As you know, the Liberals were re-elected on September 20, 2021 with a minority government that has much the same composition as the 2019-2021 government. Once again the Liberals need the support of only one of the NDP, Bloc Québécois or Conservatives to pass any particular piece of legislation in Parliament.
The following are some of the tax changes we may see:
• Anti-abortion organizations to be denied charitable status
• Banks and insurance companies: surtax and “Canada Recovery Dividend” on profits over $1 billion
• Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS): extended through winter 2021-2022 for tourism industry; and Canada Recovery Hiring Program (CRHP) extended to March 31, 2022 [these changes will definitely proceed, as announced by the Department of Finance on October 21]
• Canada Financial Crimes Agency to be formed
• Canada Workers Benefit: enhancements
• Capital cost allowance: immediate expensing for Canadian-controlled private corporations of up to $1.5 million of certain investments such as software, patents and machinery
• Carbon tax and credits to be increased
• Caregiver credit to be expanded and made into a refundable credit
• Disability Benefit Act to be enacted
• Disability tax credit: comprehensive review on its application to mental health
• Flow-through shares for oil, gas and coal to be eliminated
• General anti-avoidance rule (GAAR): amendments to “focus on economic substance”, and to cover foreign tiered structures
• Health care professionals: one-time $15,000 deduction over first 3 years of practice (possibly only in rural and underserved communities)
• Home office deduction: simplified $2/day deduction to be extended through 2022 and increased from $400 to $500
• International tax:
— digital news platforms to be required to share revenues with Canadian news outlets
— global minimum tax on very large multinationals, as part of OECD project
• Investment tax credits for ventilation systems and clean technology
• Medical expense credit to include cost of reimbursements to surrogate mother for IVF expenses
• Mineral Exploration Tax Credit: doubling the credit for certain minerals
• Minimum tax of 15% for those in the top tax bracket
• Oil and gas: eliminating all tax support
• Personal tax credits (new):
— Career Extension Tax Credit
— “EI-like” system for self-employed persons, to parallel Employment Insurance
— Home Appliance Repair Credit
— Labour Mobility Tax Credit
• Residential property:
— anti-flipping tax denying principal-residence exemption on a quick sale
— ban most purchases with “foreign money” for 2 years
— curb “excessive” profits on rentals earned by large owners
— extend the tax on vacant and underused housing (see previous article) to include land in large urban areas
— First Time Home Buyer Credit to be doubled
— Home Accessibility Tax Credit to be doubled
— Multigenerational Home Renovation Credit
— Registered Home Savings Plan (First Home Savings account)
— surtax on excessive increases in residential rent following renovations
• Scientific Research credit program: reducing red tape and making the program “more generous for those companies who take the biggest risks”
• Student loans: eliminating all federal interest, and allowing new parents to pause repayment until their youngest child reaches age 5
• Tax avoidance and aggressive tax planning: more money for CRA
• Tax Court of Canada: more funding for modernization
• Teachers’ school supplies credit: increased and expanded
• Tobacco manufacturer fees imposed, and new tax on vaping products
• Workers employed by digital platforms to be treated as employees for EI and CPP purposes.
