The Small Business Investment Grant helps Prince Edward Island’s small businesses improve efficiency and innovation by way of a non-repayable financial contribution toward eligible capital asset costs.
The P.E.I. government introduced the Small Business Investment Grant in its 2018 budget. This new 15% rebate on up to $25,000 of qualifying capital investments in the improvement of a business will save an eligible business up to $3,750.
Eligible capital assets must be purchased between April 6, 2018, and March 31, 2019 from an arm’s length supplier. An application can include the purchase of multiple qualifying assets up to the $25,000 threshold. If a business receives non-repayable support from any other program for the purchase of an eligible asset, then that asset will not qualify for the grant.
The grant is available to unincorporated and incorporated businesses operating on P.E.I. The business must be registered federally or provincially. The business must have at least one employee (minimum of 560 hours) or it must be the primary source of income for the applicant. A person who owns or controls multiple qualifying businesses can only receive a grant for one business per year. A business that is eligible for this grant and for Innovation PEI’s Capital Acquisition program may only apply to one program per year.
The following types of business are not eligible for the grant; fishers, farmers, not-for-profit organizations, banks and financial companies, realty businesses (including landlords and developers), professional services business, and consulting services business.
Subject to approval by Innovation P.E.I., the reasonable and proper costs of a capital asset will be eligible for the grant. The following costs are specifically excluded.
- allocated cost or value of goodwill;
- any portion of the cost of an asset that, in the opinion of Innovation PEI, exceeds the fair market value of the asset;
- HST or any other federal or provincial tax which may be eligible to be fully or partially refunded;
- intangible assets;
- development costs;
- speculative land acquisitions;
- vehicle acquisitions; and
- capitalized carrying costs.
The application for the grant must be submitted to Innovation P.E.I. through their on-line application system at https://cloud.garago.net/?siteid=innovationpei The complete terms and conditions of the grant are available at https://cloud.garago.net/terms.cfm Innovation P.E.I. staff are available to assist with the application process.
There is a limited budget for the grant. Applications for the grant will be processed on a first come first served basis. An application for the grant will not be considered received until all required information is submitted.
P.E.I. 2018 Budget
On April 6, 2018, Honourable Heath MacDonald, Minister of Finance presented the Prince Edward Island budget for 2018-19. The budget includes reductions to personal income tax and corporate income tax, a sales tax rebate, an increase in bursaries for Island post-secondary students, and additional help repaying student loans for students who reside on P.E.I. after they graduate.
Personal Income Tax
The Basic Personal Amount is the amount that Islanders do not have to pay P.E.I. income tax on. The Basic Personal Amount is increasing by $500 for 2018, and for 2019. The new Basic Personal Amount will be $8,560 for 2018 and $9,160 for 2019. This change will save Islanders $49 in 2018 and $98 in 2019 compared to their 2017 income tax.
The Spouse/Common Law Spouse tax credit and Eligible Dependent/Equivalent to Spouse tax credit give a tax savings to Islanders whose spouse or eligible dependent has no income or low income. The base used to calculate these P.E.I. tax credits is also increasing for 2018 and 2019. The increase will be proportionate to the increase in the Basic Personal Amount.
Corporate Income Tax
The P.E.I. corporate tax rate for income eligible for the small business deduction will be reduced by 0.5% from 4.5% to 4.0% for this fiscal year. The reduction will be prorated if a company's taxation year straddles the effective date of the change. A company whose taxation year starts on or after the effective date will be able to save up to $2,500. A further unspecified reduction in the small business tax rate was promised for the future.
In the budget address, the Minister said: "The dividend tax credit will also be adjusted to preserve the integration between the corporate and personal income tax systems." This means that the personal income tax rate on dividend income will be increased so that the total corporate and personal income tax collected on income earned through a company remains roughly the same as it was before the reduction in the small business tax rate.
Beginning on May 1, 2018, eligible Island businesses will be able to apply for the new Small Business Investment Grant. This new 15% rebate on up to $25,000 of qualifying investments in the improvement of a business will save an eligible business up to $3,750. Details of who will be eligible and what types of expenditures will qualify are expected to be released soon. You can find additional information about the grant on the Province's website as it becomes available.
A new Clean Energy Price Incentive will begin on July 1, 2018. It will be a point of sale rebate equivalent to the provincial portion of the HST. It will apply to the first block of residential electricity (the first 2,000 kwh consumed per month), firewood, wood pellets, and propane. The Province estimates average annual savings on residential electricity of $120 per household. Households with high electricity consumption (e.g. homes with heat pumps) could save up to $25 per month.
Support for Island Students
Island students earning their first degree at UPEI or Maritime Christian College, or their first diploma at Holland College or Collège de l’Île will be eligible for the new Island Advantage Bursary. Students completing a four-year degree will receive up to $3,600 during their studies. Students completing a two-year diploma will receive up to $1,200. This is in addition to the amounts they are eligible to receive under the existing George Coles Bursary, Island Student Award, Island Skills Award, and George Coles Graduate Bursary.
Additional support will be available to Island students who have a greater financial need. A student attending a P.E.I. publicly-funded post-secondary institution who meets the income requirements for the Canada Student Grant will be eligible for an additional Island Advantage bursary.
Island students are eligible for a grant of up to $2,000 per year of study towards the repayment of their P.E.I. student loans under P.E.I.'s existing Debt Reduction Grant Program. Beginning with the 2018-19 academic year, Island students who reside in P.E.I. within three years of graduation will be eligible for up to $1,500 per year of study of additional grants.
The Province continues to negotiate with the Federal government on a framework for the taxation of cannabis, and a carbon plan to deal with the Federal government's intention to implement carbon taxes in all provinces and territories.
The following information was made available by the Canada Revenue Agency:
If you bought or sold your home or plan to buy or sell a home soon, the Canada Revenue Agency (CRA) has information to help you.
Principal residence exemption
Did you know that any profit–called capital gain–on the sale of your principal residence may be exempt from taxes? Generally, you do not have to pay tax on a capital gain when you sell your home if it was your principal residence for all the years that you owned it.
If you sold a property that was your principal residence, you must report the sale and designate the property as your principal residence on Schedule 3 of your income tax and benefit return. You must also fill in the appropriate sections of Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Trust). Only one property can be designated as a principal residence per tax year per family unit.
Home buyers' amount
Eligible home buyers can claim $5,000 on line 369 of Schedule 1 of their income tax and benefit return for the acquisition of a qualifying home in 2017.
You may qualify for the home buyers' amount if you did not live in another home owned by you or your spouse or common-law partner in 2017 or in any of the four preceding years. You do not have to be a first-time home buyer if you are eligible for the disability tax credit or you acquired the home for the benefit of a related person who is eligible for the disability tax credit.
Home Buyers' Plan
You may be eligible to participate in the Home Buyers' Plan. This plan lets you withdraw funds from your registered retirement savings plan to buy or build a qualifying home for yourself. You can withdraw up to $25,000 in a calendar year, and you have up to 15 years to repay the amounts you withdraw.
To qualify for the Home Buyers' Plan, you have to meet these two conditions:
- you are a first-time home buyer
- you have a written agreement to buy or build a qualifying home for yourself
You are considered a first-time home buyer if, in the preceding four-year period, you did not live in a home that you or your spouse or common-law partner owned.
You must intend to live in the qualifying home as your principal residence within one year of buying or building it.
Home Buyers' Plan for persons with disabilities
You do not have to be a first-time home buyer to participate in the Home Buyers' Plan if you are eligible for the disability tax credit or if you are helping a related person who is eligible for the credit buy or build a home. The purchase or construction must be done to allow a person with a disability to live in a home that is more accessible or better suited to their needs.
GST/HST rebate on new homes in Canada
If you constructed or substantially renovated a house for use as your primary place of residence, you may also be eligible for this rebate.
For more information on the GST/HST new housing rebate, refer to guide RC4028, GST/HST New Housing Rebate.
Home accessibility expenses
If you are a qualifying individual (65 years of age or older at the end of 2017 or eligible for the disability tax credit) or an eligible individual claiming certain tax credits for a qualifying individual, you may be able to claim eligible expenses paid for renovations that make your dwelling more accessible.
The Canada Revenue Agency (CRA) has a few tips that could save you time and money. At tax time, try to remember these eight things:
1. Do your taxes
Even if you didn’t receive any income in 2017, you may still get a tax refund and be eligible for benefit and credit payments. For example, families who are eligible for the Canada child benefit (CCB) can receive up to $6,400 annually for each child under the age of 6 and up to $5,400 annually for each child aged 6 to 17. You, and your spouse or common-law partner, if you have one, have to do your taxes every year so the CRA can calculate how much you could receive, and to continue receiving your benefit and credit payments without any interruptions. This includes payments such as the GST/HST credit and related provincial payments, the guaranteed income supplement, and advance payments of the working income tax benefit.
If you want to do your taxes yourself, the CRA has a step-by-step guide that makes doing your taxes easy.
2. Make sure you claim tax credits and deductions
There are tax credits and deductions you may be able to claim on your return, like the working income tax benefit. Not sure what tax credits and deductions you may be eligible for? Go to canada.ca/taxes-get-ready to learn about the new and existing tax measures that could help you save money.
3. Report all your income
Make sure you report all your income. You should have most of your slips, such as T4 slips, from your employer, payer, or administrator by the end of February. If you have not received, or you lost or misplaced, a slip for 2017, ask the issuer of the slip for a copy. If you register with My Account, you may have access to online copies of your slips. If you are still missing information, use your pay stubs or statements to estimate your income to report. Keep all of your documents in case we ask to see them later.
Some income you earn may not be included as part of a tax slip. Tips, money earned providing accommodations, and ride sharing, regularly selling stuff at a flea market or online, providing tutoring services, handy-man or snow removal services – all of this is considered income that must be reported.
Did you sell your principal residence in 2017? If so, you have to report basic information on your return to claim the principal residence exemption.
If you already did your taxes but did not report all of your income or deductions, use the ReFILE service in your NETFILE software to change your return, visit an EFILE service provider to Refile, or use the “Change my Return” service in My Account. You can also change your return with Form T1-ADJ, T1 Adjustment Request, and mail it to your tax centre.
For more information, please visit How to Change Your Return.
4. Make valid claims
Make sure you know what you can and cannot claim. Sometimes non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home designated as a principal residence, and other similar amounts, are claimed by mistake.
If the CRA finds that you made a mistake or made a claim in error, it will change your return. For a list of the most frequent changes the CRA makes, see Common adjustments.
5. File on time
If you have a balance owing and do not file your return on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your balance owing on the due date of your return, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Even if you cannot pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time.
If you cannot pay the amount you owe by the due date, it’s best to contact the CRA before then. The CRA will work with you to resolve your tax debt or other CRA program debt. You may be eligible for a payment arrangement or taxpayer relief.
If you receive benefit payments, like the Canada child benefit, and you did not do your taxes on time, your payments can be delayed or stopped.
If you have never filed a return or haven’t filed for a few years, the CRA can help. You may be eligible for relief of interest, penalties, and prosecution by applying to the Voluntary Disclosures Program.
6. Keep receipts and records
Keep your receipts and other supporting documents for at least six years from the end of the tax year to which the records relate.
Sometimes returns are reviewed to make sure that income, deductions and credits are correctly reported. If the CRA reviews your return, having your receipts and records on hand makes it easier for you to support your claims. For more information, see Responding to the CRA.
The above information was made available on the Canada Revenue Agency (CRA) website on March 14th, 2018.