Finances Nation 2009
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Finances oF the nation 2009 a review of expenditures and revenues of the federal, provincial, and local governments of canada KaRIN tReFF DeBoRAH oRt Publishing History Finances of the Nation, annual review of the expenditures and revenues of the federal, provincial, and local governments of Canada (1995 to 2009). The National Finances, annual analysis of the revenues and expenditures of the government of Canada (1955-56 to 1988-89, 1990 to 1994). Provincial and Municipal Finances, biennial review of the revenues and expenditures of the provincial and local governments of Canada (1971 to 1991). Provincial Finances, biennial review of the revenues and expenditures of the provincial governments of Canada (1963 to 1969). Tax Memo series. Periodic reviews of the revenues and expenditures of the local and provincial governments of Canada (pre-1963). All publications listed above may be found in the Canadian Tax Foun- dation’s library (contact the librarian, Judy Singh, at [email protected]), and many are available for sale at reduced prices (contact the Publications Distribution Department at [email protected]). Issues of Finances of the Nation from 2002 to 2008 are also available online at www.ctf.ca. Photocopying and Reprinting. Permission to photocopy any part of this publication for distribution or to reprint any part must be applied for in writing to Michael Gaughan, Permissions Editor, Canadian Tax Foundation, 595 Bay Street, Suite 1200, Toronto, Canada M5G 2N5 (Facsimile: (416) 599-9283; e-mail: [email protected]). Disclaimer. The material contained in this publication is not intended to be advice on any particular matter. No subscriber or other reader should act on the basis of any matter contained in this publication without con- sidering appropriate professional advice. The publisher, and the authors and editors, expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything and of the consequences of anything done or omitted to be done by any such person in reliance upon the contents of this publication. ISBN 978-0-88808-234-3 © 2010 Canadian Tax Foundation Foreword The Canadian Tax Foundation’s annual series examining the tax and spend- ing activities of Canada’s three levels of government continues with Finances of the Nation 2009. Finances of the Nation, which first appeared in 1995, amalgamated two previous Foundation publications, The National Finances and Provincial and Municipal Finances. The 2002 to 2005 editions were published both electronically and in hard copy. Since 2006, Finances of the Nation is published in hard copy only. The inclusive format of Finances of the Nation is designed to facilitate the reader’s understanding of the interrelationships between the three levels of government. We have used the most current information available at the time of writing. We wish to thank the many local, provincial, and federal government officials who provided the information that made the preparation of this pub- lication possible. Thanks also to Diane Gula, who edited the manuscript for publication and prepared the index. As always, we welcome readers’ com- ments on this edition, as well as any suggestions for future editions. Karin Treff and Deborah Ort December 2009 xxxxx Contents Page Foreword ................................................... iii List of Tables ............................................... xv 1 The Structure of Canadian Government ..................... 1:1 Organization of Canadian Governments ....................... 1:1 Federal Government .................................... 1:1 Provincial/Territorial Governments ........................ 1:3 Local Governments..................................... 1:4 Newfoundland and Labrador ........................... 1:5 Prince Edward Island................................. 1:6 Nova Scotia ........................................ 1:6 New Brunswick ..................................... 1:7 Quebec............................................ 1:7 Ontario............................................ 1:8 Manitoba .......................................... 1:9 Saskatchewan....................................... 1:10 Alberta ............................................ 1:10 British Columbia .................................... 1:11 Northwest Territories................................. 1:12 Nunavut ........................................... 1:13 Yukon ............................................. 1:14 2 Summary of Budgets ..................................... 2:1 Federal Budgetary Position ................................. 2:1 The January 27, 2009 Federal Budget ...................... 2:1 Tax Changes........................................ 2:1 Provincial/Territorial Budgetary Positions ..................... 2:6 Newfoundland and Labrador .............................. 2:6 Tax Changes........................................ 2:6 Prince Edward Island ................................... 2:7 Tax Changes........................................ 2:8 Nova Scotia........................................... 2:8 Tax Changes........................................ 2:9 New Brunswick........................................ 2:10 Tax Changes........................................ 2:10 Quebec............................................... 2:12 Tax Changes........................................ 2:12 Ontario............................................... 2:14 Tax Changes........................................ 2:15 Manitoba............................................. 2:18 Tax Changes........................................ 2:18 Saskatchewan ......................................... 2:20 Tax Changes........................................ 2:20 Alberta............................................... 2:21 Tax Changes........................................ 2:21 British Columbia ....................................... 2:22 Tax Changes........................................ 2:23 Northwest Territories ................................... 2:25 Tax Changes........................................ 2:25 vi CONTENTS Nunavut.............................................. 2:25 Yukon ............................................... 2:26 3 Taxes on Individuals ..................................... 3:1 Personal Income Taxes..................................... 3:1 Number of Taxpayers and Taxes Paid ...................... 3:1 Federal Personal Income Tax System....................... 3:4 Types of Income..................................... 3:4 Tax Rates.......................................... 3:6 Federal Tax Credits and Deductions..................... 3:7 Alternative Minimum Tax............................. 3:10 Indexation.......................................... 3:10 Provincial/Territorial Personal Income Tax Systems........... 3:11 Newfoundland and Labrador ........................... 3:11 Prince Edward Island................................. 3:14 Nova Scotia ........................................ 3:14 New Brunswick ..................................... 3:16 Quebec............................................ 3:17 Ontario............................................ 3:19 Manitoba .......................................... 3:20 Saskatchewan....................................... 3:22 Alberta ............................................ 3:24 British Columbia .................................... 3:24 Northwest Territories................................. 3:26 Nunavut ........................................... 3:26 Yukon ............................................. 3:27 Combined Federal and Provincial Tax Rates................. 3:27 Succession Duties and Gift Taxes ............................ 3:28 Health Insurance Premiums................................. 3:28 Other Revenue ........................................... 3:29 4 Taxes on Business ........................................ 4:1 Corporate Income Taxes ................................... 4:1 Federal Corporate Income Tax System...................... 4:3 Tax Rates.......................................... 4:3 Tax Credits......................................... 4:3 Provincial Corporate Income Tax Systems................... 4:3 Agreeing Provinces .................................. 4:6 Quebec............................................ 4:10 Alberta ............................................ 4:11 Combined Federal and Provincial Rates..................... 4:12 Non-Resident Tax ........................................ 4:12 Capital Taxes............................................ 4:12 Federal Capital Taxes................................... 4:12 Provincial Capital Taxes................................. 4:12 Payroll Taxes ............................................ 4:16 5 Sales and Other Taxes .................................... 5:1 Sales Taxes.............................................. 5:1 Federal Goods and Services Tax ........................... 5:1 Zero-Rated Goods ................................... 5:2 Exempt Goods ...................................... 5:3 GST Rebates........................................ 5:3 CONTENTS vii Low-Income Tax Relief............................... 5:4 Provincial/Territorial Retail Sales Taxes.................... 5:4 Exempt Goods ...................................... 5:6 Services and Utilities ................................. 5:8 Municipal Access to Sales Taxes........................ 5:8 Federal and Provincial Sales Tax Harmonization.............. 5:9 Excise Taxes and Duties ................................... 5:9 Tobacco Taxes .......................................