Income Tax

TaxWhen you come to Canada you do have to file a yearly income tax return.  It is under the Income Tax Act that you file a income tax return for a year in which you have tax payable. Even if you have taxes withheld from your employer or you exceed the amount of tax you owe.

Here is an article from the Canada Revenue Agency for newcomers to Canada:

The following information applies only for the first tax year that you are a new resident of Canada for income tax purposes. After your first tax year in Canada, you are no longer considered a newcomer for income tax purposes.

If you immigrate to Canada, we consider you to have acquired (deemed acquisition) almost all your properties at fair market value on the day you immigrated. If you are re-establishing Canadian residency and you had a deemed disposition when you left Canada, see Dispositions of property.

Are you a newcomer to Canada?

You become a resident of Canada for income tax purposes when you establish significant residential ties in Canada. You usually establish these ties on the date you arrive in Canada.

Newcomers to Canada who have established residential ties with Canada may be:

  • persons in need of protection;
  • people who have applied for or received permanent resident status from Citizenship and Immigration Canada; or
  • people who have received “approval-in-principle” from Citizenship and Immigration Canada to stay in Canada.

If you were a resident of Canada in an earlier year, and you are now a non-resident, you will be considered a Canadian resident for income tax purposes when you move back to Canada and re-establish your residential ties.

What are residential ties?

Residential ties in Canada include:

  • a home in Canada;
  • a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants who move to Canada to live with you;
  • personal property, such as a car or furniture; and
  • social ties in Canada.

Other ties that may be relevant include:

  • a Canadian driver’s licence;
  • Canadian bank accounts or credit cards; and
  • health insurance with a Canadian province or territory.

For more information about residency status, see Residency – Individuals or Interpretation Bulletin IT-221, Determination of an Individual’s Residence Status.

If you want an opinion about your residency status, complete and submit Form NR74, Determination of Residency Status (Entering Canada).

Your tax obligations

Do you have to file?

As a resident of Canada for income tax purposes for part or all of a tax year (January 1 to December 31), you must file a tax return if you:

  • owe tax; or
  • want to request a refund.

Even if you have no income to report or tax to pay, you may be eligible for certain payments or credits. In order to receive the following payments or credits, you must file an income tax return.

For more information, see “Do you have to file a return?” in the General Income Tax and Benefit Guide.

Which tax package?

As a newcomer to Canada, you should be aware that most individuals who reside in Canada file only one income tax return for the tax year, because the Canadian government collects taxes on behalf of all provinces and territories except the Province of Quebec.

For the tax year that you are a newcomer to Canada and for each tax year that you continue to be a resident of Canada for income tax purposes, use the General Income Tax and Benefit Package for the province or territory where you resided on December 31 of the tax year.

  • It is important to use the forms book for your province or territory because tax rates and tax credits are different in each province and territory.
  • If you live in the province of Quebec, you may need to file a separate provincial income tax return. For information about your provincial tax liability, contact Revenu Québec.

Filing due date

Generally, your income tax return has to be filed on or before:

  • April 30 of the year after the tax year; or
  • if you or your spouse or common-law partner carried on a business in Canada (other than a business whose expenditures are mainly in connection with a tax shelter), the return must be filed on or before June 15 of the year after the tax year.


A balance of tax owing must be paid on or before April 30 of the year after the tax year, regardless of the due date of the tax return.

What income must you report?

For the part of the tax year that you were not a resident of Canada

You pay Canadian income tax on Canadian source income.

For the part of the tax year that you were a resident of Canada

You have to report your world income (income from all sources, both inside and outside Canada) earned after becoming a resident of Canada for income tax purposes on your Canadian tax return.

For more information about income you have to report and credits you can ask for as a newcomer to Canada, see Pamphlet T4055, Newcomers to Canada.

Entitlement to benefits and credits

As a newcomer to Canada, you may be eligible for the goods and services/harmonized sales tax (GST/HST) credit, the Canada child tax benefit (CCTB), and the Universal Child Care Benefit (UCCB) payments in the year you became a resident of Canada.

The tipping culture in Canada

So I have been asked this  question a few times now, about the tipping culture in Canada, and so thought it would make a good article.

Note,  this is in reference to Calgary- but is similar, as far as I know,  across the country (but let me know if you have had a different experience of this)

So  the ‘servers’  (waiters and waitress’s)  get paid minimum wage and so they  ’rely’ quite heavily on their tip to top up their salary . In bars and restaurants, all food/beverage prices  that are posted don’t include ‘service’ (unlike UK where it is embedded) so… its hard to get used to having to pay it at first. Also  it is apparently ‘discretionary’ but is usually between 10 and 20% but 15% is typically the  ’usual’.  It is usually fairly easy to work out though, because the GST  (VAT equivalent) , for Alberta is 5% (again is added- not already included)- so  usually just x the GST by 3 and do that as a tip.

Note- though, that in some restaurants or bars, if it is a group of 6 or more- they often say it is minimum 15% or sometimes 18% and that it is added automatically to the bill- MOST will tell you about it when they give you the bill- but not all!!

In Taxi’s  I am not sure what the ‘expected’ is- i usually round it up to the next 0 or 5 depending on the length of journey, time etc.

At petrol pumps, some of them have full service pumps, where the guys will fill the car, wash front screen/check washer fluid etc- but note tip is NOT  required here….

For bell boys etc, if they help with luggage, I usually do $1 /piece. For other services, eg spa/beauty/hair etc I believe it is discretionary but I now use a salon with a no tipping policy, so I don’t feel quite so ‘uncomfortable’!! Note I did do some research to get a ‘Canadian’s view’ regarding Canadian tipping policies, and this is from a Bar,  in the South, called the Windsor Rose (which by the way, allows children in during the day on a Sunday- and offers a good brunch menu at the weekends too) … what it should be- and this was the response-

Tips don’t end at providing wages for just your server… the kitchen staff preparing your meals, the bartender pouring your drinks, the host greeting you at the door and expediters running your food orders all receive a portion of the gratuity you leave behind. Costs towards broken dishes and lost cutlery are also covered with gratuities. Some guests are unaware that by not leaving a gratuity, your server is actually paying to serve you at the end of the day. This is because the allocated portion to his or her colleagues is due no matter how much is left by the costumer. Tipping in Canada is calculated at 15 – 20% of the total bill. Auto-gratuities only occur on large parties to ensure the server will not suffer a large loss after service.
So as you can see, it is actually a bit more in depth than we would first think- and while it is still deemed to be discretionary, by realising the reasoning for it, and being aware that is is not included in the price of the food- hopefully  can make it a little easier and less awkward, when its time to ‘pay’!

How to prove your credit rating when you are new to Canada

Image representing Equifax as depicted in Crun...

Image via CrunchBase





Here are the directions- from a great mortage broker , about how to pull your ‘credit bureau’  from the UK, as this is a great way to prove your credit rating when you are new to Canada.

How to pull credit bureau from – UNITED KINGDOM


The UK Equifax will not allow for Canadian Equifax to pull credit bureau directly from the UK database so the UK client has to do it himself by:

Go to: www.Equifax.CO.UK – get the one you have to pay for (the free one would have to be mailed directly to an address in UK) and the one you pay for is emailed to you directly and instantly. It costs approx. 15-16 GBP and you must have current UK credit card to pay for it.

Note that Equifax may ask questions such as dates when credit cards have been issued or when mortgage in UK was obtained in order to confirm identity. To avoid delays in obtaining your credit report, please review this information before calling.

If having trouble please call the consumer bureau in Ireland at:


(They can also mail the credit bureau from this end but if doing it this way, it can take up to months to receive.)




- Gabrielle Thome

For more information please call:

Gabrielle Thome, Benefit Mortgage Brokers Corp. ph; (403) 453-0275 or or visit

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NEW to CANADA – programs for home ownership

English: mortgages Green Bay, WI

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Here is an interesting post from a mortgage broker, who has lots of experience with newcomers to Calgary.

Of course , not everyone chooses to buy a home ,as soon as they arrive- some choosing to stay in ‘long’ stay hotel suites, others rent for a while until they are familiar with the city, others choose to rent indefinitely, but with the record low interest rates at the moment, many are taking advantage and choose to jump straight in to community living and so look in to buying as soon as they arrive.

Either way, as you will see,  there are many options there for you- and it helps to discuss your options with a  mortgage broker- as soon as you feel it is something you are contemplating.

I know from experience, that my guest mortgage broker, Gabrielle, is excellent at relaying the information you require , explaining your options and keeping you fully advised, whether you plan to buy now, 6 months or anytime in the future.

Here is her Aricle for people new to Canada and programs available for home ownership.



NEW to CANADA- programs for home ownership:

This program is designed to specifically meet the unique needs for those recently new to Canada, even if they:

  • Do not have established credit or have no credit at all
  • Are not Canadian citizen


A reminder that there no longer is a firm requirement that clients must have immigrated or relocated to Canada within the last 36 months to be considered for homeownership under this program with one exception:


  • Those who are here under a valid working visa and wish to put down 5%


(after 36 months, a minimum of 10% down payment is required)






  • Clients have to have valid work permit or
  • Have landed immigrant status


Some highlights:


For purchase transactions


  • 5% minimum down payment
  • No maximum mortgage amount
  • Maximum 2 units where at least one unit must be occupied as principal residence
  • Mortgage is portable
  • Mortgage is assumable
  • Mortgages with full features are applicable
  • Best market rates and terms including fixed and variable rates mortgages.
  • Amortization options:
  • LTV > 80% up to 30 years
  • LTV < 80% up to 40 years
  • NOT available for second/vacation homes or rental properties
  • Other conditions apply


Please note that this program allows that each application be evaluated on its own merit. Please contact me if you wish to discuss a specific client or an opportunity so we can provide customized and file specific guidance.



Courtesy of Gabrielle Thome,  with Benefit Mortgage Brokers

Brits calling Canada Home

© Copyright 2010, Nolan Matthias

Purchasing a first home is an enormous financial step, and often marks the beginning of a different phase in our personal and financial lives. Imagine, then, what it’s like for new Canadians – arriving in a new country, and looking for a place they can call their own, in a country they’ve just begun to call home.

A growing number of Brits are choosing to call Canada “home”. According to Statistics Canada, more than a million new Canadians arrived between 2001 and 2006 – and that trend is expected to grow. For many of these new Canadians, purchasing a home is a top priority. If you are new to Canada, there can be some unexpected challenges, but the good news is that it is possible to find a place to call home, and there are plenty of professionals with vast experience in dealing with new Canadians.

The biggest hurdle of course is credit history. An international credit report is the first step to getting a mortgage in Canada. You can get one directly from the UK divisions of Experian ( or Equifax ( You may also be able to obtain a reference letter from a recognized financial institution in your country of origin. Even though it is not required, it is a good idea to start establishing credit in Canada as soon as you can, this can be as simple as applying for a credit card or a car loan.

There are alternative ways to demonstrate creditworthiness that several lenders will recognize. For example, a year of timely payment history of your rent (to a non-family member) confirmed by a letter from the landlord and supported by bank statements.

Additionally, 12 months of payment statements for utilities, telephone, cable, or insurance premiums, or documented savings for 12 months.

Typically, with as little as three months of employment history, you can often secure a mortgage. And if you have arrived as part of a corporate relocation, you are exempt from this requirement.

A down payment of five percent is the minimum required and, in some cases, must come from your own resources, for example, your own bank account or investments. If you are not employed, a larger down payment will be required. In addition to income and down payment confirmation, the lender will also require a valid work permit or verification of landed immigrant status.

Getting independent mortgage advice is definitely recommended. The mortgage planners at Mortgage Architects are trained to help new Canadians navigate the challenges of homeownership, and have excellent relationships with a broad range of lenders. Many of these lenders have mortgage programs that are specially designed to help new Canadians into their first homes – and to minimize the usual hurdles they face. Mortgage planners have insight into this broad range of options, and when a lender introduces or modifies a program that will benefit new Canadians, they’ll hear about it. They are well-equipped to help you with your homeownership goals.

It can be a daunting experience for a new Canadian. The system is often unfamiliar, and they often can’t count on their financial history and reputation. But Mortgage Architects has helped many new Canadians, designing a mortgage that is part of a total financial plan for them. This kind of attention and expertise can make for a great start – and a lasting difference.

Courtesy of Nolan Matthias at :

Canadian Finance 101 – Taxation – Types and Rates


Despite being one country, federally regulated to some extent, Canada is divided into Provinces or Territories each of which operates at times as a separate entity, especially with regards to Taxation, and all Government Documents and Banking.

Alberta for example differs from other provinces in the way it charges tax. Whereas the UK has VAT, in Canada these taxes are often split into a GST (General Sales Tax) and a PST (Provincial Sales Tax). GST is set by the federal government and charged across all provinces and territories. As of Oct 2011 the current GST is 5%.

Alberta does not charge PST, so residents of Alberta benefit from the lowest rates of tax. Other provinces charge PST of varying rates, and some have even created HST (a Harmonised Sales Tax in which GST and PST are combined and charged on everything including food items usually exempt from PST). British Columbia for example had a PST of 7% so when they harmonised the Taxes, goods in BC had 12% added to them for Tax (5% GST and 7% PST).

Unlike in the UK where VAT is always included in the price, taxes are always added on afterwards at the till, so be sure to allow for this when making purchases.

Additionally wage structures in North America assume that a gratuity or tip will be added to most service roles, so when paying in a restaurant assume the menu will first have tax added, and then a tip will be expected on top of this total (15% being a typical standard, with 20% representing good service).

If you have further questions feel free to email me at


Thank you- Courtesy of fellow Brit Simon Jackson at Edward Jones