Taxes can be a complex and confusing topic for both residents and non-residents of Canada. In this blog post, we will discuss the basics of taxes in Canada, including the difference between residents and non-residents and the different types of taxes that are applicable to each group.
Resident vs Non-Resident
The first thing to understand about taxes in Canada is the difference between residents and non-residents. A resident (or permanent resident) of Canada is someone who lives and works in Canada and is considered a Canadian for tax purposes. Non-residents, on the other hand, are individuals who do not live or work in Canada but may have income or investments in Canada.
Income tax is the primary tax that most individuals and businesses pay in Canada. The Canadian income tax system is based on a progressive tax system, which means that the more income you earn, the higher the percentage of tax you pay. For residents of Canada, income tax is based on worldwide income, which means that income earned from sources outside of Canada is also subject to Canadian income tax.
For non-residents of Canada, income tax is only applicable on income earned from Canadian sources. This includes income from employment, business, or investments in Canada. Non-residents are subject to a flat tax rate of 25% on their Canadian-sourced income, which is generally withheld at the source.
Goods and Services Tax (GST)
The Goods and Services Tax (GST) is a value-added tax that is applied to most goods and services sold in Canada. The current rate of GST is 5%. For residents of Canada, GST is included in the price of goods and services, and they are eligible to claim a credit for the GST paid on certain expenses. Non-residents of Canada may also be required to pay GST on goods and services purchased in Canada.
Canada Pension Plan (CPP)
The Canada Pension Plan (CPP) is a mandatory retirement savings plan for residents of Canada. CPP contributions are made by both employees and employers and are calculated as a percentage of an employee’s earnings, up to a maximum amount. Non-residents of Canada are not required to contribute to the CPP.
Employment Insurance (EI)
Employment Insurance (EI) is a program that provides temporary financial assistance to workers who have lost their jobs or are unable to work due to illness or injury. Like CPP, EI contributions are made by both employees and employers and are calculated as a percentage of an employee’s earnings, up to a maximum amount. Non-residents of Canada may be eligible for EI benefits if they have worked in Canada and meet certain eligibility requirements.
Conclusion
In summary, taxes in Canada can be complex, but understanding the difference between residents and non-residents and the types of taxes that apply to each group is essential. If you are a resident of Canada, you are subject to income tax on your worldwide income, while non-residents are only subject to income tax on Canadian-sourced income. Other taxes, such as GST, CPP, and EI, may also apply depending on your circumstances. It is always a good idea to consult with a tax professional to ensure that you are meeting your tax obligations and maximizing any available tax benefits.
When it comes to immigration, Canada is leading the way. In 2023, the Canadian government will be introducing a number of changes to its immigration system with the aim of welcoming more than 465,000 new immigrants. These changes will make the Canadian immigration system more efficient and effective while providing more opportunities for immigrants to come to Canada. Here are 5 of the major changes that will be taking place in 2023:
1. The Comprehensive Ranking System (CRS)
The Comprehensive Ranking System (CRS) will no longer be used to determine who is eligible for an invitation to apply (ITA) for Canadian permanent residency. Instead, the IRCC will be introducing targeted Express Entry draws to assess who is eligible for an ITA. This will help ensure that Canadian immigration is tailored to the country’s specific labour needs.
Canada is setting an ambitious immigration target of 465,000 new immigrants in 2023, 485,000 in 2024, and 500,000 in 2025. This is a significant increase from the 401,000 immigrants the country welcomed in 2020, and it is an indication of the country’s commitment to immigration.
Canada will also be introducing time-limited temporary public policies for temporary resident to permanent resident pathways, with all admissions anticipated by the end of 2023. This will help ensure that those with temporary status in Canada will have a path to permanency.
4. New travel authorization document
The USCIS is also introducing a new travel authorization document to Temporary Protected Status (TPS) beneficiaries. This will ensure that TPS recipients can travel to and from Canada as needed. This change is particularly important for those who have been living in Canada for some time, as it will allow them to stay connected to their family and friends abroad.
5. Reduce backlogs
Finally, the Canadian government is also looking to significantly reduce backlogs by 2024. This is an important step as it will help ensure that applications are processed in a timely manner and that people are not waiting for years to receive a decision on their application. The government is also investing in technology to help facilitate faster processing times and reduce backlogs. These initiatives, combined with the changes to the immigration system, will help ensure that Canada remains a top destination for immigrants.
We’ve made significant progress in reducing backlogs and modernizing our services. We’ve digitized applications, hired new employees, streamlined processes, & harnessed automation technologies to increase efficiency. Processed 2X as many applications this year – a total of 4.8M! https://t.co/AlAWt1DdSE
These changes are designed to make Canada’s immigration system more efficient and effective, while also providing more opportunities for immigrants to come to Canada. With these changes in place, the Canadian government is on track to welcome over 1.2 million new immigrants by 2023. This is an exciting time for immigrants looking to make Canada their home and take advantage of all the opportunities the country has to offer.
Invitation to Apply for Permanent Residence Canada (ITA)
If you are interested in becoming a Permanent Resident of Canada, you will need to be invited through an Invitation to Apply (ITA). This ITA is a document issued by Immigration, Refugees and Citizenship Canada (IRCC). After receiving an ITA, applicants will have the chance to apply for Canadian permanent residence and bring their accompanying family members, such as their spouse or common-law partner and any dependent children, along with them.
Step-by-step process of getting an Invitation to Apply (ITA) to immigrate to Canada:
1. Create an Express Entry profile to enter the Express Entry pool.
The first step involves submitting information about your skills, language ability, education, and work experience. If you meet the criteria for immigration to Canada, you will be placed in the Express Entry pool.
2. Receive a valid job offer from a Canadian employer or a nomination from a Canadian province or territory.
To be eligible for an Invitation to Apply (ITA), you must have a valid job offer from a Canadian employer or a nomination from a Canadian province or territory.
3. Receive a Comprehensive Ranking System score.
You will then be given a Comprehensive Ranking System (CRS) score based on the information in your Express Entry profile. The CRS score is used to rank candidates based on their skills and other factors.
4. Receive an Invitation to Apply (ITA) if your score is above the cut-off threshold score.
If your CRS score is higher than the cut-off threshold score for that specific Express Entry draw, you will receive an ITA.
5. Submit a complete application for permanent residence (APR) in your online account.
Once you receive an ITA, you will have 60 days to submit a complete application for permanent residence (APR) in your online account. This involves providing documents such as passport, language test scores, job offer letter, and more.
6. Receive a Confirmation of Permanent Residence (COPR) and/or a Permanent Residence Visa.
After your application is approved, you will receive a Confirmation of Permanent Residence (COPR) and/or a Permanent Residence Visa.
7. Live and work in Canada as a Permanent Resident.
Finally, once you have your permanent residence visa, you can travel to Canada and live and work as a Permanent Resident.
What Should You Do After You Receive an ITA
If you have received an Invitation to Apply (ITA), you have only 60 days to put together and submit all of your required supporting documents. To ensure that you’re ready to apply and make the most of the two-month period, it is important to begin collecting and organizing the necessary documents ahead of time.
In case you are unable to submit your application within the 60-day period, you will have the option to re-enter the Express Entry pool and start the process over.
How to Get an Invitation to Apply for Permanent Residence
To receive an ITA, you must first be eligible to immigrate by meeting the minimum requirements for the Express Entry pool. The Comprehensive Ranking System (CRS) score is used to assess a candidate’s eligibility.
The CRS score ranks an individual based on:
Skills
Education
Language ability
Work experience,
and other factors.
Invitations to apply (ITA) will be given to those with a minimum CRS score or higher of that specific Express Entry draw.
Be sure to fill out your profile adequately if you want your profile to have the best chance of being selected. Most importantly, your profile should contain all relevant information since it is unclear what groupings will be used.
In four months, nearly half a million applications have been reduced from the pandemic backlog
December 19, 2022 — Today, Canada’s Minister of Immigration, Refugees and Citizenship, Sean Fraser, highlighted the progress made this year, in reducing the backlog in applications in IRCC’s inventories beyond its service standards.
There is, however, a recent report suggesting that IRCC has assigned thousands of applications to inactive immigration officers. Therefore, it is believed that in an attempt to reduce this backlog, IRCC archives a record-breaking year for immigration processing.
Since August, IRCC reports that they have reduced its overall inventory by nearly half a million applications.
“The department remains on track to meet its goal to process 80% of new applications within service standards”. They added it applies “for most programs and continues to make strides in improving processing”. They are hoping this will result in shorter wait times.
As of November 30 this year, IRCC had processed over 670,000 study permits, compared to more than 500,000 during the same time period last year.
Citizenship
Canada is proud to have one of the highest naturalization rates in the world. IRCC encourages all newcomers to complete their journey by becoming Canadian citizens.
“IRCC expects a record number of new Canadian citizens in 2022–2023, with approximately 251,000 new citizens welcomed from April to November—surpassing the total number of new Canadian citizens for the last fiscal year. As a result, more than 70% of applications in the citizenship inventory are now within service standards.”
Using immigration to address labour shortages
Implementing measures to allow foreign nationals whose post-graduation work permits (expiring between September 20, 2021, and December 31, 2022) the opportunity to work in Canada for an additional 18 months, by extending their work permit or applying for a new one.
This change makes it easier for foreign-born physicians to remain in Canada allowing them to practice and bolster the healthcare system.
The Foreign Credential Recognition Program, invests approximately $27.1 million annually. The contribution to provinces and territories, regulatory bodies, and other stakeholders aims to support the labour market integration of skilled newcomers.
Making changes to the Immigration and Refugee Protection Act by selecting immigrants based on key attributes that support identified economic priorities For example educational credentials, work experience, or official language knowledge.
The Government of Canada will continue to provide monthly updates on the progress in reducing backlogs. Additionally, the steps being taken to improve client experience, reunite families and address labour shortages in Canada.
In their press release, IRCC mentions: “We know there is still more work to do”, and that they will focus “on building an immigration system that works well for newcomers, visitors, our businesses, and all Canadians.”
Immigration is critical to our economy and our communities. It’s why we have taken action to strengthen Canada’s immigration system by reducing wait times and modernizing services so they work better for everyone: https://t.co/Bw5qfuKCo5
A GCKey is required for the online submission of Canadian immigration or visa applications and is a secure way to communicate with online Canadian government services by using special electronic credentials.
GCKey is a service offered by the Government of Canada that generates login information (username and password) for use with online federal government services. If you do not have, or prefer not to utilize, a credential with one of the Sign-In Partners you can use the GCKey service.
As a result, having it is convenient and practical because you do not need to keep track of multiple usernames and passwords.
If you’ve already created an account, you can log in here. If you’re a new user, you must select “Sign up” from the Simple Secure Access menu on the right side of the screen.
The Terms and Conditions will appear after you click on the sign-up button. To proceed, click ‘I accept’.
Finally, you need to create your User Name and Password. After deciding on your username, you must select a secure password.
Important:
There must be between eight and sixteen characters in your password. It must not contain three or more consecutive characters from your Username and must at least have one upper case letter, one lower case letter, and one digit. Lastly, remember not to share your password and keep it in a safe place. Now you are all done!
Can I use the same GCKey to access several services?
Yes. You can use the same GCKey credential to access all available online services, with the exception of the CRA services. Using the same credential to access many services is convenient, as you don’t have to remember several username and passwords.
To access the CRA’s login services, you must either use one of the Sign-In Partners or register for a CRA User ID and password.
What services do I need Sign-In Partner or GCKey for?
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