New Year’s Day always brings a round of changes to laws, regulations and taxes, and 2018 brings its fair share.
One welcome change for Canadian small businesses is a drop in their tax rate to 10 per cent from 10.5.
That reduction had been promised for some time but was brought forward as the Liberal government struggled to deal with a backlash against other proposed changes, including a plan to make it harder for small business owners to sprinkle income among family members.
Those changes also take effect on Jan. 1, although the first time business owners will have to account for them is when they file their 2018 taxes in 2019.
At the federal level, there will be a slight increase in EI premiums, but the Canadian Taxpayers Federation estimates it will add only about $6 in new costs for the average worker and $13 per employee for the average employer.
The government’s new inflation-adjusted escalator to the excise tax on beer, wine and spirits also comes into effect this year, although taxes won’t actually rise until April 1.
For those who want to bring elderly parents and grandparents to Canada, 2018 brings the return of the sponsorship program that had been closed down to deal with backlogs.
Not everyone will be able to take advantage, though. Applicants have to file an “Interest to Sponsor” form to be entered in a draw. Only those randomly selected will be invited to begin the application process. Citizenship and Immigration Canada has pledged that process will be fairer and more transparent than in years past.
And, strictly speaking, this is not a New Year’s Day change. The forms only go up on the CIC website at noon ET on Jan. 2.
Provincial changes are bigger
Some of the more significant changes this year take place at the provincial level.
Ontario will see the most significant, particularly for low-income earners and young people.
As of Jan. 1, the province’s minimum hourly wage will increase from $11.60 to $14, higher than the current highest in Canada, $13.60 in Alberta.
Alberta will leapfrog ahead on Oct. 1, however, when its rate goes to $15. Ontario is scheduled to catch Alberta once again at $15 at the start of 2019.
Those changes represent a real increase in living standards for minimum wage earners in two of Canada’s biggest provinces.
Also in Ontario, people younger than 25 will no longer have to pay for medical prescriptions in 2018, and no worker will be required to present a doctor’s note to qualify for a sick day. It will be illegal for an employer to demand one.
In Alberta, the carbon tax will rise to $30 a tonne from $20.
In practice, though, many Albertans will feel little effect. At the pumps, gas will rise by only about two cents a litre, and a system of rebates is supposed to insulate families making less than $95,000. The rebates are automatically paid into Albertans’ bank accounts based on their tax filings.
New Brunswickers won’t see a government-mandated pay raise, but they will get a new paid day off. The third Monday every February will be a statutory Family Day.
People who live in Canada’s highest-taxed province will also get a break when Quebec drops its lowest income tax bracket from a 16 per cent rate to 15 per cent. And the province will give back $100 this year to families for each child aged between six and 17 to help cover back-to-school costs.
But someone making $30,000 of taxable income will still pay significantly more income tax than they would in any other province or territory.
High-income earners in B.C., on the other hand, will see an increase in their income taxes, as the province seeks to cover the cost of a 50 per cent cut to its medical services premium, effective New Year’s Day.
Some bots and beads banned, too
They’re invisible and harmful, and both are banned as of Jan. 1 — in Ontario, at least.
“Scalper-bots” are computer bots designed to block-buy large numbers of seats at concerts and other events for resale at inflated prices. They become illegal in Ontario. It will also be illegal to resell any ticket at a markup of more than 50 per cent.
Microbeads are tiny plastic balls that have long been used in shampoos, scrubs and beauty products.
They are so small they typically pass through filters designed to prevent human garbage from entering natural waterways. They have contributed mightily to the buildup of plastic in the natural environment that is interfering with the reproductive systems of fish and frogs and is poisoning birds.
Microbeads are to be banned nationwide as of Jan. 1, with a grace period to July 1 for some products.
Marijuana and carbon pricing
The two biggest changes scheduled for 2018 won’t take place on New Year’s Day.
The federal government has pledged to legalize marijuana and has set a deadline of this summer. It has also informed the provinces and territories that they must impose a price on carbon or Ottawa will impose one for them.
Both those commitments look likely to be major points of contention.