There were some important income tax changes proposed in the Feb. 18, 2003 federal budget. Among the more significant tax measures affecting individuals for the 2003 filing season were the following:

• Increasing the RRSP contribution limit to $14,500 for 2003, $15,500 for 2004, $16,500 for 2005, and $18,000 for 2006, with indexation of this limit thereafter.
  
• A phase in of the small business income tax rate for taxable income up to $225,000 in 2003 with $25,000 increments in each of the following three years.
  

During the 2003 year, the government announced it will legislate the reasonable expectation of profit test back to life. This is in response to the decision in the Stewart case. Losses from a particular source will not be deductible against income unless an individual can demonstrate that there will be a reasonable expectation of profit from that source. This proposed rule will not come in to force until 2005. However, it could still apply to situations today.

In addition, there were several other announcements of note:

• On Dec. 5, 2003 the government introduced new rules that will shut down certain charitable donation tax shelters.
  
• The taxable benefit for employees with company cars may be reduced for 2003 and later years if annual personal driving does not exceed 20,000 km (up from 12,000 km) and where the employee's business use of the vehicle is 50 per cent or more of the kilometres driven (down from 90 per cent).
  

These and other changes have been included in CAUT's 2003 Income Tax Guide, available online at http://www.caut.ca/english/publications/tax or by contacting Louise D'Anjou (danjou@caut.ca).

CAUT's 2003 tax guide was edited by Roy Williams, senior partner of Rheaume Williams Kalbfleisch in Ottawa. Although CAUT cannot pay for individual tax counselling or tax advice, individual members with such questions can contact Mr. Williams at 613-236-4500 (online www.windfall.on.ca) and take advantage of CAUT-negotiated rates.