On December 7, 2015, Canada's new Liberal government announced that the tax rate changes promised in the Liberal platform would be effective starting January 1, 2016. Specifically, this means:
- A middle class tax reduction of 1.5% for income between $45,283 and $90,563; and
- An increase in the top tax bracket of 4% for income over $200,000.
In addition, the government also announced that the contribution limit for Tax-Free Savings Accounts will be reduced from $10,000 per year to $5,500. This means that if you have made no contributions to date, your aggregate contribution room will be $46,500 in 2016. Please see our earlier blog post. These announcements did not mention any proposals to change the taxation of stock options, which we anticipate will follow in the first Budget of 2016.
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