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T
tariff (droit
de douane).
Customs duties on merchandise imports, levied on an ad valorem
(percentage of value) or specific basis (e.g., $5 per 100 kilograms).
Tariffs give a price advantage to similar locally produced goods and raise
revenues for the government.
See also duty remission, surtax.
tariff rate quota (contingent
tarifaire).
Two-stage tariff: imports up to the quota
level enter at a lower rate of duty; over-quota imports enter at a higher
rate.
tax base (assiette
fiscale).
The amount on which a tax rate is applied. When economists speak of the
tax base being broadened, they mean a wider range of goods, services, income,
etc. has been made subject to a tax. In the case of income tax, the tax
base is taxable income. Some kinds of income are
excluded from the definition of taxable income, such as a portion of capital
gains. In the case of sales taxes, the tax base is the value of items
that are subject to tax; basic groceries, for example, are not part of the
tax base of the goods and services tax.
tax collection agreement (accord
de perception fiscale).
Tax collection agreements enable different governments to levy taxes
through a single administration and collection agency. The federal
government collects personal income
taxes on behalf of all provinces except Quebec.
tax credit (crédit
d'impôt).
An amount deducted directly from income
tax otherwise payable. Examples include the disability
tax credit and the married credit for individuals, and the scientific
research and experimental development investment tax credit for
corporations.
See also age credit; film
or video production services tax credit; goods
and services tax (GST) credit; input
tax credit; investment tax credit;
manufacturing and processing tax credit;
pension income credit; refundable
tax credit.
tax deduction (déduction
fiscale).
An amount deducted from total income to arrive at
taxable income. Childcare expenses and capital
cost allowances are tax deductions.
See also small business deduction
tax deferral (report
d'impôt).
A deferral of income taxes from
the current taxation year to a later year. Registered
pension plans (RPPs), deferred
profit-sharing plans, registered education savings plans (RESPs) and registered
retirement savings plans (RRSPs) all provide tax deferrals. Income
contributed to an RRSP, for example, is not taxed (because of the RRSP deduction)
in the year the contribution is made. However, it is taxed in a later year
when the proceeds are withdrawn from the RRSP. Likewise, investment
income earned on the contribution is taxed at the time of withdrawal
rather than each year as it is earned. In the case of RESPs, there is no
tax deferral on the income contributed, only on the investment
earnings in the plan. For more information on RPPs and RRSPs, visit the
Canada Revenue Agency Registered
Retirement Savings Plans Web page; for more information on RESPs,
visit the Canada Revenue Agency Registered
Education Savings Plans Web page.
tax-exempt goods and services (biens
et services exonérés).
Some types of goods and services are exempt under the
goods and services tax (GST). This means that tax is not applied to
these sales. However, vendors of exempt products are not entitled to claim
input tax credits to recover the GST
they paid on their inputs to these products. Tax-exempt goods and services
include long-term residential rents, most health and dental care services,
day care services, most sales by charities, most domestic financial
services, municipal transit and legal aid services. For more
information, visit the Canada Revenue Agency Goods
and Services Tax (GST) and Harmonized Sales Tax (HST) Web page.
tax expenditure (dépense
fiscale).
Tax expenditures are foregone tax revenues, due to special exemptions, deductions,
rate reductions, rebates, credits and deferrals
that reduce the amount of tax that would otherwise be payable. Tax
expenditures include deductions for pension and registered
retirement savings plan contributions, credits for charitable
donations, and incentives for firms to invest in research and development.
Tax expenditures are often designed to encourage certain kinds of
activities or to serve other objectives, such as providing assistance to
lower-income or elderly Canadians.
For more information, visit the Department of Finance Tax
Expenditures Web page.
tax shelter (abri
fiscal).
Any investment sold on the basis
that the buyer receives accelerated deductions
or credits. Flow-through shares are
examples of tax shelters.
tax transfer (transfert
de points d'impôt).
See also a pictorial definition.
A federal tax transfer involves the federal government ceding some of
its "tax room" to provincial governments. Specifically, a tax
transfer occurs when the federal government reduces its tax rates to allow
provinces to raise their tax rates by an equivalent amount. With a tax
transfer, the changes in federal and provincial tax rates offset one
another and there is no net financial impact on the taxpayer. Tax
transfers represent a growing source of revenue for provinces since they
increase in value over time with growth
in the economy. For more information, visit the Department of Finance Federal
Transfers to Provinces and Territories Web page.
taxable capital gain (gain
en capital imposable).
The portion of capital gain
realized during the year that is required to be included in income.
This is equal to one half of the net capital
gain. If a share is bought at $26 and sold at $30, there is a capital
gain of $4. The taxable capital gain is one half of this amount, or $2. This is the amount that is included in income.
taxable income (revenu
imposable).
Net income minus certain allowable
deductions such as the northern residents
deductions. In most cases, a tax filer's taxable income will be the
same as his or her net income. However, there are a number of deductions
that could lead to a difference between a tax filer's net and taxable
income. A single individual with net income of $50,000 residing in the far
north and claiming a special residency deduction of $1,500 would report
his or her taxable income as $48,500. For general information on taxation,
visit the Canada Revenue Agency Web site.
Technology Partnerships Canada (TPC) (Partenariat
technologique Canada).
Created in 1996, TPC makes strategic investments
with companies to commercialize innovative products and processes in such
areas as the aerospace and defence industries, environmental technologies,
and enabling technologies such as manufacturing and advanced materials.
For more information, visit the Technology
Partnerships Canada Web site.
Territorial Formula Financing (formule
de financement des territoires).
Federal transfer to the territorial governments to assist them in
providing public services. The transfers are based on a formula that fills
the gap between the expenditure requirements and revenue-raising capacity
of the territories. For more information, visit the Department of Finance Federal
Transfers to Provinces and Territories Web page.
See also transfer payment.
total income (revenu
total).
For personal income tax
purposes, the sum of all income that
is potentially subject to tax. Total income includes wages, dividends, interest,
taxable capital gains, private and public pension
income, employment insurance benefits
and business income. In reporting business income, a taxpayer may deduct
expenses incurred in earning income such that total income includes only
net business income. A single individual with employment income of $50,000
and interest income of $2,000 would report, for personal income tax
purposes, total income of $52,000.
trade liberalization (libéralisation
du commerce).
Unilateral, bilateral or multilateral reductions in tariffs
and other measures that restrict world trade.
tranche (tranche).
A portion of a bond offering delineated by maturity.
transfer payment (paiement
de transfert).
Funding provided by the federal government to the provinces and
territories. The federal government provides most of its transfers by way
of five major programs: the Canada Health
Transfer, Canada Social Transfer,
Health Reform Transfer, Equalization
and Territorial Formula Financing. For more
information, visit the Department of Finance Federal
Transfers to Provinces and Territories Web page.
Treasury bill (T-bill) (bon
du Trésor).
Government of Canada T-bills are issued in denominations ranging from
$1,000 to $1,000,000. New issues are sold by public tender at a discount.
T-bills with terms to maturity of 3, 6 or 12 months are auctioned on a
bi-weekly basis, typically on Tuesday for delivery on Thursday. From time
to time, shorter-term cash management bills are also auctioned. The
difference between the purchase price and the face amount represents the
return to the investor. For more information, consult the Department
of Finance Government of Canada
Securities Web page.
trust (fiducie).
An arrangement under which money or other property is held by one
person or company, often a trust company, for the
benefit of another person or persons. These assets are administered
according to the terms of the trust agreement. Each province has a trustee
act, which regulates the kinds of investments
that can be made by the trustees of a trust fund.
See also family trust; foreign
trust.
trust company (société
de fiducie).
A financial institution that
operates under either provincial or federal legislation and conducts the
same activities as a bank. Like a bank,
it operates through a network of branches. However, because of its
fiduciary role, a trust company can administer estates, trusts,
pension plans and agency contracts, which banks cannot do.
turnover ratio (ratio
de rotation).
- Volume of securities traded as a percentage of total securities
outstanding.
Twenty-One-Year Deemed Disposition Rule (règle
de disposition réputée au bout de vingt et un ans).
A rule requiring that trust assets be treated for
tax purposes as if they were disposed of every 21 years. This measure
accompanied the introduction of capital gains taxation in 1972 to prevent
trusts from being used to avoid the taxation of capital
gains on death.
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