As part of the roll-out of the federal budget, our team of experts provides you with a summary of the measures.
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to read it in its entirety. To make your day-to-day life easier, don’t hesitate to contact us with any questions you may have.
Federal budget measures affecting corporations
The 2021 Budget proposes to grant a temporary immediate tax deduction for certain capital assets acquired by a Canadian-controlled private corporation (hereinafter “CCPC”). That is, a CCPC will be able to write off 100% of the cost of a capital asset in the year of acquisition, up to a maximum of $1.5 million per taxation year.. The $1.5 million limit must be shared between companies in an associated group. The eligible deduction would only be available for the year in which the property becomes available for use.
You can also read more about the Red Bucket and the credit enhancement for the creation of apprenticeship jobs for skilled tradespeople. That’s right, the government has announced a credit enhancement for job creation. Credit of up to $5,000 for initial costs (such as salaries and training) for the first year of apprenticeship.
In addition, thehe 2021 federal budget proposes to reduce tax rates for companies involved in the manufacture of zero-emission technology. For eligible companies:
- Income taxed at the general 15% rate would be subject to a 7.5% tax.
- Income taxed at the 9% small business rate would be subject to a 4.5% tax for eligible manufacturers.
Read our complete summary
to understand the measures concerning capital cost allowance for clean energy generation equipment and tax debt avoidance.
Measures relating to covid-19
For companies
These programs were due to end on June 5, 2021. However, the 2021 budget proposes a further extension, i.e. until September 25, 2021 with the possibility of additional eligibility periods until November 20, 2021. Of course, this will depend on the economic and health situation.
A new obligation for listed companies will also be introduced. These companies will be required to reimburse any wage subsidy amounts they may have received for an eligibility period following June 5, 2021, in the event that the total compensation of executive officers for the 2021 calendar year has increased relative to 2019. More details on the changes to the SSUC and SUCL will be available soon.
The 2021 federal budget introduced a new program: the economic recovery hiring program. The aim of this new measure is to encourage eligible employers to hire new employees. A subsidy of up to 50% of additional compensation paid to eligible employees between June 6 and November 20, 2021 is available.
To read our full summary, please consult our PDF document here.
For private customers
In February 2021, the government extended the number of weeks of PCRE and PCREPA by 12 weeks. The maximum number of benefit weeks is therefore increased to 38 weeks.
The federal budget proposes to add 12 weeks of benefits to the TPP. Benefits for the 39th to 42nd weeks will remain at $500 per week. Benefits would then be reduced to less than $300 per week for the 43rd to 50th weeks.
In terms of the tax treatment of benefit amounts for COVID-19, it will be possible, once the amount has been reimbursed only, to claim a deduction in the year the income was received rather than in the year of reimbursement .
To read our full summary, please consult our PDF document here.
International tax measures
Limitations on interest deductibility, hybrid arrangements, transfer pricing and mandatory disclosure. This is what the 2021 federal budget says about its impact on international taxation.
A fuller summary awaits you in our PDF document here.
Expected changes: sales and excise taxes
The government has announced the introduction of a tax on the retail sale of certain luxury goods from January 1, 2022. The goods concerned are :
- new luxury cars costing more than $100,000 ;
- new personal aircraft costing more than $100,000; and
- new boats costing more than $250,000.
The government is also proposing to amend the Customs Act to simplify the payment process for commercial imports. This includes the possibility of correcting errors made in good faith without incurring penalties or interest.
Finally, the application of GST/HST to e-commerce is reiterated by the government, which had announced in October 2020, wishing certain supplies of digital services and products to be taxable from July 1, 2021.
If any of these points are of particular interest to you, we invite you to
download our PDF document
for further reading. You can also contact our experts directly.
