Minister of Finance Joe Oliver today tabled the 2015 Federal
Budget (the "Budget"), his first budget as Minister of
Finance, entitled "Strong Leadership: A Balanced-Budget,
Low-Tax Plan for Jobs, Growth and Security".
We are pleased to provide our summary of tax measures contained
in the Budget.
The Budget proposed no changes to the general corporate income
tax rates or to the Goods and Services Tax. Federal small
business corporate tax rates will be reduced from 11% to 9% over
the 2016 to 2019 taxation years, with corresponding changes to the
dividend tax credit applicable to non-eligible dividends. The
accelerated CCA write-off for manufacturing and processing
equipment will be extended.
There are no individual tax rate or tax bracket changes in the
Budget. Beneficial tax measures impacting individuals include
an increase to the TFSA annual contribution limit to $10,000,
increased flexibility for withdrawals from registered retirement
income funds, revisions to the Family Tax Cut Credit and the
introduction of a new Home Accessibility Tax Credit. The
Budget also increases the Lifetime Capital Gains Deduction to $1
million of capital gains realized by an individual on the
disposition of qualified farm or fishing property.
International tax changes include changes to the withholding tax
regime for non-resident employers who send their non-resident
employees to work in Canada for short periods of time, proposed
streamlined reporting requirements for foreign assets owned by
Canadian residents (i.e., changes to Form T1135) and anti-avoidance
rules for captive insurance companies. The Budget also
reinforces Canada's commitment to address base erosion and
profit shifting through its participation in the OECD consultation
process and to balance tax integrity with competitiveness.
There were some favourable proposals of importance to the
charitable sector. The Budget proposes an exemption from
income tax to individual and corporate donors on capital gains in
respect of certain shares of private corporations and real
estate. As well, the Budget addresses the investment of
registered charities in limited partnerships and will allow a
registered charity to hold certain investments in limited
partnerships without the charity being considered to be carrying on
the non-permitted activity of engaging in a business.
Budgets in recent years have focused on integrity and tax
fairness measures, sometimes described as closing tax
loopholes. The Budget continues this approach, but to a
lesser extent, with the main proposed changes being modifications
to the dividend rental arrangement rules and synthetic equity
arrangements and a change relating to deemed capital gains.
Many of the proposed tax changes are scheduled to be implemented
over a number of taxation years.
From a fiscal perspective, the Budget reports an improved
budgetary balance in comparison to recent federal budgets and
economic updates. The 2015 deficit is now forecasted to be $2
Billion (compared to a 2015 deficit of $2.9 Billion that was
projected in the 2014 budget) and a budget surplus of $1.4 Billion
is now forecast for 2016 to be followed by additional surpluses in
It was hoped that the Budget would propose changes to recently
enacted legislation regarding estates and trusts as the impact of
the recent changes on individuals, estates and trusts has caused
concern among tax and estate practitioners. Unfortunately,
the Budget did not propose any relieving changes or even comment on
any review of these tax measures.
Our summary of tax highlights contained in the Budget
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The CRA provides new housing rebates for individuals who have purchased or built a new house or have substantially renovated a house or made a major addition to a house who plan on living in it personally or letting a relative live there.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).