CD 2007-011: Information Notice to Employees

Tax Changes -- Effective July 1, 2007

The purpose of this Information Notice to Employees is to provide you with information relative to the tax legislation changes that are effective July 1, 2007.

The federal and four provincial budgets contained changes to the respective tax legislation which will be effective July 1, 2007.

Federal personal tax credits

The spouse or common-law partner amount and the amount for an eligible dependant will be increased from $7,581 to $8,929 effective July 1, 2007. The Personal Tax Credits Return (TD1) form will be revised effective July 1, 2007 to include these changes.

A new Child tax credit of $2,000 has been introduced and will be effective July 1, 2007. The TD1 form will be revised effective July 1, 2007 to include this tax credit on line 2.

Provincial Tax Brackets, Rates and Tax Credits Effective July 1, 2007

New Brunswick

The following table provides the changes to the New Brunswick tax rates effective July 1, 2007.

New Brunswick Tax Brackets and Rates

Tax brackets and rates effective January 1, 2007		Tax brackets and rates effective July 1, 2007
Tax brackets	Tax rates	Tax brackets	Tax rates
More than - Not more than		More than - Not more than
$0 to $34,186	9.68%	$0 to $34,186	10.56%
$34,186 to $68,374	14.82%	$34,186 to $68,374	16.14%
$68,374 to $111,161	16.52%	$68,374 to $111,161	17.08%
Over $111,161	17.84%	Over $111,161	18.06%

The current tax rate of 9.68% that is used to calculate the provincial non-refundable tax credits amounts will increase to 10.56% effective July 1, 2007.

British Columbia

The following table provides the changes to the British Columbia tax rates effective July 1, 2007.

British Columbia Tax Brackets and Rates

Tax brackets and rates effective January 1, 2007		Tax brackets and rates effective July 1, 2007
Tax brackets	Tax rates	Tax brackets	Tax rates
More than - Not more than		More than - Not more than
$0 to $34,397	6.05%	$0 to $34,397	5.35%
$34,397 to $68,794	9.15%	$34,397 to $68,794	8.15%
$68,794 to $78,984	11.7%	$68,794 to $78,984	10.5%
$78,984 to $95,909	13.7%	$78,984 to $95,909	12.3%
Over $95,909	14.7%	Over $95,909	14.7%

The current tax rate of 6.05% that is used to calculate the provincial non-refundable tax credits amounts will decrease to 5.35% effective July 1, 2007.

The provincial tax reduction for British Columbia has changed and is calculated as follows: Where the net income is less than or equal to $16,646, the premium is equal to the lesser of (i) basic provincial tax, and (ii) $375; Where the net income is greater than $16,646 and less than or equal to $28,364.75 (formerly $27,062.67), the premium is equal to the lesser of (i) basic provincial tax, and (ii) $375 - [(Annual net income - $16,646) × 3.2% formerly 3.6%)]; Where the net income is greater than $28,364.75, the premium is equal to $0.

Prince Edward Island

The following table provides the changes to the Prince Edward Island tax brackets effective July 1, 2007.

Prince Edward Island Tax Brackets and Rates

Tax brackets and rates effective January 1, 2007		Tax brackets and rates effective July 1, 2007
Tax brackets	Tax rates	Tax brackets	Tax rates
More than - Not more than		More than - Not more than
$0 to $30,754	9.8%	$0 to $31,984	9.8%
$30,754 to $61,509	13.8%	$31,984 to $63,969	13.8%
Over $61,509	16.7%	Over $63,969	16.7%

The provincial surtax payable for Prince Edward Island has changed and is calculated as follows:

Where the basic provincial tax payable is less than or equal to $12,500 (formerly $5,200), the surtax payable is equal to $0.

Where the basic provincial tax payable is greater than $12,500 (formerly $5,200), the surtax payable is 10% of the basic provincial tax payable in excess of $12,500.

The following table provides the changes to the Prince Edward Island tax credit amounts effective July 1, 2007.

Prince Edward Island Personal Tax Credit Amounts

	Current amount	Amount effective July 1, 2007
Basic personal amount	$7,412	$7,708
Age amount	Maximum of $3,619	Maximum of $3,691
Tuition and education amounts (full-time)	$200	$400
Tuition and education amounts (part-time)	$60	$120
Spouse or common-law partner amount	Maximum of $6,294	Maximum of $6,420
Amount for an eligible dependant	Maximum of $6,294	Maximum of $6,420

The Prince Edward Island Personal Tax Credits Return (TD1PE) form will be revised to include these changes.

Newfoundland and Labrador

The following table provides the changes to the Newfoundland and Labrador tax brackets and rates effective July 1, 2007.

Newfoundland and Labrador Tax Brackets and Rates

Tax brackets and rates effective January 1, 2007		Tax brackets and rates effective July 1, 2007
Tax Brackets	Tax rates	Tax Brackets	Tax rates
More than - Not more than		More than - Not more than
$0 to $29,590	10.57%	$0 to $30,182	8.7%
$29,590 to $59,180	16.16%	$30,182 to $60,364	13.8%
Over $59,180	18.02%	Over $60,364	16.5%

The current tax rate of 10.57% that is used to calculate the provincial non-refundable tax credits amounts will decrease to 8.7% effective July 1, 2007.

Effective July 1, 2007, Newfoundland and Labrador's surtax of 9% will be eliminated.

The following table provides the changes to the Newfoundland and Labrador tax credit amounts effective July 1, 2007.

Newfoundland and Labrador Personal Tax Credit Amounts

	Current amount	Amount effective July 1, 2007
Basic personal amount	$7,410	$7,558
Age amount	Maximum of $3,482	Maximum of $3,552
Disability amount	$5,000	$5,100
Spouse or common-law partner amount	Maximum of $6,055	Maximum of $6,177
Amount for an eligible dependant	Maximum of $6,055	Maximum of $6,177
Caregiver amount	$2,353	$2,401
Infirm dependant amount	$2,353	$2,401

The Newfoundland and Labrador Tax Credits Return (TD1NL) form will be revised to include these changes.

All pay systems will be programmed to automatically reflect the new federal spouse or common-law partner amount.

All pay systems will be programmed to automatically reflect the new provincial tax rates and brackets for payments dated on or after July 1, 2007.

All pay systems will be programmed to automatically reflect the new Prince Edward Island and Newfoundland and Labrador basic personal amount and spouse or common-law partner amount.

If you wish to change any of your personal tax credit amounts at source that are not automatically programmed as mentioned herein, you must complete a federal and/or provincial TD1 form. These forms are available at District Taxation Offices and 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, you 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.

Any request for information regarding the foregoing should be addressed to your compensation advisor.