Universe Business & Tax Consultants Inc. offers professional business and tax services since 1990. We handle all tax related procedures, including:

• Income taxes
  • Personal income taxes
  • Corporate taxes
• Sales taxes
• Property taxes
• Excise taxes
• Payroll taxes
• Health and Prescription Insurance Tax
• Estate tax
• International taxation

Administration of taxes in Canada

Federal taxes are collected by the Canada Revenue Agency (CRA), formerly known as “Revenue Canada” or the “Canada Customs and Revenue Agency”. Under “Tax Collection Agreements”, CRA collects and remits to the provinces:

• Provincial personal income taxes on behalf of all provinces except Quebec, so that individuals outside of Quebec file only one set of tax forms each year for their federal and provincial income taxes.
• Corporate taxes on behalf of all provinces except Quebec and Alberta.

The Ministère du revenu du Québec collects the GST in Quebec on behalf of the federal government, and remits it to Ottawa.

The provincial governments of British Columbia, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Ontario no longer impose a separate provincial sales tax and in those provinces the federal government collects goods and services tax at a rate higher than in the other provinces. The additional revenue from this Harmonized Sales Tax is paid by the federal government to the five harmonizing provinces.

History of Taxes in Canada

When the Canadian federation was formed in 1867, section 91(3) of the British North America Act attempted to create a federal government with virtually unlimited revenue gathering abilities. The federal government was entrusted with the high cost programs of the time, most notably defence and the building of railways. The provinces were given limited taxation power as they could only impose direct taxation such as property taxes and income taxes (although they also maintained control over most resource revenues as well). At the time, it was believed that the provinces had adequate revenue sources as major areas of provincial government spending today were generally not funded by the government (such as social assistance and medical care).

For the early part of Canadian history most federal government revenue came from tariffs on trade with excise taxes making up the rest of the government’s funding. The largest source of provincial funding was licenses, permits, and transfers of funds from the federal government. The first corporate taxes were introduced at the end of the nineteenth century.

A crisis developed during the Great Depression because the provinces were responsible for skyrocketing welfare costs, but could not raise enough revenue since the taxes permitted to the provinces were so dependent on the health of the economy. The federal government still had considerable revenues, however, which resulted in a system of transfer payments between the two levels of government. The transfer payments are still in place today.

The First World War had mostly been financed by traditional means, but in 1917, a tax on income was introduced as a temporary measure to fund the war. The income tax has since become a permanent feature of the Canadian tax system. The Second World War led to dramatic change in the tax system. The percentage of Canadian government revenue from indirect taxes fell from 90% in 1913 to less than 40% by 1946. Instead, Canadians began to pay income taxes and direct taxes has since provided the greatest bulk of government funding.