Connect with us

Opinion

Budget 2019 – Don’t spend your new Canada Training Credit just yet

Published

6 minute read

On March 19, 2019, the federal government tabled its election-year budget. One of the new provisions is a refundable credit called the Canada Training Credit. However, the $250 credit won’t even be available until you file your 2020 income tax return in April of 2021.

Further, if you are born in 1995 or later, you won’t qualify yet. If you were born in 1954 or earlier, you would never be eligible.

In addition, the maximum benefit you can receive is $5,000 in a lifetime (which will take 20 years to get at $250 a year) and the benefit can only be used to a maximum of 50% of eligible tuition costs.

So let’s consider the following scenario:

It is 2019 – you are 25 years of age making $27,000 a year and file your taxes every year.

You decide to take advantage of this credit and enroll in your first semester of schooling in the fall of 2023.
According to Statistics Canada, the average Canadian undergraduate pays $3,419 per semester.

So, you take time off work to go to school full-time in the fall, thus reducing your income by 1/3 in the year to $18,000.

Under the current 2019 rules, you would only have $39 in federal income tax. This amount is low because the tuition credits reduce your taxes.

By 2023, you have built up a “pool” of $250 per year after you turned 26, and believe you have a $1,000 pool available for that year.

When you file your 2023 return the $1,000 is triggered as a refundable tax credit. But you won’t be getting $961 back ($1,000 – 39).

Here’s the catch:

The $1,000 pool reduces the amount you can claim for tuition credits as well, which changes the tax owing to $189 Federal income tax. Meaning the $1,000 pool that you waited for is reduced by 15% by the time you pay it out.

Cash in jeans: $811.

But what if the course you decided to go into begins in January of 2023? You go for the January-April semester, work from May-August, and attend school September-December.

Using the same $27,000 – your income is now reduced by 2/3 while attending full time. Your income is only $9,000 as a result of the May-August period.

Your tuition (possibly paid through student loans) is $6,838 for the year.

Your tax is now zero because even before tuition credits you are below the Basic Personal Amount in your earnings.

Does this mean you get the full $1,000?

No.

Because your income is less than $10,000 in 2023, you don’t get the $250 for that year. As such, you only get $750, and your tuition credits available for carryforward are reduced by $750 as well, thus having a future negative impact on tax of $112.50.

Net result: $637.50 cash in jeans

What if you are a parent that decides to stay home with the kids until they are in school full time and go back to school in 2023?
Unfortunately, because you did not make more than $10,000 a year in any of the years, you get zero.

What if you were laid off, collecting regular EI benefits, and decide to go back to school?
Regular EI Benefits don’t qualify for the $10,000 income calculation. As a result, unless you had special EI benefits like parental leave or earned income from another source greater than $10,000, you don’t qualify.

What if you were self-employed through a small business corporation and paid yourself dividends instead of wages and then decided to upgrade your training?
Your dividend income does not qualify, and so you are not eligible for amounts to be added to the pool.

So assuming you qualify, and you wait the four years to build up a pool of $1,000 (remember that the $1,000 is only a net $850 because of the reduction in tuition credits). That same Statistics Canada report says that tuition is increasing at 3.3% per year. That means by you waiting four years so you can get the Net $850 means your annual tuition has likely increased from $6,838 to $7,786 ($948).

You waited four years, and the tax amount you receive won’t even cover the inflationary price increase on tuition.

In Conclusion

  • Those that do qualify won’t see anything until April 2021; the actual net amount of what they will see is only $212.50; and their annual tuition will likely have increased by $225.65.
  • Students under the age of 25 will see nothing;
  • People over the age of 25 that don’t have more than $10,000 of income will see nothing;
  • Seniors will see nothing;
  • Parents looking to re-enter the workforce will see nothing; and
  • People who have been laid off and have less than $10,000 of non-EI income will see nothing.

Seems like a lot of complex legislation for nothing.


Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

Follow Author

Business

UN plastics plans are unscientific and unrealistic

Published on

News release from the Coalition of Concerned Manufacturers and Businesses of Canada

“We must focus on practical solutions and upgrading our recycling infrastructure, not ridiculous restrictions that will harm our health care system, sanitary food supply, increase costs and endanger Canadians’ safety, among other downsides.”

This week Ottawa welcomes 4,000 delegates from the United Nations to discuss how they will oversee a reduction and even possible elimination of plastics from our lives. The key problem is no one has ever figured out how they will replace this essential component of our modern economy and society. The Coalition of Concerned Manufacturers and Businesses of Canada (CCMBC) has launched an information campaign to discuss the realities of plastic, how it contributes massively to our society and the foolishness of those who think plastics can be eliminated or greatly reduced without creating serious problems for key industries such as health care, sanitary food provision, many essential consumer products and safety/protective equipment, among others. CCMBC President Catherine Swift said “The key goal should be to keep plastics in the economy and out of the environment, not eliminate many valuable and irreplaceable plastic items. The plastics and petrochemical industries represent about 300,000 jobs and tens of billions contribution to GDP in Canada, and are on a growth trend.”

The UN campaign to ban plastics to date has been thwarted by reality and facts. UN efforts to eliminate plastics began in 2017, motivated by such terrible images as rivers with massive amounts of floating plastic and animals suffering from negative effects of plastic materials. Although these images were dramatic and disturbing, they do not represent the big picture of what is really happening and do not take into account the many ways plastics are hugely positive elements of modern society. Swift added “Furthermore, Canada is not one of the problem countries with respect to plastics waste. Developing countries are the main culprits and any solution must involve helping the leading plastics polluters find workable solutions and better recycling technology and practices.”

The main goal of plastic is to preserve and protect. Can you imagine health care without sanitary, flexible, irreplaceable and recyclable plastic products? How would we keep our food fresh, clean and healthy without plastic wraps and packaging? Plastic replaces many heavier and less durable materials in so many consumer products too numerous to count. Plastics help the environment by reducing food waste, replacing heavier materials in automobiles and other products that make them more energy-efficient. Many plastics are infinitely recyclable and innovations are taking place to improve them constantly. What is also less known is that most of the replacements for plastics are more expensive and actually worse for the environment.

Swift stated “Environment Minister Steven Guilbeault has been convinced by the superficial arguments that plastics are always bad despite the facts. He has pursued a campaign against all plastics as a result, without factoring in the reality of the immense value of plastic products and that nothing can replace their many attributes. Fortunately, the Canadian Federal court overturned his absurd ban on a number of plastic products on the basis that it was unscientific, impractical and impinged upon provincial jurisdiction.” Sadly, Guilbeault and his Liberal cohorts plan to appeal this legal decision despite its common-sense conclusions. Opinion polls of Canadians show that a strong majority would prefer this government abandon its plastics crusade at this point, but history shows these Liberals prefer pursuing their unrealistic and costly ideologies instead of policies that Canadians support.

The bottom line is that plastics are an essential part of our modern society and opposition has been based on erroneous premises and ill-informed environmentalist claims. Swift concluded “Canada’s record on plastics is one of the best in the world. This doesn’t mean the status quo is sufficient, but we must focus on practical solutions and upgrading our recycling infrastructure, not ridiculous restrictions that will harm our health care system, sanitary food supply, increase costs and endanger Canadians’ safety, among other downsides.” The current Liberal government approach is one that has no basis in fact or science and emphasizes virtue-signaling over tangible and measurable results.  Swift noted “The UN’s original founding purpose after World War II was to prevent another world war. Given our fractious international climate, they should stick to their original goal instead of promoting social justice warrior causes that are unhelpful and expensive.”

The CCMBC was formed in 2016 with a mandate to advocate for proactive and innovative policies that are conducive to manufacturing and business retention and safeguarding job growth in Canada.

SOURCE Coalition of Concerned Manufacturers and Businesses of Canada

Continue Reading

Opinion

The Climate-Alarmist Movement Has A Big PR Problem On Its Hands

Published on

 

From the Daily Caller News Foundation

By David Blackmon

The whole “net-zero by 2050” narrative that cranked up in earnest in early 2021 has now become a public relations problem for the climate-alarm movement, according to a senior official at the United Nations.

Chris Stark, the outgoing chief executive of the UN’s Climate Change Committee (CCC), said as reported by the Guardian: “Net zero has definitely become a slogan that I feel occasionally is now unhelpful, because it’s so associated with the campaigns against it. That wasn’t something I expected.”

As seems to always be the case among the globalist sponsors of this government-subsidized rush to saddle the world with unreliable power grids and short-range electric cars, the conversation among the leaders of the movement immediately moves not to perhaps reconsidering the approach to address public concerns, but to rejiggering the narrative. Stark recommends shifting the label and the narrative to more of a focus on investment and how renewables and EVs somehow improve energy security.

“We are talking about cleaning up the economy and making it more productive – you can call that anything you like,” he said.

That would be a neat trick, inventing a narrative about benefits that don’t really exist. But it wouldn’t be the first time it’s been tried.

At last November’s COP 28 conference, UN Secretary General Antonio Guterres floated the term “climate collapse” as a new name for what the climate alarmists have successively called “global warming,” “climate change,” “climate crisis,” and “climate emergency.” Each successive label has been replaced as its cache’ with the public has faded; and apparently the whole “climate emergency” has lost its punch, so another fright narrative must be concocted.

The trouble there, of course, is that the climate is not collapsing. But then again, it isn’t in any sort of an emergency, either, or a crisis.

The climate is always changing, though, so at least the long-abandoned “climate change” label had the ring of truth to it. Maybe let’s go back to that and try to deal with something that is at least a real thing? But, no, that would cut down on the alarm and make it harder for political leaders to enact bad “solutions” and subsidize them with debt combined with skyrocketing utility bills for average citizens.

So, as Stark says, call it anything you want, just so long as it is alarming. Stark’s boss at the UN, Guterres, used the term “global boiling” to describe the current climate situation. So, maybe we change “net-zero by 2050” to “no bubbles by 2050.” That would at least have the advantage of some semblance of consistent thought.

A colleague suggested that we simply change the problematic label to “Stone Age,” since that is where we are heading if the alarmists continue to get their way. She has a point.

The most amazing thing about Stark’s concerns is that anyone is really surprised that “net-zero by 2050” has become a problematic term. How else would officials at the UN and other governments expect the public to react to what has become the umbrella label for a set of authoritarian government actions that have destabilized power grids, caused the cost of living to rise rapidly, reduced consumer choice, and begun to rob citizens in nominally “free” countries of their individual rights?

The central problem today with this climate change narrative is that it has gone on for so long that is has become a bit of a joke with an increasingly aware and skeptical public. And the reason they’re skeptical is not due to any disbelief in science, as the alarmists invariably claim, but because they have seen nothing but bad outcomes and personal deprivations from the alleged solutions being subsidized into existence.

Stark assures us that, “the lifestyle change that goes with this is not enormous at all,” but painful results to date tell another story.

If Stark were truly thoughtful and serious about wanting to deal with the increasing unpopularity of the “net-zero by 2050” construct, he would suggest that everyone take a step back and re-evaluate the nature and effectiveness of the solutions being pushed.

By merely advocating for the concoction of yet another shift in the narrative, a troublesome lack of sincerity is laid bare.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Continue Reading

Trending

X