1. Limit will still be 18% of earned income in prior year.




	Annual Limit	Earned Income Prior Year
2003	$14,500	$ 80,500
2004	15,500	86,111
2005	16,500	91,700
2006	18,000	100,000



2. Thereafter the annual limit will be indexed to rise with inflation.



3. The RRSP maximum has been adjusted and deferred numerous times in the past.

MAXIMUM PENSION LIMITS INCREASED TO $2,000

1. Employer-sponsored registered plan limits will increase from the current $1,722 per year of service, rising to $2,000 in 2005.



2003	$1,722
2004	1,833
2005	2,000



2. After 2005, the limit is indexed to growth in the average wage, as is the case with the CPP.

EMPLOYMENT INSURANCE

1. In 2004 the rate will decrease to $1.98 per $100.00 of insurable earnings from $2.10 in 2003.



2. The annual savings for an individual at the maximum of $39,000 will be $47.

SMALL BUSINESS LIMIT INCREASED TO $300,000

1. The amount eligible for the low federal corporate income tax rate of 12% is:
   

   2003	$225,000
   2004	250,000
   2005	275,000
   2006	300,000

LARGE CORPORATIONS TAX

1. The capital tax for corporations with "taxable capital" now starts at $10 million taxable capital.



2. In 2004 the level will be increased to $50 million.



3. The tax rate of 0.225% will be reduced:

   2003	0.225%
   2004	0.200%
   2005	0.175%
   2006	0.125%
   2007	0.0625%
   2008	0.0%

AUTOMOBILE STANDBY CHARGE

1. The standard charge of 2% per month of the original cost of the vehicle remains.



2. Starting in 2003 the standby charge may be reduced if:
   
   (a) personal driving is not over 20,000 km. annually
   (b) personal driving is less than 50% of total km. driven



3. For 2003 and subsequent years, example:
   
   

   (a)	total km personal standby charge	40,000 15,000 15,000 = 75% of standby charge 20,000

   (b)	total km personal standby charge	40,000 10,000 10,000 = 50% of standby charge 20,000

EXTENDED CAB PICKUP TRUCK

1. Pickup trucks and vans having a seating capacity for not more than a driver and two (2) passengers are excluded from the definition of automobile if they are used primarily (over 50%) for the transportation of goods or equipment in the course of gaining or producing income.



2. Such vehicles having a greater seating capacity may be excluded if they are used 90% or more for business.

DISABILITY TAX CREDIT (DTC)

1. This has long been a question of what disability level qualifies for the DTC.



2. This credit is intended to provide tax relief for those who, due to the effects of a severe and prolonged impairment, require extensive therapy to sustain a vital function, or are blind or otherwise markedly restricted in their ability to perform a basic activity of daily living.



3. The basic activities of daily living for determining eligibility for the DTC are perceiving, thinking and remembering, feeding and dressing oneself, speaking, hearing, eliminating bodily waste and walking.



4. Eligibility will include individuals who are markedly restricted in either feeding or dressing themselves.

ELIGIBLE EXPENSES FOR THE MEDICAL EXPENSE TAX CREDIT

1. For 2003 the Federal credit is 16% of qualifying medical expenses in excess of the lesser of $1,755 or 3% of net income.

RELIEF FOR PARENTS OF DISABLED CHILDREN

1. The new child disability benefit will provide up to $1,600 per year to families burdened with costs of transportation, special equipment and drug costs that are not covered by the health care system.



2. The full $1,600 benefit per child will be paid to families with incomes less than $33,487 for 2003.



3. For those making more money, the benefit will be reduced according to the same formula used for the national child benefit.



4. The payments will commence in March 2004, but will be retroactive to July 2003.

OTHER PROPOSALS

• More money for health care



• To increase the National Child Benefit Supplements



• Rollover of RRSP for dependent children



• Expansion of capital gains for small business investors



• Reduction of income tax rate on resource income



• Mineral exploration tax credit



• Expansion of accelerated capital cost allowance deduction for more efficient use of renewable and alternative energy sources



• Increases in tobacco tax



• Reduction in airport security tax



• Extra funds over 3 years for 4,000 university scholarships for graduate study



• Increases in military budget



• Money for cities



• A new national enforcement unit to fight white-collar crime

For further information visit the government's website at www.fin.gc.ca

The information herein is provided for your general information and action should not be taken on the basis of this budget memo, but only on the advice of your own individual advisor, applying this advice to your individual situation. Please call if you have any questions.