On April 19, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, released Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience, the Government of Canada’s plan to finish the fight against COVID-19 and ensure a robust economic recovery that brings all Canadians along.
“The COVID-19 recession is the steepest and fastest economic contraction since the Great Depression. It has disproportionately affected low-wage workers, young people, women, and racialized Canadians. For businesses, it has been a two-speed recession, with some finding ways to prosper and grow, but many businesses-especially small businesses-fighting to survive.” The government stated the 2021 budget is an investment in healing the economy from the COVID-19 recession.
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.
Highlights of the 2021 federal budget include:
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.
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.
International Measures
- A 1% tax on the value of vacant or underused real estate owned by non-residents will be implemented.
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.
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.
Previously Announced Measures
- 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.
Read McCay Duff’s summary of the personal, business, and international measures proposed in the 2021 budget.
For more information on this topic, please contact your McCay Duff advisor.
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