The Liberals have secured enough seats to form a minority government in Canada's 2021 Federal Election. With another four years in office, taxpayers can expect the Liberals to continue COVID relief programming; implement new measures to help individuals, families, and small businesses; and target big businesses and foreigners.
Crowe MacKay's tax advisors highlight what Canadian taxpayers can expect from the re-elected Liberals.
- Extended the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy until May 2022 for businesses in the tourism sector
- Extend the Canada Recovery Hiring Program until March 31, 2022
- An increase to the Eligible Educator School Supply Tax Credit to 25% (from 15%) for teachers along with an expansion of eligibility criteria.
- The implementation of a support program that provides emergency relief to out-of-work artists, craftspeople, creators, and authors
- Anti-flipping tax on the sale of residential properties which will require owners to hold property for at least 12 months before selling, with certain exemptions
- A reduction in the price charged by the Canadian Mortgage and Housing Corporation on mortgage insurance by 25% for those whose down payment is less than 20% or who have a mortgage over $1 million
- A national tax on vacant property owned by non-resident, non-Canadians, will go into effect January 1, 2022
- The introduction of a tax-free First-Time Home Savings Account which allows Canadians under 40 to save up to $40,000 towards their first home, putting their withdrawal towards their first home purchase tax free, with no requirement to repay it
- The doubling of the First-Time Home Buyer's Tax Credit from $5,000 to $10,000 which will put $1,500 of tax savings in the first-time home buyer's pocket
- A new Multigenerational Home Renovation tax credit to help families add a secondary unit to their home for immediate or extended family members. There will be a 15% tax credit for up to $50,000 in renovation and construction costs, saving up to $75,00
- The doubling of the Home Accessibility Tax Credit, to $20,000, for seniors
- The development of an investment tax credit of up to 30% for clean technologies
- Elimination of flow-through shares for oil, gas and coal projects
- A boost to clean and renewable power by doubling the Mineral Exploration Tax Credit
- A new investment tax credit for a range of renewable energy and battery storage solutions
- Grants of up-to $5,000 and interest-free loans of up to $40,000 to retrofit homes
- A new 15% tax credit to cover the cost of home appliance repair performed by technicians
Working families and individuals
- $10 per day childcare across Canada
- A Parental Sharing Benefit giving an extra five weeks of EI benefits to families where both parents agree to take time off for their new child
- The expansion of the Canada Caregiver Credit into a refundable, tax-free benefit
- A minimum tax rule that will ensure individuals who qualify for the top bracket will pay federal tax of at least 15% each year.
- A one-time income tax deduction of up to $15,000 over their first 3 years of practice for health care professionals in rural communities, who are just starting out in their careers, to help with the costs of setting up a practice.
- A national tax on vaping products
- The implementation of a tax on luxury cars, boats and planes
- A review of the access to the Disability Tax Credit, CPP Disability and other federal benefits and programs to ensure they are available to those experiencing mental health challenges
- Extend the Home Office Expense deduction for 2 years, with an increase of the deductible amount to $500
- A Career Extension Tax Credit for seniors, helping them to stay in the workforce, if desired
- A new Labour Mobility Tax Credit which will allow workers in the building and construction trades to deduct up to $4,000 in eligible travel and temporary relocation expenses
- An increase in corporate taxes for the largest, most-profitable banks and insurance companies earning more than $1 billion per year as well as the introduction of a temporary Canada Recovery Dividend these businesses will need to pay
- A review of the tax treatment of large corporate owners of residential properties who are increasingly trying to amass large portfolios of Canadian rental housing, putting upward pressure on rents.
- Small businesses can receive up to $2,400 in microgrants so they can afford the cost of new technology
- Zero-interest loans for small and medium-sized businesses to enable the adoption of new technologies
- The maximum loan under the Canada Small Business Financing Program will be increased to $500,000 with an extension of the loan coverage to 15 years for equipment and leasehold improvements
- The introduction of a tax credit to make it easier for small business to invest in better ventilation
- A new EI benefit for self-employed Canadians that would provide as much as 26 weeks of assistant
- Modernization to the General Anti-Avoidance Rule so that businesses, such as financial institutions and insurance companies, that use a tiered structure as a form of corporate tax planning cannot reduce taxes through entities in low-tax jurisdictions
- A significant Increase of the resources of the Canada Revenue Agency to combat aggressive tax planning and tax avoidance
- Collaboration with international partners to implement a global minimum tax so that large, international businesses pay taxes owed to Canada
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.