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The Canada Revenue Agency has announced the rates and limits which will apply for purposes of automobile-related benefits and deductions in 2020.

Most such rates and limits are unchanged, as follows:

• the general prescribed rate that is used to determine the taxable benefit of employees relating to the personal portion of automobile operating expenses paid by their employers will remain at 28 cents per kilometer;

• for purchases after 2019, the ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000; and

• the maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2019, and the limit on deductible leasing costs will remain at $800 per month.

The one change announced was an increase in the limit on the deduction of tax-exempt allowances that are paid by employers to employees who use their personal vehicle for business purposes for 2020. That figure will be increased by one cent to 59 cents per kilometre for the first 5,000 kilometres driven, and to 53 cents per kilometre for each additional kilometer.

More information on the rates and limits for 2020 is available at https://www.canada.ca/en/department-finance/news/2019/12/government-announces-the-2020-automobile-deduction-limits-and-expense-benefit-rates-for-businesses.html.

The federal government has announced the Old Age Security (OAS) and related amounts which will be paid during the first quarter (January 1 to March 31) of 2020. OAS payments are indexed quarterly to changes in the Consumer Price Index.

During the first quarter, the maximum OAS payable will be $613.53 per month. More information on OAS rates, as well as amounts payable during the quarter with respect to the Guaranteed Income Supplement and the Allowance for the Survivor can be found on the federal government website at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html.

The most recent release of Statistics Canada’s Labour Force Survey shows that employment increased by 35,000 jobs during the month of December and that the overall unemployment rate fell by 0.3%, to 5.6%.

Details of the employment picture for the month, by province, sector, and demographic group can be found in the January release of the Labour Force Survey, which is available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/200110/dq200110a-eng.htm?HPA=1&indid=3587-2&indgeo=0.

The federal government has announced that the basic personal tax credit, the spousal credit, and the eligible dependant credit amounts will increase, in four stages, from $12,298 to $15,000.

The first such increase takes effect for the current tax year, when each such credit amount increases to $13,229. That credit amount is multiplied by 15% to create a non-refundable tax credit which decreases federal tax payable for 2020 by $1,984.

The second, third, and fourth stages of the increase will take effect in 2021, 2022, and 2023, when the credit amounts will increase to $13,808, $14,398, and $15,000, respectively.

A backgrounder providing details of the current and planned changes to the credit amounts can be found on the Finance Canada website at https://www.fin.gc.ca/n19/data/19-104_1-eng.asp.

The Canada Revenue Agency (CRA) has announced the interest rates which will apply to amounts owed to and by the CRA for the first quarter of 2020, as well as the rates that will apply for the purpose of calculating employee and shareholder taxable benefits.

                                         Debit rate          Credit rate       Shareholder Benefits                            

January 1 – March 31              6%                 2% / 4%                   2%

Additional details of interest rates charged and paid by the CRA can be found on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2019/interest-rates-first-calendar-quarter.html.

The Canada Revenue Agency (CRA) formerly provided taxpayers with a listing of prescribed interest rates for leasing, with such listing including the applicable rate for the upcoming month, as well as the rates in effect for each month since 2010.

As of July 2019, the CRA no longer provides such a listing; rather, taxpayers must calculate the rate for the upcoming month using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed interest rate for leasing for the month of January 2020 will be 2.57%.

The CRA’s instructions on how to calculate the prescribed interest rate for leasing, which includes a link to the necessary bond yield information, can be found at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/leasing-costs/prescribed-interest-rates.html.

The federal government has announced the amounts which will be paid under the climate action incentive program during 2020. Such amounts are claimed when filing the individual income tax return for 2019.

The incentive will be paid to eligible residents of Ontario, Saskatchewan, Alberta, and Manitoba, and amounts paid will vary by province. More information on the amounts payable for 2020 can be found in the Finance Canada announcement, which is available at https://www.fin.gc.ca/n19/19-107-eng.asp.

Taxpayers who have not yet filed their individual income tax returns for 2018 (or the three prior years) can file those returns on NETFILE until Friday, January 24, 2020. Until that date, the Canada Revenue Agency’s NETFILE service will also accept such returns for the 2015, 2016, and 2017 taxation years.

After January 24, the NETFILE service will be unavailable for a period of several weeks, while it is re-configured for the filing of returns for the 2019 tax year.

More information on how to file a prior-year return on NETFILE can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/netfile-overview.html.

The 2019 Economic and Fiscal Update released on December 16 by the Minister of Finance shows a significant increase in the projected deficit for the current fiscal year.

In the 2019-20 Budget announced earlier this year, the deficit for the current fiscal year was projected to be $19.8 billion. Instead, the 2019-20 deficit is now expected to be $26.6 billion.

The news release for that deficit announcement, which includes a link to the full Fiscal Update, can be found on the Finance Canada website at https://www.fin.gc.ca/n19/19-106-eng.asp.

Canadians who pay income tax by instalments are required to pay the fourth and final instalment payment of 2019 on or before Monday December 16, 2019.

Taxpayers subject to the instalment payment requirement will have received an instalment reminder setting out the amount of payment to be made. That information can also be obtained using the Canada Revenue Agency’s (CRA’s) online service My Account, or by calling the CRA’s Individual Income Tax Enquiries line at 1-800-959 8281.

More information on the instalment payment requirement and how to make payments can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments.html.