It’s a new year! And along with getting into the habit of writing “2018” instead of “2017,” Canadians are also going to have to follow a few new laws. Some are pretty high profile — the legalization of cannabis, for example — but others haven’t really made the headlines. Here’s what you need to know about the new federal laws for 2018.
New mortgage rules
Canada’s mortgage rules are getting a lot more strict in 2018. In 2017, if you didn’t have a down payment that equalled 20 per cent of the cost of your house, you had to go through a “stress test” to make sure you could carry the debt you were taking on plus manage your mortgage if interest rates rose.
Now, in an effort to limit the amount of debt carried by consumers and financial institutions, even borrowers with a healthy down payment will have to prove they’ll be able to cope with interest rates two points higher than their contract rate.
According to the Bank of Canada, up to 10 per cent of homeowners who took out mortgages between mid-2016 and mid-2017 wouldn’t have been able to pass the stress test. If you already own a house, refinancing or renewing your mortgage could be a little more difficult if you’re close to the borrowing limit.
Legalized recreational marijuana
This is probably the new law with the most attention — not to mention controversy — but it won’t be finalized until this summer. And really, although it’s federal legislation, with Ottawa regulating marijuana production, the nuts and bolts details of how and where marijuana will be bought, sold and distributed will be left up to the provinces.
In British Columbia, for example, pot will be for sale at both public and private stores to people who are over 19 years old, with the provincial government’s liquor distribution branch overseeing warehousing and distribution. In Nova Scotia, weed will be sold at certain Nova Scotia Liquor Corp. outlets, and in Ontario, the Liquor Control Board of Ontario will be responsible for sales and distribution.
Ontario will also restrict the use of recreational marijuana to private homes. It’s also worth noting that until the law passes, recreational cannabis use and sale is still illegal.
The federal government wants all provinces and territories to impose a $10 per tonne carbon tax and if provinces don’t come up with a plan on their own, Ottawa will implement one. Consumers could see the price of home heating and gasoline rise and, potentially, grocery prices could go up as transportation gets pricier. On the upside, businesses will now have even more incentive to find ways to cut carbon emissions.
Extended parental leave
If you’re planning on taking parental leave in 2018, you can now extend 12 months of federal employment insurance over 18 months, so you won’t get more money, but you’ll be able to take six extra months. As well, new family caregiver benefits are now in place, enabling caregivers to take up to 15 weeks to care for a critically ill or injured adult, or up to 35 weeks to care for a critically ill or injured child.
Small business tax rate decreases
If you’re a small business owner, your tax rate will drop from 10.5 per cent to 10 per cent. But Ottawa has also tightened up regulations on “income sprinkling” —the ability for small business owners to lighten their tax burden by sharing their earnings with family members. EI premiums are also going up slightly.
Changes to the Citizenship Act
The federal government has made some changes to the Citizenship Act, requiring, among other changes, less residency time in the country to become a citizen, and removing the age requirement for citizenship. Dual citizens who are accused of treason, spying and terrorism will no longer be in danger of having their citizenship revoked. Instead, they’ll face the Canadian justice system just like other citizens.
Ban on microbeads
Exfoliation is great for your skin, but it can be bad for the environment. The teeny tiny plastic beads that provide exfoliation in scrubs, masks, toothpaste, and other beauty products are too small to be filtered by wastewater treatment facilities, so end up polluting our lakes and rivers. For that reason, the Environmental Protection Act has listed them as a toxic substance, and, as of January 1, their use is banned in Canada. Look for products that use natural exfoliants instead.
Return of the sponsorship program
Closed down because of a serious case backlog, the sponsorship program is back. However, the first-come, first-served system has been replaced by an immigration lottery. Potential applicants will now be entered into a draw, and will be randomly selected to begin the application process. According to the CBC, more than 95,000 people hoping to bring parents or grandparents to Canada took part in the first lottery, which only offered 10,000 spots.
Remember, this is just an overview. If you’ve got questions about how these laws might apply to a specific situation, you should chat with a specialist.