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On April 19, 2021, the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, presented Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience, to the House of Commons.

No changes were made to personal or corporate tax rates (other than a temporary measure for zero-emission technology manufacturers), nor to the inclusion rate on taxable capital gains.

Some highlights include:

A.  Personal Measures

  • The Canada Recovery Benefit and related programs will be extended.
  • Individuals will have the option to claim a deduction in respect of the repayment of a COVID-19 benefit amount for the year when the benefit was received.
  • Access to the disability tax credit will be broadened.

B.  Business Measures

  • The Canada Emergency Wage and Rent Subsidies (CEWS and CERS) will be extended.
  • The Canada Recovery Hiring Program was introduced.
  • The ability to immediately expense 100% of many capital asset purchases was introduced.
  • The corporate tax rate on zero-emission technology manufacturing will be halved.
  • The disclosure requirements for aggressive tax planning and filing positions will be expanded.

C.  International Measures

  • A 1% tax on the value of vacant or underused real estate owned by non-residents will be implemented.

D.  Sales and Excise Tax

  • Access to the GST/HST New Housing Rebate will be broadened for co-owners.
  • A new tax of up to 10% will apply to the purchase of luxury vehicles, aircrafts or boats.

E.  Electronic Filing, Payments and Certification

  • Some CRA communications will be undertaken electronically without the taxpayer’s authorization.
  • Certain levels of payments will be required to be made electronically.

F.  Previously Announced

  • Intention to proceed with a number of previously announced measures, such as the accelerated CCA changes for zero-emission vehicles, and expanded disclosure requirements for trusts.

 

To view our entire 14-page commentary of the Federal Budget, click here.

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