Bill S-215

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S-215

First Session, Thirty-ninth Parliament,

55 Elizabeth II, 2006

SENATE OF CANADA

BILL S-215

An Act to amend the Income Tax Act in order to provide tax relief

first reading, May 17, 2006

THE HONOURABLE SENATOR AUSTIN, P.C.

0603-2

SUMMARY

This enactment

(a) reduces the lowest federal income tax rate from 16% to 15%, effective January 1, 2005; and

(b) increases the basic personal amount — the amount of income that Canadians can earn without paying federal income tax — by $500 effective January 1, 2005, and makes consequential amendments to other personal amounts.

Available on the Parliament of Canada Web Site at the following address:
http://www.parl.gc.ca

1st Session, 39th Parliament,

55 Elizabeth II, 2006

senate of canada

BILL S-215

An Act to amend the Income Tax Act in order to provide tax relief

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

R.S., c. 1 (5th Supp.)

INCOME TAX ACT

1. (1) Subsection 117(2) of the Income Tax Act is replaced by the following:

Rates for years after 2004

(2) The tax payable under this Part by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, (in this subdivision referred to as the “amount taxable”) for a taxation year is

(a) 15% of the amount taxable, if the amount taxable does not exceed $35,595;

(b) $5,339 plus 22% of the amount by which the amount taxable exceeds $35,595, if the amount taxable exceeds $35,595 and does not exceed $71,190;

(c) $13,170 plus 26% of the amount by which the amount taxable exceeds $71,190, if the amount taxable exceeds $71,190 and does not exceed $115,739; and

(d) $24,753 plus 29% of the amount by which the amount taxable exceeds $115,739, if the amount taxable exceeds $115,739.

(2) Subsection (1) applies to the 2005 and subsequent taxation years.

2. (1) The portion of subsection 118(3.1) of the Act before paragraph (c) is replaced by the following:

Additions to personal credits — basic personal amount

(3.1) The amount of $7,131 referred to in paragraphs (a) to (c) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is

(a) for the 2005 taxation year, to be replaced by the amount that is the total of $500 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);

(a.1) for the 2006 taxation year, to be replaced by the amount that is the total of $200 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);

(b) for the 2007 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (a.1);

(2) The portion of subsection 118(3.2) of the Act before paragraph (c) is replaced by the following:

Additions to personal credits — spouse or common-law partner or wholly dependent person

(3.2) The amount of $6,055 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is

(a) for the 2005 taxation year, to be replaced by the amount that is the total of $425 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);

(a.1) for the 2006 taxation year, to be replaced by the amount that is the total of $170 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);

(b) for the 2007 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (a.1);

(3) The portion of subsection 118(3.3) of the Act before paragraph (c) is replaced by the following:

Additions to personal credits — net income threshold

(3.3) The amount of $606 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is

(a) for the 2005 taxation year, to be replaced by the amount that is the total of $42.50 and the amount that would be determined for that description for that taxation year in respect of the particular amount if this section were read without reference to this subsection and section 117.1 were read without reference to subsection 117.1(3);

(a.1) for the 2006 taxation year, to be replaced by the amount that is the total of $17 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (a);

(b) for the 2007 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (a.1);

(4) Section 118 of the Act is amended by adding the following after subsection (8):

Rounding

(9) If an amount determined under any of paragraphs (3.1)(a) and (a.1), (3.2)(a) and (a.1) and (3.3)(a) and (a.1) is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from two such consecutive multiples, to the greater multiple.

(5) Subsections (1) to (4) apply to the 2005 and subsequent taxation years.

Published under authority of the Senate of Canada

Explanatory Notes

Income Tax Act

Clause 1: (1) Existing text of subsection 117(2):

(a) 16% of the amount taxable, if the amount taxable does not exceed $30,754;

(b) $4,921 plus 22% of the amount by which the amount taxable exceeds $30,754, if the amount taxable exceeds $30,754 and does not exceed $61,509;

(b.1) $11,687 plus 26% of the amount by which the amount taxable exceeds $61,509, if the amount taxable exceeds $61,509 and does not exceed $100,000; and

Clause 2: (1) Relevant portion of subsection 118(3.1):

(a) for the 2006 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that year in respect of the particular amount if this section were read without reference to this subsection;

(2) Relevant portion of subsection 118(3.2):

(a) for the 2006 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that year in respect of the particular amount if this section were read without reference to this subsection;

(3) Relevant portion of subsection 118(3.3):

(a) for the 2006 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that year in respect of the particular amount if this section were read without reference to this subsection;

(4) New.

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