Federal Budget 2019 Employment and Payroll Related Measures

• Author: Marie-Yosie Saint-Cyr, First Reference Managing Editor
• Date: March 21, 2019

On March 19, 2019, the federal government tabled its election budget, the 2019-20 budget. The budget expects a deficit of $14.9 billion for fiscal 2018-2019 and forecasts deficits of $19.8 billion for 2019-2020 and $19.7 billion for fiscal 2020-2021. The budget does not include any personal or corporate tax rate changes; however, the budget does include measures of interest to employers and payroll (some paraphrase included):

1. Employment Insurance premium reduction

Budget 2019 will reduce the Employment Insurance (EI) premium rate to $1.61 per $100 of insurable earnings for 2020, down from the current $1.62.

2. New Canada training benefits

To help workers gain new skills, the federal government is creating new training benefits that will apply to the 2019 and subsequent taxation years and is comprised of three components, a), b) and c).

a) A non-taxable Canada Training Credit will help with the cost of tuition and training fees. This refund would be claimed when Canadians file their tax return. The refundable tax credit allows individuals to cover up to half of eligible tuition and training costs, with a $250 notional account each year and a lifetime limit of $5,000. The notional account will start for the 2019 taxation year and the credit will be available for expenses claimed for the 2020 taxation year. Earning and income thresholds under the new credit will be subject to annual indexation. Moreover,

To accumulate $250 in a year, an individual must:

• File a tax return for the year.
• Be at least 25 years old and less than 65 years old at the end of the year.
• Be a resident of Canada throughout the year.
• Have certain earnings of $10,000 or more in the year.
• Have an individual net income for the year that does not exceed the top of the third tax bracket for the year (i.e., $147,667 in 2019).

Individuals can claim a tax credit that is equal to the lesser of half of the eligible tuition and fees paid for the taxation year and the individual’s notional account balance for the taxation year. Individuals will be able to accumulate up to a maximum amount of $5,000 over a lifetime. Eligible fees include:

• Tuition fees
• Ancillary fees and charges (e.g., admission fees, exemption fees and charges for a certificate, diploma or degree)
• Examination fees

To be eligible, an educational institution in Canada must be a university, college or other institution providing courses at a post-secondary level, or an institution providing occupational-skills courses that is certified by the Minister of Employment and Social Development Canada. To deliver the Canada Training Benefit, Budget 2019 proposes investing more than $1.7 billion over five years, starting in 2019–20 and $586.5 million per year, ongoing.

b) An Employment Insurance (EI) Training Support Benefit: An Employment Insurance (EI) Training Support Benefit to provide income support during training and, with the cooperation of the provinces and territories, to offer job protection so that...