Federal Budget Commentary 2021

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 there payment 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) willbe 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 behalved.
• 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.