On March 19, 2019, Finance Minister Bill Morneau, delivered his budget speech and tabled his fourth and last budget before the federal election in October 2019. While there were no measures to increase the federal corporate and individual income tax rates or changes to the inclusion rate for capital gains, there were many measures that may affect a number of taxpayers. We set out below a few highlights from some of these tax measures. A more detailed summary of the budget announcements can be found here.
Targeted Support for First-Time Home Buyers including increasing the withdrawal limited for the RRSP Home Buyers’ Plan from $25,000 to $35,000 and introducing the First-Time Buyers Incentive. This latter initiative will allow an eligible first time home buyer to have a shared equity mortgage with the Canada Mortgage and Housing Corporation for financing a portion of their home purchase.
- An incentive to learn new skills will be introduced which is a Refundable Canada Training Credit. The credit will allow working Canadians aged 25 to 64 to accumulate $250 per year to use towards the cost of future training to a maximum amount of $5,000 over a lifetime.
- The Tax Free Saving Account (TFSA) rules will be modified so that where the activities of a TFSA constitute carrying on a business, the TFSA holder will become joint and severally liable for the tax owing on income from carrying on a business.
- An EI Small Business Premium Rebate will be introduced where EI premiums are equal to or less than $20,000 per year.
- Zero-emission vehicles will become more affordable with a federal purchase incentive of up to $5,000 for electric battery or hydrogen fuel cell vehicles for Canadian who want to make a switch to such vehicles. An additional temporary incentive will allow immediate expensing of a range of zero-emission vehicles used by businesses.
- The stock-option deduction for executives of large, long-established corporations will be limited with a $200,000 cap.
- Measures to assist in the crack down on people who break the tax rules will be enhanced through additional funding.
- The Scientific Research and Experimental Development Program will be modified to eliminate the phase out of the annual $3 Million expenditure limit based on taxable income.
- Lastly incentives to support Canadian journalism were announced and will include a new temporary non-refundable tax credit related to certain digital news subscriptions.
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