Personal Finance » Tax

Federal budget for 2007 is now law. How does it affect you?

On Friday, June 22, budget bill C-52 received Royal Assent. This bill includes many of the proposals announced in the 2007 federal budget. Key measures included in the bill, and now law, are as follows:

  • reduced corporate income tax rate effective 2011
  • increased age credit (from $4,066 to $5,066) effective January 1, 2006
  • pension income-splitting for seniors effective 2007
  • new non-refundable child tax credit ($2,000 claim per child – good for a credit of $310 per child)
  • increase to spousal credit and amount for eligible dependents
  • increase to the age limit for maturing RRSPs (from 69 to 71)
  • increased contribution limits for RESPs increased CESGs and expanded eligibility requirements for EAPs paid to part-time students

Certain measures announced in the 2007 budget were not included in this budget bill. The excluded measures are expected to be included in a subsequent bill and will become law subject to the passing of that bill. These measures include:

  • working income tax benefit available to low-income working Canadians
  • new Registered Disability Savings Plan
  • increase to lifetime capital gains exemption (from $500,000 to $750,000)
  • extension of 15% mineral exploration tax credit (to March 31, 2008) available through the purchase of certain flow-through investments
  • elimination of capital gains tax on gifts of publicly-listed securities to private foundations
  • exemption of elementary and secondary school scholarships from federal tax

Details of bill C-52 can be found in the following link.

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