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The wish lists

Globe and Mail Update

Groups across Canada know just what should be in the federal budget: a sampling ...Read the full article

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  1. Mark Dip from Canada writes: Canada should allow tax breaks for the spouses of government employees (not the employees themselves) serving overseas who are living in high cost-of-living countries. If you are a government family overseas, the normal CRA formula for residency determination is overruled. Instead, diplomatic immunity is the sole deciding factor used by CRA to declare them as “Factual Residents”. As a “Factual Resident”, overseas government families fill out a domestic tax form from overseas. This works fine for the government employees who are taxed solely to Canada and are getting overseas allowances to compensate for the high cost-of-living of the country where they are serving. Additionally, CRA has dual-tax treaties with foreign nations in order to keep getting its cut, especially from Canadians living in areas where taxes are low. However, an overseas Canadian Non-Resident will get tax breaks through these treaties if they reside in countries that have high living expenses – but only if they are classified by CRA as a “Non-Resident“. An overseas government spouse gets no such relief from either scheme owing to their CRA residency determination from their marriage to a government employee. Essentially what this means is that dual-income government families, which are common and ignored in Canada, are penalized for their two incomes by CRA when serving Canada overseas. As such, spouses are paid at the low foreign wage rate that was designed for locals (low wages because local taxes are low). However, the spouses are taxed by CRA at the high Canadian rate, leaving them with less after-tax take home pay than the janitor. This is despite having waived the Vienna Convention diplomatic immunities (a normal formality for government spouses to work in the host nation) that caused them to gain the CRA “Factual Resident” determination in the first place. The Income Tax Act was written before such immunity-waiving arrangements were designed, and has not been updated since.
  2. Bob Robert from mumbia, Canada writes: The government should offer an early retirement incentive. With all the bommers nearing retirement this would help youth and allow companies to reduce their payrolls.

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