ARCHIVED CD 2008-014

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June 4, 2008

SUBJECT: Tax Changes -- Effective July 1, 2008

1. Purpose

1.1 The purpose of this directive is to provide clients with information relative to the tax legislation changes that are effective July 1, 2008.

1.2 A notice of information to employees concerning the above subject has been included with this Compensation Directive.

2. BACKGROUND

2.1 The following provincial and territorial budgets contained changes to the respective tax legislation which will be effective July 1, 2008.

2.2 The explanations in this directive will help compensation advisors provide information to individuals concerning the factors that may cause changes to their pay cheques.

3. POLICY

3.1. Provincial and Territorial Tax Brackets, Rates and Tax Credits Effective July 1, 2008

British Columbia

The following table provides the changes to the British Columbia tax rates effective July 1, 2008.

British Columbia Tax Brackets and Rates
Tax brackets and rates effective January 1, 2008 Tax brackets and rates effective
July 1, 2008
Tax brackets Tax rates Tax brackets Tax rates
More than - Not more than   More than - Not more than  
$0 to $35,016 5.35% $0 to $35,016 5.13%
$35,016 to $70,033 8.15% $35,016 to $70,033 7.81%
$70,033 to $80,406 10.5% $70,033 to $80,406 10.5%
$80,406 to $97,636 12.29% $80,406 to $97,636 12.29%
Over $97,636 14.7% Over $97,636 14.7%

The current tax rate of 5.35% that is used to calculate the provincial non-refundable tax credits amounts will decrease to 5.13% effective July 1, 2008.

Newfoundland and Labrador

The following table provides the changes to the Newfoundland and Labrador tax rates effective July 1, 2008.

Newfoundland and Labrador Tax Brackets and Rates
Tax brackets and rates effective January 1, 2008 Tax brackets and rates effective
July 1, 2008
Tax Brackets Tax rates Tax Brackets Tax rates
More than - Not more than   More than - Not more than  
$0 to $30,215 8.7% $ 0 to $30,215 7.7%
$30,215 to $60,429 13.8% $30,215 to $60,429 12.8%
Over $60,429 16.5% Over $60,429 15.5%

The current tax rate of 8.7% that is used to calculate the provincial non-refundable tax credits amounts will decrease to 7.7% effective July 1, 2008.

Alberta

The following table provides the changes to the Alberta tax credit amounts effective July 1, 2008.

Alberta Personal Tax Credit amounts
  Current amount Amount effective
July 1, 2008
Disability amount Maximum of $7,466 Maximum of $12,466
Caregiver amount Maximum of $4,355 Maximum of $9,355
Amount for infirm dependants age 18 or older Maximum of $4,355 Maximum of $9,355

The Alberta Personal Tax Credits Return (TD1AB) form will be revised to include these changes.

Saskatchewan

The following table provides the changes to the Saskatchewan tax credit amounts effective July 1, 2008.

Saskatchewan Personal Tax Credit amounts
  Current amount Amount effective
July 1, 2008
Disability amount Maximum of $7,021 Maximum of $8,190
Caregiver amount Maximum of $4,095 Maximum of $8,190
Amount for infirm dependants age 18 or older Maximum of $4,095 Maximum of $8,190

The Saskatchewan Personal Tax Credits Return (TD1SK) form will be revised to include these changes.

Nunavut

The following table provides the changes to the Nunavut tax credit amounts effective July 1, 2008.

Nunavut Personal Tax Credit amounts
  Current amount Amount effective
July 1, 2008
Pension income amount $1,000 $2,000
Tuition, education and textbook amounts (full-time) $400 $465
Tuition, education and textbook amounts (part-time) $120 $140

The Nunavut Personal Tax Credits Return (TD1NU) form will be revised to include these changes.

4. PROCEDURES/INSTRUCTIONS

4.1 All pay systems will be programmed to automatically reflect the new provincial tax rates for payments dated on or after July 1, 2008.

Employees who wish to change any of their personal tax credit amounts at source that are not automatically programmed as mentioned herein must complete a federal and/or provincial TD1 form. These forms are available at District Taxation Offices or on the Internet at the following address:

Federal and provincial (other than Quebec) TD1 forms
TD-e

To change personal tax credit amounts at source for the province of Quebec, employees are to complete a Source Deductions Return (TP1015.3-V) form. This form is available from the ministère du Revenu du Québec (MRQ) and on the Internet at the following address:

TP-1015.3-V

5. INQUIRIES

5.1 Any inquiries on the information contained in this document should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.



Original Signed by
B. Fortin

Brigitte Fortin
Director General
Compensation Sector
Accounting, Banking and Compensation


Reference(s): CJA 9007-11-15 and 9007-11-1