain cases when employers and partnerships cannot recover GST paid by employees and partners in the course of their duties.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system GST rebates effectively reduce the value added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Employment
Business - other
CCOFOG 2014 code 70412 - Economic affairs - General economic, commercial, and labor affairs - General labor affairs
70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support employment. Programs within the mandates of Global Affairs Canada, Public Services and Procurement Canada, and the regional development agencies (among other federal organizations) also offer support to Canadian businesses in various manners. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Form GST370 - Employee and Partner GST/HST Rebate Application
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with nominal gross domestic product.
Number of beneficiaries No data is available.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 65 65 60 55 55 60 65 65
Reclassification of expenses under flow-through shares
  Value
Description Small corporations in the oil and gas sector were entitled to reclassify as Canadian Exploration Expenses (CEE) the first $1 million per year of eligible Canadian Development Expenses (CDE) renounced to shareholders under a flow-through share agreement. CEE is fully deductible in the year incurred, while CDE is deductible at the rate of 30% per year. For background information, see the related item “Flow-through share deductions”. Budget 2017 announced the elimination of this measure.
Tax Personal and corporate income tax
Beneficiaries Investors in flow-through shares and small oil and gas corporations
Type of measure Timing preference
Legal reference Income Tax Act, subsection 66(12.601)
Implementation and recent history
  • Introduced in the 1992 Economic and Fiscal Statement. Effective after December 2, 1992.
  • Budget 1996 reduced the amount of CDE that can be reclassified to $1 million per year from $2 million and restricted the reclassification to firms with less than $15 million of taxable capital employed in Canada.
  • Budget 2017 announced the elimination of this tax expenditure. This will generally apply to expenses incurred after 2018.
Objective – category To encourage or attract investment
Objective This measure was introduced to facilitate financing and promote investment in the junior oil and gas sector (Economic and Fiscal Statement, 1992; Budget 1996).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure may permit the depreciation of a capital asset faster than its useful life.
Subject Business - natural resources
CCOFOG 2014 code 70432 - Economic affairs - Fuel and energy - Petroleum and natural gas
Other relevant government programs Programs within the mandate of Natural Resources Canada also support the natural resource sector. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
T2 Corporation Income Tax Return
Estimation method The value of this tax expenditure is estimated by comparing the tax benefits received by the shareholders to the tax benefits that would have been received if the CDE had been flowed out as CDE rather than CEE. It is assumed that the issuing corporations would have been able to fully flow out the expenses as CDE, even though CDE is generally less attractive to investors than CEE. To the extent that they could not, the tax expenditure would be higher than this estimate.
Projection method Projections based on current market conditions.
Number of beneficiaries Information on the number of beneficiaries is not available. About 15 corporations reclassified expenses under this provision in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax -10 -10 -5 -5 -3 -2 -2 -3
Corporate income tax -2 -1 -1 -1 S S S S
Total -10 -10 -10 -5 -3 -2 -2 -3
Refundable capital gains tax for investment and mutual fund corporations
  Value
Description Capital gains realized by an investment corporation or a mutual fund corporation are taxed at the corporation level, and the tax is accumulated in an account known as the “refundable capital gains tax on hand” account. The tax accumulated in that account is refunded to the corporation upon distribution of its capital gains to its shareholders or when a mutual fund corporation redeems shares. These distributions are taxed as capital gains in the hands of the shareholder and not as dividends. This departs from general practice in that income earned by a public corporation (including taxable capital gains) does not generally retain its character for tax purposes when subsequently distributed to shareholders.
Tax Corporate income tax
Beneficiaries Investment and mutual fund corporations
Type of measure Other
Legal reference Income Tax Act, subsections 131(2) and (6)
Implementation and recent history
  • Introduced as part of the 1971 Tax Reform to enable investment corporations and mutual fund corporations that realize capital gains to flow them out to shareholders in a subsequent distribution.
Objective – category To prevent double taxation
Objective This measure permits capital gains earned by investors through investment corporations and mutual fund corporations to be taxed on a similar basis as capital gains earned directly by investors.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system This measure is considered part of the benchmark tax system, and therefore is not a tax expenditure.
Subject Savings and investment
CCOFOG 2014 code n/a
Other relevant government programs n/a
Source of data T2 Corporation Income Tax Return
Estimation method The value of this measure is the sum of the amounts of federal capital gains refunds claimed by investment and mutual fund corporations.
Projection method Projections for this measure are derived under the assumption that capital gains refunds will increase at the same rate as the average of corporate taxable income and/or taxable capital gains.
Number of beneficiaries About 70 investment and mutual fund corporations claimed a capital gain refund in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Corporate income tax 105 220 535 960 850 815 845 880
Refundable Medical Expense Supplement
  Value
Description The Refundable Medical Expense Supplement is a refundable credit that provides low-income working Canadians with assistance for medical and disability-related expenses. For 2017, the supplement is available to individuals whose earnings from employment or self-employment meet or exceed a minimum threshold of $3,514. To be eligible for the supplement, individuals must be 18 years of age or older and have claimed eligible medical expenses under the Medical Expense Tax Credit or the disability supports deduction. The supplement is equal to 25% of the allowable portion of expenses that can be claimed under the Medical Expense Tax Credit and the disability supports deduction, up to a maximum credit of $1,203 for 2017. The supplement is reduced by 5% of net family income above an income threshold of $26,644. The maximum supplement amount, the minimum earnings threshold and the family net income threshold are indexed to inflation.
Tax Personal income tax
Beneficiaries Low-income employees and self-employed individuals
Type of measure Credit, refundable
Legal reference Income Tax Act, section 122.51
Implementation and recent history
  • Introduced in Budget 1997. Effective for the 1997 and subsequent taxation years.
  • The maximum supplement amount was increased to $750 in Budget 2005 (from $562 in 2004) and to $1,000 in Budget 2006.
Objective – category To encourage employment
Objective This measure improves work incentives for Canadians with disabilities by helping to offset the loss of coverage for medical and disability-related expenses when individuals move from social assistance to the paid labour force (Budget 2006).
Category Refundable tax credit
Reason why this measure is not part of benchmark tax system This measure is classified as a transfer payment for government accounting purposes, and therefore is not considered to be a tax expenditure.
Subject Employment
Health
CCOFOG 2014 code 7071 - Health - Medical products, appliances, and equipment
7072 - Health - Outpatient services
7073 - Health - Hospital services
71012 - Social protection - Sickness and disability - Disability
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support employment. Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 544,000 individuals received this benefit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 140 140 145 150 155 160 165 170
Refundable taxes on investment income of private corporations
  Value
Description An individual could defer personal income tax on investment income if the individual earned the investment income through a private corporation that is subject to a corporate income tax rate that is significantly lower than the highest personal income tax rate. Consequently, the Income Tax Act provides rules that counter such a deferral:
  • Under Part I of the Income Tax Act, investment income (other than taxable dividends) received by a Canadian-controlled private corporation is subject to a partly refundable 38⅔% income tax rate (an unreduced 28% general tax rate plus an additional tax of 10⅔%). The refundable portion corresponds to 30⅔% of the investment income. 
  • Under Part IV of the Act, taxable dividends received by a private corporation are generally subject to a 38⅓% income tax rate.  
The refundable portion of the Part I tax and the full amount of the Part IV tax are added to the corporation’s Refundable Dividend Tax on Hand (RDTOH) account. Amounts in this account are refundable to the corporation upon the payment of taxable dividends, at the effective rate of 38⅓% of taxable dividends paid.
Tax Corporate income tax
Beneficiaries Private corporations
Type of measure Other
Legal reference Income Tax Act, sections 123, 123.3, 123.4, 124, 129 and 186
Implementation and recent history
  • Introduced as part of the 1971 Tax Reform. The Part I tax was 50% and the refundable portion of that tax was 25%. The Part IV tax was introduced at a rate of 33⅓% and was fully refundable. The refundable tax paid on investment income was refundable at a basic rate of one dollar for every three dollars of taxable dividends paid.
  • Amended as part of the 1987 Tax Reform, effective after 1987, to reflect changes in federal tax rates. The Part I tax was reduced to 28% from 36%, and its refundable portion to 20%. The Part IV tax was reduced to 25%. The rate of refund was decreased to one dollar for every four dollars of taxable dividends paid.
  • Budgets 1994 and 1995 increased the rate of the Part IV tax to 33⅓% to further reduce personal income tax deferral possibilities. The rate of refund was increased to one dollar for every three dollars of taxable dividends paid. These changes were generally effective for taxation years beginning after June 1995.
  • Budget 1995 introduced an additional refundable 6⅔% Part I tax on investment income earned by Canadian-controlled private corporations.
  • These refundable taxes (and the related refund rate) were increased to their current levels effective January 1, 2016, in order to reflect the new 33% top personal income tax rate applicable as of that date.
  • In July 2017, the Government launched consultations on proposals to limit tax planning strategies using private corporations. The 2017 Fall Economic Statement announced that the Government will move forward with measures to limit tax deferral opportunities related to investment income earned through private corporations, with further details to be announced in Budget 2018.
Objective – category To ensure a neutral tax treatment across similar situations
Objective This measure is intended to reduce the possibility for individuals to defer personal income tax on investment income by earning such income through a private corporation instead of earning such income directly (Budget 1995).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system This measure is considered part of the benchmark tax system, and therefore is not a tax expenditure.
Subject Other
CCOFOG 2014 code n/a
Other relevant government programs n/a
Source of data T2 Corporation Income Tax Return
Estimation method The tax expenditure is comprised of the additional Part I tax (the difference between the applicable Part I tax rate and the federal general corporate income tax rate of 15%), the Part IV tax and the sum of the aforementioned refunds. In these accounts, tax revenues are recorded as negative amounts.
Projection method The cost of this measure is projected to grow in line with investment income and taxable income.
Number of beneficiaries About 255,000 and 209,000 corporations were respectively subject to the additional Part I tax and Part IV tax in 2015, while 245,000 corporations claimed the dividend refund in that year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Additional Part I tax -2,765 -3,250 -3,730 -4,275 -5,180 -5,480 -5,915 -6,310
Part IV tax -3,470 -3,885 -4,265 -4,860 -5,180 -5,620 -6,065 -6,470
Dividend refund 6,280 7,140 7,265 8,780 8,865 9,530 10,290 10,975
Total – corporate income tax 45 5 -735 -355 -1,500 -1,570 -1,695 -1,805
Refunds for aboriginal self-governments
  Value
Description Under agreements which are given force of law by Parliament, aboriginal self-governments are provided with a 100% refund of the GST for goods and services acquired for use in governmental activities.
Tax Goods and Services Tax
Beneficiaries Aboriginal self-governments, their corporations and entities performing functions of government 
Type of measure Refund
Legal reference The agreements are given force of law by the implementation legislation related to Self-Government Agreements and Comprehensive Land Claims and Self-Government Agreements.
Implementation and recent history
  • The refund first became available in the late 1990s in Self-Government Agreements signed with certain Yukon First Nations.
  • To date, 18 combined Comprehensive Land Claims and Self-Government Agreements have been concluded (in the Yukon, British Columbia, the Northwest Territories and Newfoundland and Labrador) and several other aboriginal groups, mainly in British Columbia, Saskatchewan, Quebec and the Northwest Territories, are at the final agreement stage.
Objective – category To implement intergovernmental tax arrangements
Objective This measure relieves from GST the expenditures incurred by aboriginal self-governments in exercising governmental activities.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system GST refunds effectively reduce the value-added subject to tax, and are therefore deviations from a broadly defined value-added tax base.
Subject Intergovernmental tax arrangements
CCOFOG 2014 code 7018 - General public services - Transfers of a general character between different levels of government
Other relevant government programs n/a
Source of data Form GST66 - Application for GST/HST Public Service Bodies’ Rebate and GST Self-Government Refund
Estimation method The cost of this measure corresponds to the amounts of rebates approved, as reported in administrative data.
Projection method The cost of this measure is projected to grow in line with government expenditures and expected ratification of new Self-Government Agreements and Comprehensive Land Claims and Self-Government Agreements.
Number of beneficiaries About 30 entities claim these refunds each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 5 5 5 10 5 5 5 5
Registered Disability Savings Plans
  Value
Description A Registered Disability Savings Plan (RDSP) is a tax-assisted long-term savings plan that may generally be established for the benefit of an individual under 60 years of age who is eligible for the Disability Tax Credit. Contributions to an RDSP are not deductible from income, and therefore are also not included in income for tax purposes when paid out of an RDSP. Canada Disability Savings Grants (CDSGs) and Canada Disability Savings Bonds (CDSBs) are not taxed when they are paid into an RDSP and investment income earned in the plan is not taxed as it accrues. CDSGs, CDSBs and investment income earned in the plan are included in the beneficiary’s income for tax purposes when paid out of an RDSP.
Contributions to an RDSP are limited to a lifetime maximum of $200,000, and are permitted up until the end of the year in which a beneficiary attains 59 years of age. Up to $70,000 in matching CDSGs and up to $20,000 in CDSBs may be provided to a beneficiary over their lifetime, up until the end of the year in which the beneficiary attains 49 years of age. While the CDSGs and CDSBs are not tax expenditures, they increase the cost of the tax expenditure to the extent that they encourage increased use of RDSPs.
Tax Personal income tax
Beneficiaries Individuals with disabilities
Type of measure Timing preference
Legal reference Income Tax Act, sections 146.4 and 205
Canada Disability Savings Act and Canada Disability Savings Regulations
Implementation and recent history
  • Introduced in Budget 2007. Effective for the 2008 and subsequent taxation years.
Objective – category To encourage savings
Objective This measure helps individuals with severe disabilities and their families save for their long-term financial security (Budget 2014).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Health
Savings and investment
CCOFOG 2014 code 71012 - Social protection - Sickness and disability - Disability
Other relevant government programs Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Employment and Social Development Canada
Estimation method The value of this tax expenditure is calculated as the tax revenue forgone from the non-taxation of investment income earned on RDSP assets as well as from the non-taxation of CDSBs and CDSGs when deposited in an RDSP, minus the taxes paid on RDSP withdrawals. These amounts are determined using assumed marginal tax rates for plan contributors and beneficiaries. The tax-sheltered investment income is estimated based on the assumption that the rate of return on net RDSP assets is equal to the rate of return on Government of Canada bonds.
Projection method Projections for this measure are based on projected RDSP net assets and withdrawals produced by Employment and Social Development Canada. Future bond yields are projected by taking a five-year average of historical yields.
Number of beneficiaries About 160,000 RDSPs were registered from December 2008 to October 2017.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 2017 (P) 2018 (P) 2019 (P)
Personal income tax 25 30 35 40 50 60 70 85
Registered Education Savings Plans
  Value
Description A Registered Education Savings Plan (RESP) is a tax-assisted savings vehicle designed to help families accumulate savings for the post-secondary education of their children. Contributions to an RESP are not deductible for income tax purposes and as such are not taxed upon withdrawal, while the investment income accruing in the plan is not subject to tax until withdrawal.
An individual can contribute to an RESP on behalf of a designated beneficiary. For each beneficiary of an RESP, there is a lifetime contribution limit of $50,000, but no annual limit on contributions. Contributions to an RESP may attract additional government assistance through the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB), both of which are generally included in the income of the plan’s beneficiary on withdrawal. While the CESG and CLB are not tax expenditures, they increase the tax expenditure associated with RESPs to the extent that they encourage the use of RESPs, are not taxable until withdrawn and generate investment income on which tax can be deferred.
Tax Personal income tax
Beneficiaries Individuals who subscribe under an RESP
Type of measure Timing preference
Legal reference Income Tax Act, section 146.1
Canada Education Savings Act and Canada Education Savings Regulations
Implementation and recent history
  • Introduced in 1973 (Department of Finance Canada news release 1973-97). Effective for the 1972 and subsequent taxation years.
  • Budget 1998 introduced the CESG, equal generally to 20% of annual contributions made after 1997 to an RESP for beneficiaries up to and including age 17.
  • Budget 2004 introduced the CLB and enhanced the CESG.
  • Budget 2007 eliminated the $4,000 limit on annual contributions and increased the maximum CESG annual amount to $500 from $400 (to $1,000 from $800 if there is unused grant room). The lifetime RESP contribution limit was raised to $50,000 from $42,000.
  • Budget 2008 raised the number of years that contributions can be made to an RESP (to 31 years from 21 years) and the number of years before an RESP must be terminated (to 35 years from 25 years).
Objective – category To encourage savings
Objective This measure broadens access to higher education by encouraging Canadians to save towards the post-secondary education of children (Budget 1998).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Education
Savings and investment
CCOFOG 2014 code 70939 - Education - College education
70949 - Education - University education
Other relevant government programs Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and Indigenous and Northern Affairs Canada also support objectives related to education and training. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Employment and Social Development Canada
Estimation method The value of this tax expenditure is calculated as the tax revenue forgone from the non-taxation of investment income earned on RESP assets, minus the taxes paid on RESP withdrawals. These amounts are determined using assumed marginal tax rates for plan contributors and beneficiaries. The tax-sheltered investment income is estimated assuming that the rate of return on net RESP assets is equal to the rate of return on Government of Canada bonds.
Projection method The projection for the first year is based on projected RESP net assets and withdrawals produced by Employment and Social Development Canada, while projections for outer years are made based on historical growth. Future Government of Canada bond yields are projected by using a five-year average of historical yields adjusted by the average private sector forecast of the 10-year government bond rate.
Number of beneficiaries No data on the total number of individuals with an RESP is available. About 5.4 million individuals with an RESP have received a Canada Education Savings Grant between 1998 and 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 160 170 155 145 130 115 130 160
Registered Pension Plans
  Value
Description A deferral of tax is provided on contributions to Registered Pension Plans (RPPs) in order to encourage and assist Canadians to save for retirement. Contributions to these plans are deductible from income, the investment income is not taxed as it accrues in the plan, and withdrawals are included in income for tax purposes. For defined contribution RPP members, contributions are limited to 18% of employment earnings up to a specified dollar amount ($26,230 for 2017). For defined benefit RPP members, pension benefits are limited to 2% of employment earnings per year of service up to a specified dollar amount ($2,914 for 2017).
Tax Personal income tax
Beneficiaries Employees with a registered pension plan
Type of measure Timing preference
Legal reference Income Tax Act, sections 147.1 to 147.4
Implementation and recent history
  • Employer RPP contributions became deductible with the introduction of income tax in 1917. Employee RPP contributions became deductible in 1919.
  • A major reform of the RPP and Registered Retirement Savings Plan limits was introduced in 1990 in order to provide more comparable tax-assisted savings opportunities for Canadians regardless of whether they saved in a defined benefit RPP, a defined contribution RPP or a Registered Retirement Savings Plan.
  • The maximum dollar contribution and benefit limits for RPPs were increased in 2003 and 2005.
  • The RPP dollar limits were indexed to average wage growth for 2010 and subsequent years. 
Objective – category To encourage savings
Objective By allowing taxpayers to defer tax on savings, this measure encourages and assists Canadians to arrange for their financial security in later years (Pension Reform: Improvements in Tax Assistance for Retirement Saving, Department of Finance Canada, 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Retirement
Savings and investment
CCOFOG 2014 code 71029 - Social protection - Old age
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support retirement income security. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Registered pension plans, Trusteed pension funds and Pension satellite account (CANSIM tables 280-0026, 280-0004 and 378-0117)
Estimation method The value of this tax expenditure is calculated on a cash-flow basis as the sum of forgone tax revenue from the deductibility of RPP contributions and non-taxation of investment income earned on RPP assets, minus the tax revenue from RPP benefit payments.
Projection method Projections are derived using T1 micro-simulation model and data from Statistics Canada on historical RPP assets.
Number of beneficiaries About 7.9 million households had individuals that had accrued benefits under RPPs in 2016.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Deduction for contributions 13,520 14,190 15,195 15,115 15,355 15,915 16,525 17,020
Non-taxation of investment income 13,780 15,875 19,475 19,600 20,615 22,845 24,335 25,795
Taxation of withdrawals -8,390 -9,225 -9,750 -10,615 -10,700 -11,285 -12,060 -12,845
Total – personal income tax 18,910 20,840 24,920 24,100 25,270 27,475 28,800 29,970
Registered Retirement Savings Plans
  Value
Description A deferral of tax is provided on contributions to Registered Retirement Savings Plans (RRSPs) in order to encourage and assist Canadians to save for retirement. Contributions to these plans are deductible from income, the investment income is not taxed as it accrues in the plan, and withdrawals are included in income for tax purposes. Contribution limits are determined as 18% of prior year earned income up to a specified dollar limit ($26,010 for 2017), less an estimate of contributions made to a Registered Pension Plan and/or a Deferred Profit-Sharing Plan, plus unused contribution room carried forward from previous years. Earned income for this purpose includes income from employment and self-employment as well as other specified types of earnings. Tax-free withdrawals from RRSPs are permitted under the Home Buyers' Plan and the Lifelong Learning Plan to promote home ownership and skills enhancement respectively, subject to specified eligibility conditions, withdrawal limits and repayment provisions.
Tax Personal income tax
Beneficiaries Individuals with earned income
Type of measure Timing preference
Legal reference Income Tax Act, section 146
Implementation and recent history
  • Introduced in 1957.
  • A major reform of the RRSP and Registered Pension Plan limits was introduced in 1990 in order to provide more comparable tax-assisted savings opportunities for Canadians regardless of whether they saved in a defined benefit Registered Pension Plan, a defined contribution Registered Pension Plan or an RRSP.
  • The maximum dollar contribution limit for RRSPs was increased in 2003 and 2005.
  • The RRSP dollar limit was indexed to average wage growth for 2011 and subsequent years. 
Objective – category To encourage savings
Objective By allowing taxpayers to defer tax on savings, this measure encourages and assists Canadians to arrange for their financial security in later years (Pension Reform: Improvements in Tax Assistance for Retirement Saving, Department of Finance Canada, 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Retirement Savings and investment
CCOFOG 2014 code 71029 - Social protection - Old age
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support retirement income security. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Pension satellite account (CANSIM table 378-0117)
Estimation method The value of this tax expenditure is calculated on a cash-flow basis as the sum of forgone tax revenue from the deductibility of RRSP contributions and non-taxation of investment income earned on RRSP assets, minus the tax revenue from Registered Retirement Income Fund/annuity income and RRSP withdrawals.
Projection method Projections are derived using the T1 micro-simulation model and Statistics Canada data on historical RRSP assets.
Number of beneficiaries About 8.9 million households had individuals that had RRSPs or Registered Retirement Income Funds in 2016.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Deduction for contributions 7,690 8,045 8,220 8,495 8,525 8,605 8,705 8,780
Non-taxation of investment income 10,015 11,310 13,910 13,610 13,755 15,010 15,985 17,020
Taxation of withdrawals -5,380 -5,660 -6,180 -6,810 -6,435 -6,800 -7,195 -7,530
Total – personal income tax 12,325 13,695 15,950 15,295 15,845 16,815 17,495 18,270

Note: The cost information includes the tax expenditures associated with Pooled Registered Pension Plans and the Saskatchewan Pension Plan.

Rollovers of investments in small businesses
  Value
Description Individuals are permitted to defer the tax on a capital gain arising from the disposition of shares in a qualified small business investment, to the extent the proceeds are reinvested in shares of another qualified small business. An eligible small business investment consists of shares issued from treasury in an active Canadian-controlled private corporation with assets not exceeding $50 million, excluding professional corporations, specified financial institutions, rental or leasing corporations, and real estate corporations. The reinvestment must be made at any time in the year of disposition or within 120 days after the end of that year.
Tax Personal income tax
Beneficiaries Individual investors
Type of measure Timing preference
Legal reference Income Tax Act, section 44.1
Implementation and recent history
  • Introduced in Budget 2000. Effective for dispositions after February 27, 2000.
  • The October 2000 Economic Statement and Budget Update increased the size of an eligible investment from $500,000 to $2 million and the size of business eligible for the rollover from $10 million to $50 million.
  • Budget 2003 eliminated the individual investor limits on the amount of the original investment and reinvestment eligible for the deferral and allowed a reinvestment to be eligible for the rollover when made at any time in the year of disposition or within 120 days after the end of the year.
Objective – category To encourage or attract investment
Objective This measure was implemented to improve access to capital for small business corporations (Economic Statement and Budget Update, October 2000; Budget 2003).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Business - small businesses
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs Programs within the mandate of Innovation, Science and Economic Development Canada also support small businesses. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 800 individuals reported capital gains eligible for this measure in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax X 5 5 X 35 10 10 10
Saskatchewan Pension Plan
  Value
Description A deferral of tax is provided on contributions to the Saskatchewan Pension Plan (SPP) in order to encourage and assist Canadians to save for retirement. Contributions to the SPP are deductible from income, the investment income is not taxed as it accrues in the plan, and withdrawals and benefit payments are included in income for tax purposes. SPP contributions must be made within an SPP member’s available Registered Retirement Savings Plan (RRSP) contribution limit (the SPP limits annual contributions to a maximum of $2,500).
Tax Personal income tax
Beneficiaries Individuals with available RRSP contribution room
Type of measure Timing preference
Legal reference Income Tax Act, subsections 146(21) to (21.3)
Income Tax Regulations, section 7800
Implementation and recent history
  • The SPP was introduced in 1986. Deductible contributions were initially limited to $600 annually, if made within an SPP member’s available RRSP contribution limit.
  • In 2011, the federal tax rules were amended to accommodate certain changes proposed by the Saskatchewan government to improve the plan, in particular an increase in the annual contribution limit to $2,500 (Department of Finance Canada news release 2010-118, December 7, 2010).
Objective – category To encourage savings
Objective This measure was introduced to ensure consistency in the tax treatment of Canadians saving for their retirement, whether they save through a private or a provincially sponsored registered plan (Budget 1987).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Retirement
Savings and investment
CCOFOG 2014 code 71029 - Social protection - Old age
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support retirement income security. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data n/a
Estimation method n/a
Projection method n/a
Number of beneficiaries About 12,300 individuals contributed to the Saskatchewan Pension Plan in 2016.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Note: The tax expenditure associated with this measure is combined with the tax expenditure associated with Registered Retirement Savings Plans (see measure “Registered Retirement Savings Plans”).

Scientific Research and Experimental Development Investment Tax Credit
  Value
Description A credit is available in respect of eligible expenditures on scientific research and experimental development (SR&ED) performed by businesses in Canada. SR&ED involves the systematic investigation or search carried out in a field of science or technology by means of experiment or analysis, and eligible SR&ED activities cover basic research and applied research as well as experimental development. Expenditures eligible for the credit include most current expenditures in respect of SR&ED performed by or on behalf of a taxpayer and that are related to a business of the taxpayer, including salary and wages, materials, overhead and contracts.
The credit is provided at a general rate of 15%. An enhanced rate of 35% is provided to small Canadian-controlled private corporations (CCPCs) on their first $3 million per year of eligible expenditures. Small CCPCs that have prior-year taxable income of $500,000 or less and prior-year taxable capital of $10 million or less can obtain a refund in respect of credits earned in a year but not used, at a rate of 100% on the first $3 million of current expenses and 40% on current expenses above that limit. The $3 million expenditure limit is gradually reduced if prior-year taxable income is between $500,000 and $800,000 or if prior-year taxable capital is between $10 million and $50 million. CCPCs within these ranges qualify for the refund up to the value of the reduced expenditure limit. Unused credits that are not refunded can be carried forward 20 years and back 3 years to reduce taxes payable in those years. Unincorporated businesses are not eligible for the enhanced 35% credit rate, but are generally eligible for the 40% refund.
An immediate income tax deduction is also provided in respect of eligible SR&ED expenditures (see the measure “Expensing of current expenditures on scientific research and experimental development”).
Tax Personal and corporate income tax
Beneficiaries Businesses conducting eligible scientific research and experimental development
Type of measure Credit, refundable and non-refundable
Legal reference Income Tax Act, section 127
Implementation and recent history
  • Federal tax incentives for SR&ED were first introduced in 1948. The basic structure of the current credit system was put in place between 1983 and 1985.
  • Several changes were introduced in Budget 2012, including: the reduction of the general credit rate to 15% from 20% and the removal of capital expenditures from the base of expenditures eligible for the credit (both changes effective January 1, 2014); the reduction in the prescribed proxy amount in respect of overhead expenses from 65% of the salaries and wages of employees directly engaged in the conduct of SR&ED to 60% in 2013 and 55% in subsequent years; and the removal of the profit element for arm’s length third-party contracts (effective January 1, 2013).
Objective – category To encourage or attract investment
Objective This measure is intended to encourage the performance of scientific research and experimental development in Canada by the private sector and to assist small businesses to perform scientific research and experimental development (Budget 1996). The rationale for this tax support is that the benefits of SR&ED extend beyond the performers themselves to other firms and sectors of the economy. The existence of these spillovers of externalities means that, in the absence of government support, firms would perform less SR&ED than desirable for the economy.
Category Non-structural tax measure and refundable tax credit
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system.
The tax benefit from this measure can be obtained in a taxation year other than the year during which it accrues.
The portion of this measure that is refundable is classified as a transfer payment for government accounting purposes, and therefore is not considered to be a tax expenditure.
Subject Business - research and development
CCOFOG 2014 code 7048 - Economic affairs - R&D Economic affairs
Other relevant government programs Programs within the mandates of Innovation, Science and Economic Development Canada, the National Research Council Canada and the federal granting councils also support research and development. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Personal income tax: T1 Income Tax and Benefit Return
Corporate income tax: T2 Corporation Income Tax Return
Estimation method The cost of this measure is based on data on actual credits claimed. Estimates for the personal income tax for 2010 to 2013 include investment tax credits claimed in respect of certain other certified property under a provision that is now repealed. These credits cannot be separated from SR&ED investment tax credits, but are likely negligible.
Projection method Personal income tax: The cost of this measure is projected based on historical growth.
Corporate income tax: The cost of this measure is projected to grow in line with nominal gross domestic product.
Number of beneficiaries About 3,700 individuals and 21,200 corporations claimed this credit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 4 4 4 4 4 4 4 4
Corporate income tax                
  Non-refundable portion                
    Earned and claimed in current year 785 720 515 410 450 475 495 515
    Claimed in current year but earned in prior years 1,015 1,015 785 905 875 925 960 995
    Earned in current year but carried back to prior years 65 165 40 35 90 65 70 70
    Total – non-refundable portion 1,860 1,900 1,340 1,350 1,415 1,465 1,525 1,580
  Refundable portion 1,455 1,340 1,275 1,290 1,260 1,360 1,395 1,455
  Total – corporate income tax 3,315 3,240 2,620 2,640 2,675 2,825 2,925 3,030
Total 3,320 3,245 2,625 2,640 2,680 2,830 2,925 3,035
Search and Rescue Volunteers Tax Credit
  Value
Description Individuals who performed at least 200 hours of eligible ground, air and marine search and rescue volunteer services during a year can claim the non-refundable Search and Rescue Volunteers Tax Credit. The value of the credit is calculated by applying the lowest personal income tax rate to a credit amount of $3,000. An individual who performs both eligible volunteer search and rescue services and eligible volunteer firefighting services for a total of at least 200 hours in the year can claim either the Search and Rescue Volunteers Tax Credit or the Volunteer Firefighters Tax Credit. An individual who claims the Search and Rescue Volunteers Tax Credit is ineligible for the exemption from income that would otherwise apply to up to $1,000 of income (honoraria) received in the year for being a search and rescue volunteer (see the measure “Tax-free amount for emergency services volunteers”).
Tax Personal income tax
Beneficiaries Search and rescue volunteers
Type of measure Credit, non-refundable
Legal reference Income Tax Act, section 118.07
Implementation and recent history
  • Introduced in Budget 2014. Effective for the 2014 and subsequent taxation years.
Objective – category To achieve a social objective
Objective This measure recognizes the important role played by search and rescue volunteers in contributing to the security and safety of Canadians (Budget 2014).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system.
Subject Social
CCOFOG 2014 code 70369 - Public order and safety - Public order and safety not elsewhere classified
Other relevant government programs Programs within the mandates of Canadian Heritage, Immigration, Refugees and Citizenship Canada, Transport Canada and Public Safety Canada (among other departments) also support various other social objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 4,600 individuals claimed this credit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 2 2 2 2 2 2
Small suppliers’ threshold
  Value
Description Small suppliers (other than taxi businesses, which include ride-sharing providers) are not required to register for GST purposes. Small suppliers who choose not to register do not have to charge and remit GST on taxable supplies (other than sales of real property and, in the case of municipalities, of capital property) and they are not entitled to input tax credits.
A “small supplier” is a person whose total taxable supplies in the preceding year do not exceed $30,000 ($50,000 in the case of public service bodies). A charity or public institution (i.e., a registered charity that is a university, a public college, a school authority, a hospital authority or a designated municipality) can also qualify as a small supplier if its gross annual revenue in either of its previous two fiscal years does not exceed $250,000.
Tax Goods and Services Tax
Beneficiaries Small businesses, charities and public institutions
Type of measure Other
Legal reference Excise Tax Act, paragraph 240(1)(a) and section 166
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
  • Municipalities that are small suppliers are required to charge and remit GST on sales of their capital property, effective after March 9, 2004 (Department of Finance Canada news release 2004-018, March 9, 2004). This change was made concurrently with the increase to 100% of the rebate for municipalities.
  • Budget 2017 announced that the definition of “taxi business” in the Excise Tax Act would be amended to include providers of ride-sharing services. This means that the small suppliers’ threshold no longer applies to these providers; they must register for and collect GST/HST regardless of the total amount of sales they make. The change was effective July 1, 2017.
Objective – category To reduce administration or compliance costs
Objective This measure ensures that very small businesses do not face an additional compliance burden as a result of the introduction of the GST (Goods and Services Tax: Technical Paper, August 1989).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system This measure is a deviation from a broadly defined value-added tax base.
Subject Business - small businesses
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs Programs within the mandate of Innovation, Science and Economic Development Canada also support small businesses. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
T2 Corporation Income Tax Return
GST34 Goods and Services Tax/Harmonized Sales Tax Return
Estimation method The cost of this measure is estimated by applying the GST rate to the difference between the gross and net revenues of non-registered businesses with gross revenue under $30,000. Gross and net revenue data is obtained from personal and corporate income tax information, and businesses that are registered for the GST are identified using data from the GST34 Return.
Projection method The cost of this measure is projected to grow in line with nominal gross domestic product.
Number of beneficiaries About 1.3 million small suppliers make use of this measure each year.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 205 210 225 230 235 245 260 265
Special tax computation for certain retroactive lump-sum payments
  Value
Description Taxpayers receiving qualifying retroactive lump-sum payments may use a special mechanism to compute the tax on those payments. The tax under the special mechanism is the federal tax that would have been payable if the principal portion of the retroactive lump-sum payment had been taxed in the year to which it relates, plus interest to reflect the time value of money in respect of the delay in paying the tax. The interest component of the receipt of a lump-sum payment is fully included in income in the year in which it is received. To be eligible for the special tax calculation, the right to receive the income must have existed in a prior year. In addition, the principal portion of the lump-sum payment must be at least $3,000, and must have been received in a year after 1994.
Tax Personal income tax
Beneficiaries Individuals
Type of measure Other
Legal reference Income Tax Act, sections 110.2 and 120.31
Implementation and recent history
  • Introduced in Budget 1999. Effective for the 1995 and subsequent taxation years.
Objective – category To assess tax liability over a multi-year period
Objective This measure aims to ensure that the Government does not benefit from the delay in certain types of lump-sum payments at the taxpayer’s expense as a result of the progressivity of the income tax system (Budget 1999).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system This measure is considered part of the benchmark tax system, and therefore is not a tax expenditure.
Subject Other
CCOFOG 2014 code n/a
Other relevant government programs n/a
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model. The value of this measure corresponds to the difference between the tax that would be owed on the principal portion of eligible retroactive lump-sum payments if they were taxed in the year received, and the tax computed under the special mechanism.
Projection method T1 micro-simulation model
Number of beneficiaries This measure provided tax relief to about 1,000 individuals in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax S 4 1 1 1 1 1 1
Special tax rate for credit unions
  Value
Description Credit unions are eligible for the preferential small business tax rate of 10% that generally applies to a Canadian-controlled private corporation on the first $500,000 of qualifying income (the cost associated with this preferential tax rate is included under the tax expenditure “Preferential tax rate for small businesses”). An additional deduction, available only to credit unions, provides access to the preferential income tax rate for income that is not eligible for the small business deduction. This tax expenditure represents the cost of this additional preference.
Budget 2013 announced the phase-out over five years of this additional preference for credit unions. For 2013, the preferential tax rate applied to 80% of the qualifying income of a credit union that exceeds $500,000. This percentage is reduced to 60% in 2014, 40% in 2015, 20% in 2016, and 0% in 2017 and subsequent years.
Tax Corporate income tax
Beneficiaries Credit unions
Type of measure Preferential tax rate
Legal reference Income Tax Act, subsection 137(3)
Implementation and recent history
  • Introduced in 1972 to provide credit unions with access to the preferential tax rate for small businesses.
  • Over time, changes made to the design of the preferential tax rate for small businesses resulted in a more generous tax preference being available to credit unions.
  • Budget 2013 announced the phase-out over five years of this additional preference for credit unions (see the description for details).
Objective – category To encourage or attract investment
Objective This measure permits a credit union to accumulate capital on a tax-preferred basis up to a maximum of 5% of deposits and capital (Department of Finance Canada news release 71-157, December 6, 1971).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system The applicable tax rate departs from the benchmark tax rate.
Subject Business - other
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs Programs within the mandates of Global Affairs Canada, Public Services and Procurement Canada, and the regional development agencies (among other federal organizations) also offer support to Canadian businesses in various manners. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T2 Corporation Income Tax Return
Estimation method This tax expenditure is estimated by multiplying the additional deduction claimed by credit unions with a factor that represents the difference between the federal general corporate tax rate of 15% and the preferential small business tax rate.
Projection method Projections for this measure are derived under the assumption that the amount of deduction claimed will increase at the same rate as the average of taxable income and will be subject to applicable phase-out factors.
Number of beneficiaries About 315 credit unions applied this special tax rate in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Corporate income tax 35 25 20 15 10 1
Spouse or Common-Law Partner Credit
  Value
Description A taxpayer supporting a spouse or common-law partner may be eligible for the non-refundable Spouse or Common-Law Partner Credit, the value of which is calculated by applying the lowest personal income tax rate to the credit amount of $11,635 (in 2017). The credit amount is indexed to inflation. The credit amount is reduced dollar-for-dollar by the net income of the dependent spouse or common-law partner.
Tax Personal income tax
Beneficiaries Couples
Type of measure Credit, non-refundable
Legal reference Income Tax Act, paragraph 118(1)(a)
Implementation and recent history
  • Introduced as part of the 1987 Tax Reform, effective for the 1988 and subsequent taxation years, to replace the previous married exemption.
  • Until 2007, the Spouse or Common-Law Partner Credit amount was less than the Basic Personal Amount, and was reduced dollar-for-dollar by the net income of the dependent spouse or common-law partner in excess of the income threshold applicable for the taxation year.
  • Budget 2007 introduced two changes to the Spouse or Common-Law Partner Credit: (i) the credit amount was set equal to the Basic Personal Amount; and (ii) the income threshold was eliminated, resulting in the credit amount being reduced dollar-for-dollar by the net income of the dependent spouse or common-law partner. These changes became effective in 2007.
Objective – category To recognize non-discretionary expenses (ability to pay)
Objective This measure recognizes that a taxpayer whose spouse or common-law partner has little or no income has a reduced ability to pay tax relative to a single taxpayer with the same income (Report of the Royal Commission on Taxation, vol. 3, 1966).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system.
Subject Families and households
CCOFOG 2014 code 71049 - Social protection - Family and children
Other relevant government programs Programs within the mandates of Employment and Social Development Canada and Indigenous and Northern Affairs Canada also support Canadian families and households. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 2 million individuals claimed this credit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 1,635 1,510 1,505 1,440 1,595 1,740 1,790 1,840
Student Loan Interest Credit
  Value
Description Individuals can claim a non-refundable credit in respect of interest paid in the year or in the preceding five years on a student loan received for post-secondary education under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act or similar provincial or territorial government programs. The value of the credit is calculated by applying the lowest personal income tax rate to the amount of interest paid.
Tax Personal income tax
Beneficiaries Students
Type of measure Credit, non-refundable
Legal reference Income Tax Act, section 118.62
Implementation and recent history
  • Introduced in Budget 1998. Effective for the 1998 and subsequent taxation years.
  • Extended to Canada Apprentice Loans in Budget 2014.
Objective – category To recognize education costs
Objective This measure helps individuals manage their student debt loads by providing tax relief for interest payments on student loans and improving the Canada Student Loan Program to help borrowers facing financial difficulties (Budget 1998).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system.
The tax benefit from this measure can be obtained in a taxation year other than the year during which it accrues.
Subject Education
CCOFOG 2014 code 70939 - Education - College education
70949 - Education - University education
70959 - Education - Education not definable by level
Other relevant government programs Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and Indigenous and Northern Affairs Canada also support objectives related to education and training. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 553,000 individuals claimed this credit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 45 45 40 40 40 40 40 40
Surtax on the profits of tobacco manufacturers
  Value
Description Tobacco manufacturers were subject to a surtax on their profits, equivalent to an additional income tax of 10.5% on Canadian tobacco manufacturing profits. This measure was a negative tax expenditure as the surtax resulted in more revenues than would otherwise be raised under the benchmark tax system. Budget 2017 announced the repeal of the surtax as of March 23, 2017.
Tax Corporate income tax
Beneficiaries Tobacco manufacturers
Type of measure Surtax
Legal reference Income Tax Act, Part II, section 182
Implementation and recent history
  • Introduced in February 1994 as part of the National Action Plan to Combat Smuggling for a three-year period at a level equivalent to an additional income tax of 8.4% on Canadian tobacco manufacturing profits.
  • Announcement in November 1996 that the surtax would be extended for another three years from February 1997 to February 2000.
  • Announcement in November 1999 that the surtax would be made permanent, effective February 2000.
  • The surtax was increased to a level equivalent to an income tax of 10.5% on Canadian tobacco manufacturing profits, effective April 2001.
  • Following the review of federal tax expenditures, Budget 2017 announced that the tobacco surtax would be eliminated effective March 23, 2017, and tobacco excise duty rates would be adjusted in order to maintain the intended tax burden of the manufacturers' surtax on tobacco products.
Objective – category To achieve a social objective
Objective This measure was introduced as part of the National Action Plan to Combat Smuggling to reduce the windfall profits for the tobacco industry that resulted from the reduction in tobacco excise taxes that were implemented as part of this plan. The rate of surtax was increased in 2001 as part of the Government’s comprehensive strategy to improve the health of Canadians by discouraging tobacco consumption (Department of Finance Canada news release 2001-039, April 5, 2001).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system The applicable tax rate departs from the benchmark tax rate.
Subject Health
CCOFOG 2014 code 70761 - Health - Health not elsewhere classified - Health prevention programs (collective)
Other relevant government programs Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T2 Corporation Income Tax Return
Estimation method The value of this measure is based on data on actual amounts of surtax paid.
Projection method n/a
Number of beneficiaries The number of corporations affected by this measure is not published in order to preserve taxpayer confidentiality.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Corporate income tax X X X X X X
Tax status of certain federal Crown corporations
  Value
Description Under section 125 of the Constitution Act, 1867, Canada and the Provinces are immune from taxation. This immunity generally extends to federal Crown corporations that act as agents of the Crown. However, federal Crown corporations prescribed under the Income Tax Regulations that carry on substantial business activities, as well as their subsidiaries, are subject to federal corporate income tax. This gives rise to a negative tax expenditure. For agent Crown corporations, the applicable federal tax rate is increased by 10% (i.e., they do not benefit from the federal abatement) given that no provincial taxes apply. Prescribed non-agent Crown corporations are taxed at the regular applicable rate by both the federal and provincial governments.
Tax Corporate income tax
Beneficiaries Certain federal Crown corporations
Type of measure Other
Legal reference Income Tax Act, sections 27 and 124 and paragraphs 149(1)(d) to (d.4)
Income Tax Regulations, section 7100
Implementation and recent history
  • The taxation of prescribed federal Crown corporations was introduced in 1952.
  • The list of prescribed federal Crown corporations is reviewed and updated as required.
Objective – category To ensure a neutral tax treatment across similar situations
To support competitiveness
Objective This measure is intended to ensure a level playing field between these corporations and similar businesses in the private sector.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system The measure imposes federal tax on prescribed federal Crown corporations that would otherwise be immune or exempt from income tax.
Subject Business - other
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs Programs within the mandates of Global Affairs Canada, Public Services and Procurement Canada, and the regional development agencies (among other federal organizations) also offer support to Canadian businesses in various manners. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T2 Corporation Income Tax Return
Estimation method The value of this (negative) tax expenditure corresponds to the taxes paid by prescribed federal Crown corporations.
Projection method n/a
Number of beneficiaries The Income Tax Regulations currently prescribe 10 federal Crown corporations.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Corporate income tax X X X X X X X X
Tax treatment of active business income of foreign affiliates of Canadian corporations and deductibility of expenses incurred to invest in foreign affiliates
  Value
Description The active business income of a foreign affiliate of a Canadian corporation is effectively exempt from tax in Canada, both when it is earned and when paid out as a dividend to the Canadian corporation, if the foreign affiliate is located in a country which has a tax treaty or tax information exchange agreement (TIEA) with Canada and has earned the income from a business carried on in such a country (referred to as "exempt surplus" treatment). In other situations the active business income of a foreign affiliate is generally taxable in Canada when paid out as a dividend to the Canadian corporation ("taxable surplus" treatment). Half of a dividend paid out of certain capital gains of a foreign affiliate is taxable in Canada, and half is exempt ("hybrid surplus" treatment). If the active business income is earned by a controlled foreign affiliate in a country with which Canada has no tax treaty and has not concluded a TIEA within five years of being asked by Canada to do so, then it is taxed to the Canadian corporation as it accrues (i.e., on a current basis as "foreign accrual property income"). Where active business income is taxable, relief is provided for foreign tax paid on that income.

Interest and other expenses incurred by a Canadian corporation in respect of an investment in a foreign affiliate can generally be deducted in Canada, regardless of whether income from that investment is taxable in Canada, subject only to the general limitations on the deductibility of interest that are not specific to investments in foreign affiliates.
Tax Corporate income tax
Beneficiaries Corporations with foreign affiliates
Type of measure Exemption; deduction
Legal reference Income Tax Act, sections 91 and 113 and subsections 20(1), 93.1(1), 94.2(2) and 95(1) Income Tax Regulations, sections 5900-5902, 5905 and 5907
Implementation and recent history
  • Most aspects of the current system were introduced as part of the 1972 Tax Reform and became effective as of 1976.
  • Budget 2007 added the provisions related to TIEAs, effective 2008.
  • The hybrid surplus provisions were added in 2014, effective retrospectively to August 2011.
Objective – category To support competitiveness To prevent double taxation
Objective The tax treatment of foreign active business income prevents international double taxation, supports the competitiveness of Canadian companies abroad, and assists Canada's policy on tax information exchange by giving an incentive to non-treaty countries to enter into TIEAs with Canada (Proposals for Tax Reform, 1969; Budget 2007).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system There are at least three possible benchmarks for taxing the active business income of foreign affiliates of Canadian corporations (see part I of this report, footnote 5). Under the benchmark where that income would be exempt, its taxation in Canada in certain circumstances would be a negative tax expenditure, while the deductibility of interest would be a positive tax expenditure. Under the benchmark where that income would be taxable when dividends are paid to the Canadian corporation, the exemption in some cases would be a positive tax expenditure, taxation of the income on an accrual basis in certain cases would be a negative tax expenditure, and the immediate deductibility of interest would be a positive tax expenditure. Under the benchmark where that income would be taxable in Canada as it accrues, the exemption of that income in some cases and the deferral of tax until the income is paid out as dividends in other cases would both be considered a positive tax expenditure.
Subject International
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs n/a
Source of data n/a
Estimation method n/a
Projection method n/a
Number of beneficiaries About 9,450 Canadian corporations reported having foreign affiliates in 2013, of which 950 corporations received dividends from foreign affiliates in 2013.
Tax treatment of alimony and maintenance payments
  Value
Description Spousal support payments (also called "alimony and maintenance payments") paid on a periodic basis under a written agreement or court order are deductible by the payer and included in the taxable income of the recipient.
Tax Personal income tax
Beneficiaries Former couples
Type of measure Other
Legal reference Income Tax Act, paragraph 56(1)(b) and subsection 60(b)
Implementation and recent history
  • Budget 1944 made alimony and comparable payments deductible from income.
  • Budget 1958 extended the tax treatment of payments in support of a dependant to cases where no divorce or written separation agreement was made, so long as the payments are made under a court order.
Objective – category To extend or modify the unit of taxation
Objective This measure provides consistent tax treatment of alimony payments under a written agreement or court order.
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure extends the unit of taxation.
Subject Families and households
CCOFOG 2014 code 71049 - Social protection - Family and children
Other relevant government programs Programs within the mandates of Employment and Social Development Canada and Indigenous and Northern Affairs Canada also support Canadian families and households. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model. The value of this tax expenditure corresponds to the value of the deduction to the payer, less the tax collected from the recipient.
Projection method T1 micro-simulation model
Number of beneficiaries About 85,000 individuals reported having received alimony or maintenance payments in 2015, while about 62,000 individuals claimed a deduction.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 60 65 65 65 75 75 75 75
Tax treatment of Canada Pension Plan and Quebec Pension Plan contributions and benefits
  Value
Description Contributions to the Canada Pension Plan/Quebec Pension Plan receive tax recognition for income tax purposes, consistent with the taxation of the benefits received. Employees receive a tax credit for their contributions, and employer contributions are not included in their incomes. Self-employed individuals also receive a tax credit for the employee portion of the contribution, as well as a deduction for the employer portion. For both employees and self-employed individuals, the value of the credit for contributions is calculated by applying the lowest personal income tax rate to the value of contributions (15% in 2017).

As part of the 2016 agreement to enhance the Canada Pension Plan, a tax deduction will be provided on employee contributions (and on the employee share of contributions by self-employed individuals) associated with the enhanced portion of the Canada Pension Plan (contributions to the enhanced portion of the Canada Pension Plan will commence in 2019). The tax treatment of contributions to the base Canada Pension Plan will remain as described above.
Tax Personal income tax
Beneficiaries Employees and self-employed individuals
Type of measure Exemption; credit, non-refundable; deduction
Legal reference Income Tax Act,section 118.7 and paragraphs 56(1)(a), 60(1)(e) and (e.1)
Implementation and recent history
  • Budget 1965 introduced a deduction for Canada Pension Plan contributions, effective for the 1965 and subsequent taxation years. This deduction was replaced by a non-refundable tax credit as part of the 1987 Tax Reform.
  • Bill C-26, which came into force on March 2, 2017, amended the Income Tax Act to provide a tax deduction for employee contributions to the enhanced portion of the Canada Pension Plan (the enhanced portion of the Canada Pension Plan will begin to be phased in starting in 2019).
Objective – category Other
Objective These measures ensure a consistent tax treatment of Canada Pension Plan/Quebec Pension Plan contributions and benefits.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system These measures are considered part of the benchmark tax system, and therefore are not tax expenditures.
Subject Employment Retirement
CCOFOG 2014 code 70412 - Economic affairs - General economic, commercial, and labor affairs - General labor affairs 71029 - Social protection - Old age
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support employment. Programs within the mandate of Employment and Social Development Canada also support retirement income security. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 15.9 million individuals claimed the credit for Canada Pension Plan or Quebec Pension Plan contributions on employment income in 2015, while about 1.6 million claimed the credit for these contributions on self-employment or other income.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Tax recognition for employee-paid contributions 3,305 3,415 3,575 3,715 3,775 3,880 4,000 4,380
Non-taxation of employer-paid contributions 5,310 5,480 5,695 6,095 6,030 6,230 6,440 6,985
Total – personal income tax 8,620 8,895 9,270 9,810 9,805 10,110 10,440 11,360
Tax treatment of Employment Insurance and Quebec Parental Insurance Plan premiums and benefits
  Value
Description A tax credit is provided for Employment Insurance and Quebec Parental Insurance Plan premiums paid by employees, while premiums paid by employers are not included in employees' incomes. The recognition for income tax purposes of employee and employer premiums is consistent with the taxation of the benefits received. The value of the credit for employee premiums is calculated by applying the lowest personal income tax rate to the premiums.
Tax Personal income tax
Beneficiaries Employees and self-employed individuals
Type of measure Exemption; credit, non-refundable
Legal reference Income Tax Act,section 118.7, subparagraphs 56(1)(a)(iv) and (vii) and paragraph 56(1)(r)
Implementation and recent history
  • Budget 1971 introduced a deduction for employee premiums. This deduction was replaced by a non-refundable tax credit as part of the 1987 Tax Reform.
  • The credit was amended in 2010 to allow for a credit in respect of Quebec Parental Insurance Plan premiums, effective for 2006 and subsequent years, and to allow for a credit in respect of premiums paid by self-employed individuals.
Objective – category Other
Objective These measures ensure a consistent tax treatment of Employment Insurance and Quebec Parental Insurance Plan premiums and benefits.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system These measures are considered part of the benchmark tax system, and therefore are not tax expenditures.
Subject Employment Social
CCOFOG 2014 code 70412 - Economic affairs - General economic, commercial, and labor affairs - General labor affairs 71049 - Social protection - Family and children
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support employment. Programs within the mandates of Canadian Heritage, Immigration, Refugees and Citizenship Canada, Transport Canada and Public Safety Canada (among other departments) also support various other social objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries In 2015, about 15.3 million individuals claimed the credit for Employment Insurance contributions on employment income, while about 6,000 individuals claimed this credit on self-employment or other eligible earnings. About 3.7 million individuals claimed the credit for Quebec Parental Insurance Plan contributions on employment income earned in the province of Quebec, while about 113,000 individuals claimed the credit on income earned outside Quebec. About 440,000 individuals claimed the Quebec Parental Insurance Plan credit on self-employment or other eligible income.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Credit for employee-paid premiums 1,155 1,235 1,290 1,330 1,345 1,205 1,260 1,295
Non-taxation of employer-paid premiums 2,385 2,565 2,680 2,890 2,835 2,550 2,675 2,770
Total – personal income tax 3,540 3,800 3,970 4,220 4,185 3,755 3,935 4,070
Tax treatment of farm savings accounts (AgriInvest and Agri-Québec)
  Value
Description AgriInvest is a producer savings account that provides flexible coverage to farmers for small income declines (first 15% of income) and supports investments to mitigate risks and improve market income. Generally, producers may make a deposit into an AgriInvest account each year, and receive a matching contribution from the federal and provincial governments. Interest income earned in AgriInvest accounts and government contributions to them are not taxable until the year of withdrawal.

Since 2011, the province of Quebec has supplemented AgriInvest with the Agri-Québec program, an agricultural income stabilization account program that is very similar to the AgriInvest program. The Agri-Québec program is accorded the same income tax treatment as is provided to the AgriInvest program.
Tax Personal and corporate income tax
Beneficiaries Farming businesses
Type of measure Timing preference
Legal reference Income Tax Act, subsections 12(10.2) and 248(1)
Implementation and recent history
  • Introduced in Budget 2007. Effective for the 2007 and subsequent taxation years. A similar tax treatment was previously granted to accounts established under the Net Income Stabilization Account program. This program was introduced in 1991 and terminated in 2009.
  • Budget 2011 extended the AgriInvest tax treatment to the Agri-Québec program, effective for the 2011 and subsequent taxation years.
Objective – category To achieve an economic objective - other To encourage savings
Objective This measure is provided in support of the AgriInvest program, which is designed to encourage farmers, through government-matched contributions, to set aside earnings in order to provide coverage against income declines.
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Business - farming and fishing
CCOFOG 2014 code 70421 - Economic affairs - Agriculture, forestry, fishing, and hunting - Agriculture
Other relevant government programs Programs within the mandates of Agriculture and Agri-Food Canada and Fisheries and Oceans Canada also support the farming and fishing sectors. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Agriculture and Agri-Food Canada
Estimation method Personal income tax (unincorporated farms): The value of this tax expenditure is estimated on a cash-flow basis and corresponds to the taxes forgone in the year on the government contributions to and interest income earned in the farm savings accounts, minus the taxes paid on amounts withdrawn from the accounts in the year. This amount is multiplied by the share of farms that are unincorporated. Calculations are based on a marginal tax rate for unincorporated farm income as estimated by the Department of Finance Canada.

Corporate income tax (incorporated farms): The estimated amount described above is multiplied by the share of farms that are incorporated and then by the average tax rate faced by farms, based on T2 tax return data. No estimate is available for Agri-Québec.
Projection method Projections for 2017 through 2019 are not provided as the value of this measure cannot be reliably forecast for these years.
Number of beneficiaries As of December 2016, about 110,000 AgriInvest accounts were registered.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 2017 (P) 2018 (P) 2019 (P)
AgriInvest program                
  Personal income tax 10 15 4 3 15 n.a. n.a. n.a.
  Corporate income tax 2 2 1 S 2 n.a. n.a. n.a.
  Total 15 20 4 3 15 n.a. n.a. n.a.
Agri-Québec program                
  Personal income tax n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
  Corporate income tax n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
  Total n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Total                
  Personal income tax n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
  Corporate income tax n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
  Total n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Tax treatment of investment income from life insurance policies
  Value
Description A life insurance policyholder is not subject to annual taxation on the investment income earned in a life insurance policy as long as the policy qualifies as an exempt life insurance policy. Instead, life insurance companies pay a 15% tax (known as the Investment Income Tax) on the income they earn on investments that they hold to meet their liabilities under the life insurance policy. This treatment results in a tax deferral and tax rate reduction to the extent that the Investment Income Tax is less than the income tax that the policyholders would pay if they were taxed on the investment income as this income accrues.

In practice, almost all life insurance policies with a savings element are structured by the life insurance industry to qualify as exempt policies, with the result that the Investment Income Tax system is the de facto system.
Tax Personal income tax
Beneficiaries Life insurance policyholders
Type of measure Preferential tax rate
Legal reference Income Tax Act, subsections 12.2(9) and 211.1(1) and (2)
Implementation and recent history
  • Prior to 1968, the accumulated savings within a life insurance policy were not taxed.
  • To reduce the tax preference given to savings accumulated in a life insurance policy, the Investment Income Tax was introduced in 1968, along with additional rules to tax on an accrual basis the income earned in non-exempt life insurance policies.
  • The Investment Income Tax was repealed in 1978, reintroduced in 1987, and modified and considerably simplified in 1990.
Objective – category To reduce administration or compliance costs
Objective This measure simplifies the taxation of investment income earned on life insurance policies.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system The applicable tax rate departs from the benchmark tax rate.
Subject Savings and investment
CCOFOG 2014 code 71029 - Social protection - Old age
Other relevant government programs n/a
Source of data T2 Corporation Income Tax Return, industry survey statistics
Estimation method The tax expenditure is estimated as the difference between the annual tax that would be payable by policyholders and the Investment Income Tax paid by life insurance companies.
Projection method Projected growth in the Investment Income Tax is based on changes to average reserves and long-term bond rates.
Number of beneficiaries According to the Canadian Health and Life Insurance Association, about 22 million individuals own life insurance.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 275 270 255 220 205 190 200 205
Taxation of capital gains upon realization
  Value
Description In general, capital gains are taxed on a realization basis, upon the disposition of property. This results in a tax expenditure because, under the benchmark tax system, capital gains (net of capital losses) would be included in income as they accrue.
Tax Personal and corporate income tax
Beneficiaries Individuals and corporations
Type of measure Timing preference
Legal reference Income Tax Act, subsection 40(1)
Implementation and recent history
  • Introduced in Budget 1971. Effective for the 1972 and subsequent taxation years.
Objective – category To reduce administration or compliance costs
Objective This measure recognizes that, in many cases, it is difficult to estimate with accuracy the value of unsold assets, and that taxing the accrued gains on assets that have not been sold would be administratively complex and could create significant liquidity problems for taxpayers (Report of the Royal Commission on Taxation, vol. 3, 1966).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system This measure permits the deferral of the recognition of income or gains for income tax purposes.
Subject Savings and investment
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs n/a
Source of data No data is available.
Estimation method No estimate is available.
Projection method No projection is available.
Number of beneficiaries No data is available.
Tax-free amount for emergency services volunteers
  Value
Description A volunteer emergency service provider can claim an exemption of up to $1,000 for amounts received from a government, municipality or other public authority for work as a volunteer ambulance technician, firefighter, or search, rescue or other type of emergency worker. If the volunteer emergency service provider claims the $1,000 exemption, he or she cannot claim the Volunteer Firefighters Tax Credit or Search and Rescue Volunteers Tax Credit in respect of the emergency work.
Tax Personal income tax
Beneficiaries Providers of volunteer emergency services
Type of measure Exemption
Legal reference Income Tax Act, subsection 81(4) and sections 118.06 and 118.07
Implementation and recent history
  • Introduced in Budget 1961. Retroactive to the 1958 taxation year and effective in subsequent taxation years. The exemption was initially limited to volunteer firefighters.
  • Budget 1998 increased the exemption for volunteer firefighters to $1,000 from $500 and extended the exemption to other emergency services volunteers.
Objective – category To achieve a social objective
Objective This measure assists small and rural communities, which are often unable to maintain full-time emergency staff and depend on the services of volunteers. The measure supports emergency services volunteers who give freely of their time and expertise, often at considerable risk to themselves, in the service of their community (Budget 1998).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure exempts from tax income or gains that are included in a comprehensive income tax base.
Subject Social
CCOFOG 2014 code 70329 - Public order and safety - Fire protection services 70369 - Public order and safety - Public order and safety not elsewhere classified
Other relevant government programs Programs within the mandates of Canadian Heritage, Immigration, Refugees and Citizenship Canada, Transport Canada and Public Safety Canada (among other departments) also support various other social objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T4 Statement of Remuneration Paid
Estimation method The value of this measure is estimated by first excluding taxpayers who claim the Volunteer Firefighters Tax Credit rather than the exemption. An estimate of forgone tax revenue is calculated by multiplying the total number of individuals assumed to claim the exemption by the average amount claimed in the year, and by the marginal tax rate of individuals claiming the Volunteer Firefighters Tax Credit over the estimation period.
Projection method The projection assumes 0.68% average annual growth in the number of emergency services volunteers claiming the exemption.
Number of beneficiaries It is estimated that about 20,000 individuals claimed this exemption in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 3 4 3 3 3 4 4 4
Tax-Free Savings Account
  Value
Description The Tax-Free Savings Account (TFSA) is a general-purpose savings account that allows individuals to earn tax-free investment income. Individuals 18 years of age and older acquire TFSA contribution room each year, with unused room being carried forward. TFSA contributions are not deductible, but investment income earned in the account and amounts withdrawn are not included in income for tax purposes or taken into account in determining eligibility for federal income-tested benefits and credits. Withdrawals also create contribution room in the following year for future savings.
Tax Personal income tax
Beneficiaries Individuals
Type of measure Exemption
Legal reference Income Tax Act, sections 146.2 and 207.01
Implementation and recent history
  • Introduced in Budget 2008. Effective for 2009 and subsequent years.
  • The TFSA annual contribution limit was initially $5,000 per individual, indexed to inflation in $500 increments. The limit increased to $5,500 on January 1, 2013 due to indexation.
  • Budget 2015 increased the TFSA annual contribution limit to $10,000, not indexed to inflation, for 2015 and subsequent taxation years.
  • On December 7, 2015, the Government announced that the TFSA annual contribution limit would be returned to $5,500 and that indexation would be reinstated, effective for 2016. 
Objective – category To encourage savings
Objective This measure improves incentives for Canadians to save by reducing taxes on savings (Budget 2008).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system This measure exempts from tax income or gains that are included in a comprehensive income tax base.
Subject Savings and investment
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs n/a
Source of data Canada Revenue Agency, Tax-Free Savings Account statistics
Estimation method The value of this tax expenditure corresponds to the tax revenues forgone on the investment income earned in TFSAs. It is calculated by estimating how much of the total investment income earned in TFSAs is interest, dividends or capital gains, and multiplying these amounts by estimates of the average marginal tax rates applicable to TFSA holders (accounting for the dividend gross-up and tax credit and for the partial inclusion of capital gains). Interest income and dividend income are calculated based on estimated shares of TFSA assets that are fixed income and equity investments and on historical interest rates and dividend yields. Capital gains (or losses) are determined residually by subtracting estimated interest and dividend income from the total investment income.
Projection method The value of this measure is projected based on the expected growth of net contributions and investment income earned in the accounts.
Number of beneficiaries About 12.7 million individuals had a TFSA at the end of 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 270 425 565 635 845 1,020 1,140 1,280
Teacher and Early Childhood Educator School Supply Tax Credit
  Value
Description Teachers and early childhood educators may claim a 15% refundable tax credit based on an amount of up to $1,000 in expenditures made in a taxation year for eligible supplies.

Eligible supplies must be purchased for use in a school or in a regulated child care facility for the purpose of teaching or otherwise enhancing students' learning in the classroom or learning environment. Eligible supplies include the following durable goods: games and puzzles; supplementary books for classrooms; educational support software; and containers (such as plastic boxes or banker boxes for themes and kits). Eligible supplies also include consumable goods, such as construction paper for activities, flashcards or activity centres.

This measure applies to supplies acquired on or after January 1, 2016.
Tax Personal income tax
Beneficiaries Teachers and early childhood educators
Type of measure Credit, refundable
Legal reference Income Tax Act, section 122.9
Implementation and recent history
  • Introduced in Budget 2016, effective for the 2016 and subsequent taxation years.
Objective – category To recognize expenses incurred to earn employment income
Objective This measure provides tax recognition for costs that educators often incur at their own expense for supplies that enrich the learning environment (Budget 2016).
Category Refundable tax credit
Reason why this measure is not part of benchmark tax system This measure is classified as a transfer payment for government accounting purposes, and therefore is not considered to be a tax expenditure.
Subject Employment
CCOFOG 2014 code 70412 - Economic affairs - General economic, commercial, and labor affairs - General labor affairs
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support employment. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Labour Force Survey
Estimation method n/a
Projection method Projections are based on estimates of total amounts to be claimed multiplied by the 15% credit rate. Total amounts to be claimed are estimated on the basis of the eligible population and anticipated out-of-pocket school supply expenses. The number of eligible educators is projected to grow in line with Employment and Social Development Canada's Canadian Occupational Projection System for secondary and elementary school teachers and counsellors.
Number of beneficiaries More than 46,000 individuals claimed this credit in 2016.

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 3 5 5 5
Textbook Tax Credit
  Value
Description A student eligible for the Education Tax Credit could claim a non-refundable tax credit at the lowest personal income tax rate for post-secondary textbook costs. For full-time students the amount was $65 per month of study, and for part-time students the amount was $20 per month. Unused amounts could be transferred to a supporting individual or carried forward to a subsequent taxation year. Budget 2016 announced the elimination of this measure as of 2017. Amounts carried forward from prior years may still be claimed.
Tax Personal income tax
Beneficiaries Students and individuals supporting them
Type of measure Credit, non-refundable
Legal reference Income Tax Act, subsection 118.6(2.1)
Implementation and recent history
  • Introduced in Budget 2006. Effective for the 2006 and subsequent taxation years.
  • Budget 2016 announced the elimination of this measure as of 2017.
Objective – category To recognize education costs
Objective This measure provided better tax recognition for the cost of textbooks for post-secondary students (Budget 2006).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system. This measure extended the unit of taxation. The tax benefit from this measure could be obtained in a taxation year other than the year during which it accrued.
Subject Education
CCOFOG 2014 code 70939 - Education - College education 70949 - Education - University education 70959 - Education - Education not definable by level
Other relevant government programs Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and Indigenous and Northern Affairs Canada also support objectives related to education and training. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 2.3 million individuals earned this credit in 2015.

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 110 115 115 120 120 65 50 40
Transfer of income tax points to provinces
  Value
Description The federal government transfers 14.85851 points of personal income tax and one point of corporate income tax to provincial and territorial governments as part of existing federal-provincial fiscal arrangements.
Tax Personal and corporate income tax
Beneficiaries n/a
Type of measure Other
Legal reference Federal-Provincial Fiscal Arrangements Act, Part V.1
Implementation and recent history
  • In 1967, the federal government transferred four points of personal income tax to all provinces in place of certain direct cash transfers under the then-existing cost-shared program for post-secondary education.
  • In 1977, the federal government agreed to transfer an additional 9.143 points of personal income tax and one point of corporate income tax to all provinces and territories as part of the Established Programs Financing for health and post-secondary education.
  • The 1977 reform involved a reduction of federal tax by 9.143% and a concurrent increase in provincial rates. This is the equivalent of 14.85851 tax points.
Objective – category To implement intergovernmental tax arrangements
Objective This measure reflects arrangements with provincial and territorial governments that allowed them to receive part of the federal program contribution for health and social programs in the form of tax abatements.
Category Structural tax measure
Reason why this measure is not part of benchmark tax system This measure is considered part of the benchmark tax system, and therefore is not a tax expenditure.
Subject Intergovernmental tax arrangements
CCOFOG 2014 code n/a
Other relevant government programs n/a
Source of data Canada Revenue Agency, Tax Sharing Statements
Estimation method The value of the tax point transfers for personal income tax is estimated by multiplying Basic Federal Tax by 0.1485851. For corporate income tax, it is estimated by multiplying corporate taxable income by 0.01.
Projection method Projections for this measure are based on forecasted growth of Basic Federal Tax for personal income tax and corporate taxable income for corporate income tax.
Number of beneficiaries n/a

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 19,115 20,155 21,120 22,600 22,040 23,600 24,855 25,835
Corporate income tax 2,515 2,655 2,855 2,850 3,120 3,480 3,740 3,940
Total 21,630 22,815 23,975 25,450 25,160 27,080 28,595 29,775
Travellers’ exemption
  Value
Description Canadian travellers are eligible for limited GST relief on goods they bring back to Canada. The relief that is provided depends on the length of absence: returning residents can bring back up to $200 in goods without paying the GST if they were outside the country for between 24 and 48 hours, and up to $800 in goods if they were away for more than 48 hours. There is no relief for same-day travel. This measure is referred to as an "exemption", based on customs administrative terminology. However, the imported goods are not exempt supplies as defined under the Excise Tax Act, and unlike exempt supplies, no GST is embedded in the cost of these goods.
Tax Goods and Services Tax
Beneficiaries Canadian travellers returning to Canada
Type of measure Other
Legal reference Section 1 of Schedule VII to the Excise Tax Act
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
  • Budget 2012 announced the following increases in the travellers' exemption limits for lengths of absence greater than 24 hours, effective June 1, 2012:
    • From $50 to $200 for lengths of absence between 24 and 48 hours;
    • From $400 to $800 for lengths of absence between 48 hours and 7 days;
    • From $750 to $800 for lengths of absence over 7 days.
Objective – category To reduce administration or compliance costs
Objective This measure expedites customs clearance for returning Canadian consumers, making cross-border business and personal travel more convenient for Canadians (Department of Finance Canada news release 2012-061, June 1, 2012).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system The non-taxation of goods that will be consumed in Canada is a deviation from a broadly defined value-added tax base.
Subject International
CCOFOG 2014 code 70499 - Economic affairs - Economic affairs not elsewhere classified
Other relevant government programs n/a
Source of data Statistics Canada, Supply and Use Tables Canada Border Services Agency data
Estimation method The cost of this measure is calculated by applying the GST rate to Statistics Canada's estimates of expenditures by Canadians abroad on goods brought back to Canada less the GST collected on such goods.
Projection method The cost of this measure is projected to grow in line with non-merchandise travel imports.
Number of beneficiaries No data is available.

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 215 225 250 270 275 290 295 310
Tuition Tax Credit
  Value
Description A student can claim a non-refundable tax credit at the lowest personal income tax rate on tuition fees paid to designated educational institutions where the total for such fees exceeds $100. The student must claim the credit first on his or her own return. If the student does not need to use all of the credit, the unused amount may be transferred to a supporting individual or carried forward to a subsequent taxation year.
Tax Personal income tax
Beneficiaries Students and individuals supporting them
Type of measure Credit, non-refundable
Legal reference Income Tax Act, section 118.5
Implementation and recent history
  • Introduced as a deduction in Budget 1960. Effective for the 1961 and subsequent taxation years.
  • Replaced by a non-refundable tax credit and made transferable to spouses, parents or grandparents as part of the 1987 Tax Reform.
  • Budget 1997 introduced a provision allowing unused tuition amounts to be carried forward for use in a subsequent year.
  • Budget 2011 made occupational, trade or professional examinations eligible for the Tuition Tax Credit. The 13-week minimum duration requirement applying to studies undertaken by Canadians at foreign universities was also reduced to 3 consecutive weeks.
  • Budget 2017 expanded the range of courses eligible for the credit to include occupational skills courses that are undertaken at a post-secondary institution in Canada, effective for the 2017 and subsequent taxation years. 
Objective – category To recognize education costs
Objective This measure provides students with tax relief by recognizing the costs of enrolling in qualifying programs or courses (Budget 1960).
Category Structural tax measure
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system. This measure extends the unit of taxation. The tax benefit from this measure can be obtained in a taxation year other than the year during which it accrues.
Subject Education
CCOFOG 2014 code 70939 - Education - College education 70949 - Education - University education
Other relevant government programs Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research and Indigenous and Northern Affairs Canada also support objectives related to education and training. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 2.4 million individuals earned this credit in 2015.

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 995 1,040 1,120 1,230 1,240 1,340 1,540 1,660
Volunteer Firefighters Tax Credit
  Value
Description Individuals who performed at least 200 hours of eligible volunteer firefighting services during a year can claim the non-refundable Volunteer Firefighters Tax Credit. The value of the credit is calculated by applying the lowest personal income tax rate to a credit amount of $3,000. An individual who performs both eligible volunteer firefighting services and eligible volunteer search and rescue services for a total of at least 200 hours in the year can claim either the Volunteer Firefighters Tax Credit or the Search and Rescue Volunteers Tax Credit. An individual who claims the Volunteer Firefighters Tax Credit is ineligible for the exemption from income that would otherwise apply to up to $1,000 of income (honoraria) received in the year for being a volunteer firefighter (see the measure "Tax-free amount for emergency services volunteers").
Tax Personal income tax
Beneficiaries Volunteer firefighters
Type of measure Credit, non-refundable
Legal reference Income Tax Act, section 118.06
Implementation and recent history
  • Introduced in Budget 2011. Effective for the 2011 and subsequent taxation years.
  • The Volunteer Firefighters Tax Credit was extended to recognize hours of eligible search and rescue volunteer service in Budget 2014.
Objective – category To achieve a social objective
Objective This measure recognizes the important role played by volunteer firefighters in contributing to the security and safety of Canadians (Budget 2011).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Tax credits are treated as deviations from the benchmark tax system.
Subject Social
CCOFOG 2014 code 70329 - Public order and safety - Fire protection services
Other relevant government programs Programs within the mandates of Canadian Heritage, Immigration, Refugees and Citizenship Canada, Transport Canada and Public Safety Canada (among other departments) also support various other social objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method T1 micro-simulation model
Projection method T1 micro-simulation model
Number of beneficiaries About 42,000 individuals claimed this credit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 15 15 20 20 20 20 20 20
Working Income Tax Benefit
  Value
Description The Working Income Tax Benefit (WITB) is a refundable tax credit that supplements the earnings of low-income workers. It is generally available to individuals 19 years of age and older not attending school full-time. The refundable credit is equal to 25% of each dollar of earned income in excess of $3,000 to a maximum credit of $1,043 for single individuals without dependants and $1,894 for families (couples and single parents) in 2017. The WITB is phased out at a rate of 15% of each dollar of adjusted net income above thresholds of $11,838 for single individuals without dependants and $16,348 for families in 2017. An additional WITB supplement of up to $521 in 2017 is provided to persons eligible for both the WITB and the Disability Tax Credit. The WITB supplement is phased out at a rate of 15% of each dollar of adjusted net income above a threshold of $18,791 for single individuals without dependants and $28,975 for families in 2017. Maximum benefit amounts and phase-out thresholds are indexed annually for inflation. Advance payment of up to 50% of the estimated WITB and WITB supplement may be available to eligible individuals upon application.

Provincial and territorial governments can propose specific changes to the design of the WITB, subject to certain conditions, including cost neutrality. As of 2017, Quebec, British Columbia, Alberta and Nunavut have introduced jurisdiction-specific WITB designs.
Tax Personal income tax
Beneficiaries Low-income employees and self-employed individuals
Type of measure Credit, refundable
Legal reference Income Tax Act, section 122.7
Implementation and recent history
  • Introduced in Budget 2007. Effective for the 2007 and subsequent taxation years (2008 and subsequent taxation years in respect of advance payments).
  • Enhanced in Budget 2009 for the 2009 and subsequent taxation years.
  • Enhanced in 2016 for the 2019 and subsequent taxation years (Department of Finance Canada news release 2016-081, June 20, 2016).
  • The 2017 Fall Economic Statement announced a further enhancement for the 2019 and subsequent taxation years, with details to be provided in Budget 2018.
Objective – category To encourage employment To provide income support or tax relief
Objective This measure makes work more rewarding and attractive for low income-earning Canadians already in the workforce, and encourages other Canadians to enter the workforce. The WITB also provides important income support to low-income working Canadians. (Budget 2007; Budget 2009)
Category Refundable tax credit
Reason why this measure is not part of benchmark tax system This measure is classified as a transfer payment for government accounting purposes, and therefore is not considered to be a tax expenditure.
Subject Employment Income support
CCOFOG 2014 code 70412 - Economic affairs - General economic, commercial, and labor affairs - General labor affairs 71099 - Social protection - Social protection not elsewhere classified
Other relevant government programs Programs within the mandate of Employment and Social Development Canada also support employment. Programs within the mandates of Employment and Social Development Canada and Veterans Affairs Canada also support income security. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data T1 Income Tax and Benefit Return
Estimation method The value of this measure corresponds to the amounts claimed as credits, as reported in administrative data.
Projection method T1 micro-simulation model
Number of beneficiaries About 1.4 million individuals received this benefit in 2015.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Personal income tax 1,100 1,180 1,165 1,160 1,180 1,180 1,180 1,430
Zero-rating of agricultural and fish products and purchases
  Value
Description Certain agricultural and fish products are zero-rated throughout the production chain, including farm livestock, poultry, bees, grains and seeds for planting or feed, hops, barley, flax seed, straw, sugar cane, sugar beets and fertilizer. Prescribed agricultural and fishing equipment, such as tractors and fishing nets, are also zero-rated. This measure relates to the zero-rating of basic groceries.
Tax Goods and Services Tax
Beneficiaries Farming and fishing businesses
Type of measure Zero-rating
Legal reference Part IV of Schedule VI to the Excise Tax Act Agriculture and Fishing Property (GST/HST) Regulations
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To achieve a social objective To provide income support or tax relief
Objective This measure is intended to improve the cash-flow position of farming and fishing businesses (Goods and Services Tax, December 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Zero-rating inputs is a deviation from the multi-stage design of the GST, whereby businesses pay tax on their inputs and then claim input tax credits in respect of inputs used in making taxable (including zero-rated) supplies.
Subject Business - farming and fishing
CCOFOG 2014 code 70421 - Economic affairs - Agriculture, forestry, fishing, and hunting - Agriculture 70423 - Economic affairs - Agriculture, forestry, fishing, and hunting - Fishing and hunting
Other relevant government programs Programs within the mandates of Agriculture and Agri-Food Canada and Fisheries and Oceans Canada also support the farming and fishing sectors. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data No data is available.
Estimation method No estimate is available.
Projection method No projection is available.
Number of beneficiaries No data is available.
Zero-rating of basic groceries
  Value
Description Basic groceries, which include the majority of foodstuffs for preparation and consumption at home, are zero-rated under the GST. A specified list of goods, such as soft drinks, candies, confections and alcoholic beverages, are not staple grocery items and are therefore taxable.
Tax Goods and Services Tax
Beneficiaries Households
Type of measure Zero-rating
Legal reference Part III of Schedule VI to the Excise Tax Act
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To achieve a social objective
Objective The zero-rating of basic groceries reflects the widely held view of Canadians that, as a general principle, basic foodstuffs should not be taxed (Goods and Services Tax: Technical Paper, August 1989).
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Zero-rating is a deviation from a broadly defined value-added tax base.
Subject Social
CCOFOG 2014 code n/a
Other relevant government programs Programs within the mandates of Canadian Heritage, Immigration, Refugees and Citizenship Canada, Transport Canada and Public Safety Canada (among other departments) also support various other social objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Supply and Use Tables and National Income and Expenditure Accounts
Estimation method Goods and Services Tax model
Projection method Goods and Services Tax model
Number of beneficiaries No data is available.

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 3,765 3,895 4,070 4,230 4,415 4,590 4,760 4,930
Zero-rating of feminine hygiene products
  Value
Description Sanitary napkins, tampons, sanitary belts, menstrual cups and other similar products that are marketed exclusively for feminine hygiene purposes are zero-rated.
Tax Goods and Services Tax
Beneficiaries Households
Type of measure Zero-rating
Legal reference Part II.1 of Schedule VI to the Excise Tax Act
Implementation and recent history
  • Budget 2016 confirmed and implemented a previous Notice of Ways and Means Motion tabled in Parliament on May 28, 2015. The relief was effective in respect of supplies made on or after July 1, 2015.
Objective – category To provide income support or tax relief
Objective This measure provides tax relief to households.
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Zero-rating is a deviation from a broadly defined value-added tax base.
Subject Families and households
CCOFOG 2014 code n/a
Other relevant government programs Programs within the mandates of Employment and Social Development Canada and Indigenous and Northern Affairs Canada also support Canadian families and households. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Supply and Use Tables and National Income and Expenditure Accounts
Estimation method Goods and Services Tax model
Projection method Goods and Services Tax model
Number of beneficiaries No data is available.

 

Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 15 35 35 35 35
Zero-rating of medical and assistive devices
  Value
Description A wide range of medical and assistive devices are zero-rated under the GST, including wheelchairs, medical and surgical prostheses, hearing and speaking aids, prescription eyeglasses and various diabetic supplies. Certain devices are zero-rated only if provided on the written order of a physician, physiotherapist, occupational therapist or registered nurse. Certain devices are zero-rated only when for use by a final consumer, but others are zero-rated whether the user is the final consumer or a health care provider.
Tax Goods and Services Tax
Beneficiaries Individuals with medical conditions or disabilities and health care providers
Type of measure Zero-rating
Legal reference Part II of Schedule VI to the Excise Tax Act
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
  • The list of zero-rated devices is periodically expanded and amended. Most recently, Budget 2016 announced that insulin pens, insulin pen needles, and intermittent urinary catheters would be zero-rated.
Objective – category To achieve a social objective
Objective This measure helps to preserve the affordability of these supplies.
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Zero-rating is a deviation from a broadly defined value-added tax base.
Subject Health
CCOFOG 2014 code 70719 - Health - Medical products, appliances, and equipment - Medical products, appliances, and equipment not elsewhere classified
Other relevant government programs Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Supply and Use Tables and National Income and Expenditure Accounts
Estimation method Goods and Services Tax model
Projection method Goods and Services Tax model
Number of beneficiaries No data is available.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 330 335 345 350 360 370 380 390
Zero-rating of prescription drugs
  Value
Description The following are zero-rated under the GST:
  • drugs that are controlled substances for which a prescription is required;
  • drugs that have been prescribed by a recognized health care practitioner;
  • certain drugs that do not require a prescription but that are used to treat life-threatening conditions; and
  • the service of dispensing a zero-rated drug.
Drugs labelled or supplied for veterinary use are not zero-rated.
Tax Goods and Services Tax
Beneficiaries Individuals with medical conditions
Type of measure Zero-rating
Legal reference Part I of Schedule VI to the Excise Tax Act
Implementation and recent history
  • This measure has been in effect since the inception of the GST in 1991.
Objective – category To achieve a social objective
Objective This measure helps to preserve the affordability of these supplies.
Category Non-structural tax measure
Reason why this measure is not part of benchmark tax system Zero-rating is a deviation from a broadly defined value-added tax base.
Subject Health
CCOFOG 2014 code 70711 - Health - Medical products, appliances, and equipment - Pharmaceutical products
Other relevant government programs Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. Additional information on the relevant Government programs is provided in the table at the end of Part 3.
Source of data Statistics Canada, Supply and Use Tables and National Income and Expenditure Accounts
Estimation method Goods and Services Tax model
Projection method Goods and Services Tax model
Number of beneficiaries No data is available.
Cost Information:
Millions of dollars 2012 2013 2014 2015 2016 (P) 2017 (P) 2018 (P) 2019 (P)
Goods and Services Tax 735 755 775 800 835 870 900 935
Table
Additional Information on Relevant Government Programs by Subject
Subject Value
Arts and culture Programs within the mandate of Canadian Heritage also support arts and culture. These include programs such as the Canada Arts Presentation Fund, the Canada Arts Training Fund and the Canada Music Fund. More information on these programs can be found in the Departmental Plans of Canadian Heritage.
Business – farming
and fishing
Programs within the mandates of Agriculture and Agri-Food Canada and Fisheries and Oceans Canada also support the farming and fishing sectors. These include programs such as the AgriStability, AgriInvest and AgriInsurance programs as well as the Catch Certification Program. More information on these programs can be found in the Departmental Plans of these organizations.
Business – natural resources Programs within the mandate of Natural Resources Canada also support the natural resource sector. These include programs such as the Green Mining Initiative, the Aboriginal Forestry Initiative, the Investments in Forest Industry Transformation program, and the Targeted Geoscience Initiative 4 program. More information on these programs can be found in the Departmental Plans of Natural Resources Canada.
Business – small businesses Programs within the mandate of Innovation, Science and Economic Development Canada also support small businesses. These include programs such as the Canada Small Business Financing Program, BizPal and Canada Business Network. More information on these programs can be found in the Departmental Plans of Innovation, Science and Economic Development Canada. The Business Development Bank of Canada, a federal Crown corporation, also provides financing and consulting services to small and medium-sized enterprises.
Business – research and development Programs within the mandates of Innovation, Science and Economic Development Canada, the National Research Council Canada and the federal granting councils also support research and development. These include programs such as the Strategic Innovation Fund, Industrial Research Assistance Program, Strategy for Partnerships and Innovation, and Centres of Excellence for Commercialization and Research. More information on these programs can be found in the Departmental Plans of these organizations.
Business – other Programs within the mandates of Global Affairs Canada, Public Services and Procurement Canada, and the regional development agencies (among other federal organizations) also offer support to Canadian businesses in various manners. These include programs such as the Canadian Trade Commissioner Service, the CanExport program and the Build in Canada Innovation program. More information on these programs can be found in the Departmental Plans of these organizations. Export Development Canada and the Canadian Commercial Corporation, two federal Crown corporations, also have mandates of facilitating and promoting international trade, notably by providing financing, market expertise and other services to Canadian businesses.
Donations, gifts, charities and non-profit organizations Many federal government entities provide direct funding to registered charities, non-profit organizations and international development associations through various programs.
Education Programs within the mandates of Employment and Social Development Canada, the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research, and Indigenous and Northern Affairs Canada also support objectives related to education and training. These include programs such as the Canada Student Loan Program and Canada Education Savings Grant, the Apprenticeship Incentive Grant and Apprenticeship Completion Grant, and the Canada Graduate Scholarships program. More information on these programs can be found in the Departmental Plans of these organizations. The federal government also provides funding to provinces and territories in support of post-secondary education through the Canada Social Transfer—see the Departmental Plans of the Department of Finance Canada.
Employment Programs within the mandate of Employment and Social Development Canada also support employment. These include programs such as the Employment Insurance program, the Labour Market Development Agreements, the Canada Job Fund Agreements (including the Canada Job Grant), the Federal Workers' Compensation Service, the Youth Employment Strategy, the Aboriginal Skills and Employment Training Strategy, and the Foreign Credential Recognition Program. More information on these programs can be found in the Departmental Plans of Employment and Social Development Canada.
Environment Programs within the mandates of Environment and Climate Change Canada, the Canadian Environmental Assessment Agency, Parks Canada and Natural Resources Canada also support environment-related objectives. These include programs related to combatting climate change, such as the Low Carbon Economy Fund and green infrastructure investments, supporting sustainable ecosystems and biodiversity, and conducting environmental assessments, as well as the Energy Innovation Program and the Marine Renewable Energy Enabling Measures Program. More information on these programs can be found in the Departmental Plans of these organizations.
Families and households Programs within the mandates of Employment and Social Development Canada and Indigenous and Northern Affairs Canada also support Canadian families and households. These include programs such as Employment Insurance maternity and parental benefits, and the Income Assistance Program and Assisted Living Program that support First Nations on reserve. More information on these programs can be found in the Departmental Plans of these organizations.
Health Programs within the mandates of Health Canada, the Canadian Food Inspection Agency, the Canadian Institutes of Health Research, the Public Health Agency of Canada and Veterans Affairs Canada also support health-related objectives. These include programs such as the Health System Priorities program, the Medical Devices program, the Federal Tobacco Control Strategy, the Healthy Child Development program, and the First Nations and Inuit Primary Health Care program. More information on these programs can be found in the Departmental Plans of these organizations. The federal government also provides long-term predictable funding for health care to provinces and territories through the Canada Health Transfer—see the Departmental Plans of the Department of Finance Canada.
Housing Programs within the mandate of Canada Mortgage and Housing Corporation are intended to promote the construction of new houses, the repair and modernization of existing houses and the improvement of housing and living conditions. The Housing program of Indigenous and Northern Affairs Canada also pursues the goal of increasing the supply of safe and affordable housing to First Nations. More information on these programs can be found in the annual report of Canada Mortgage and Housing Corporation and Departmental Plans of Indigenous and Northern Affairs Canada.
Income support Programs within the mandates of Employment and Social Development Canada and Veterans Affairs Canada also support income security. These include programs such as the Canada Pension Plan Disability and Survivor benefits, the Federal Workers' Compensation Service and the Disability Award program for veterans. More information on these programs can be found in the Departmental Plans of these organizations.
Retirement Programs within the mandate of Employment and Social Development Canada also support retirement income security. These include the Canada Pension Plan as well as the Old Age Security program. More information on these programs can be found in the Departmental Plans of Employment and Social Development Canada.
Social Programs within the mandates of Canadian Heritage, Immigration, Refugees and Citizenship Canada, Transport Canada and Public Safety Canada (among other departments) also support various other social objectives. These include programs such as the Exchanges Canada program, the Development of Official-Language Communities program, the Settlement program, the Transportation Infrastructure program and the Emergency Management program. More information on these programs can be found in the Departmental Plans of these organizations. The federal government also provides funding to provinces and territories in support of programs for children, social assistance and other social programs through the Canada Social Transfer—see the Departmental Plans of the Department of Finance Canada.
Note: Federal business innovation programs identified in this table reflect programs as they exist at the time of publication. Budget 2018 announced the future consolidation and transfer of some business innovation and clean technology programs reviewed by the Treasury Board Secretariat in undertaking the Horizontal Innovation and Clean Technology Review, in order to create a simpler program suite that better meets the needs of businesses. See the 2018 Budget Plan for further information.

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