With the most recent federal election resulting in a Liberal minority government, individuals and businesses should be aware of their tax-related platform proposals, as summarized in the listing below. Many are broad and lack detail, and some were previously announced by the former government.
Business items included:
– reintroducing the multi-unit rental building (MURB) tax incentive for home builders (first introduced in the 1970s);
– broadening the critical mineral exploration tax credit by expanding qualifying minerals to include critical minerals necessary for defence, semiconductors, energy and other clean technologies;
– expanding eligible activities under Canadian exploration expenses to include the costs of technical studies, such as engineering, economic and feasibility studies for critical minerals projects;
– modifying the clean technology manufacturing investment tax credit to include critical mineral mine development expenses for brownfield sites while expanding the list of priority critical minerals;
– extending the carbon capture, utilization and storage (CCUS) investment tax credit to 2035;
– reinstating the CCA accelerated investment incentive, including immediate expensing for manufacturing or processing machinery and equipment, clean energy generation, energy conservation equipment and zero-emission vehicles;
– increasing the claimable amount under the scientific research and experimental development tax incentive program (SR&ED) forCanadian companies to $6 million (from $3 million);
– establishing a Canadian patent box which, according to the costing submission made to the Parliamentary Budget Officer, would carry a tax rate that is half of the current federal corporate income tax rate on income derived from certain types of intellectual property, effective July 1, 2025;
– expanding the flow-through share regime to include certain startups, allowing investors to deduct eligible R&D expenses directly;
– reducing/removing interprovincial trade barriers and achieving mutual recognition of credentials; and
– introducing a 20% artificial intelligence (AI) deployment tax credit for small and medium-sized businesses in respect of qualifying AI adoption projects, if the taxpayer can demonstrate that the AI expenditure increases jobs.
CRA items included:
– introducing automatic tax filing, starting with low-income households and seniors;
– leveraging technology to better identify and prosecute instances of tax evasion, fix loopholes and strengthen enforcement; and
– collecting an additional $3.75 billion from increasing penalties and fines over a three-year period.
Capital gains/losses items included:
– cancelling the proposed increase to the capital gains inclusion rate, thereby retaining the 50% inclusion rate. Corporate tax items included:
– conducting a review of the corporate tax system based on the principles of fairness, transparency, simplicity, sustainability and competitiveness.
Corporate tax items included:
– conducting a review of the corporate tax system based on the principles of fairness, transparency, simplicity, sustainability and competitiveness.
Employment items included:
– expanding the labour mobility tax deduction to cover tradespeople who travel more than 120 km from their home to a job site (currently 150 km), as well as significantly increasing the per-year tax deduction limit (no amounts were provided);
– supporting workers affected by US tariffs by implementing various EI measures; and
– enhancing the EI system to better reflect the modern workforce with flexible support.
Estate planning items included:
– reducing the minimum amount that must be withdrawn from a registered retirement income fund (RRIF) by 25% for one year; and
– increasing the guaranteed income supplement (GIS) by 5%.
GST/HST items included:
– reducing GST costs for first-time homebuyers by eliminating the GST on homes up to $1 million and reducing it on homes between $1 million and $1.5 million.
Personal items included:
– reducing the marginal tax rate on the lowest tax bracket by 1%;
– reviewing and reforming the process to apply for the disability tax credit (DTC);
– introducing an apprenticeship grant of up to $8,000 for registered apprentices (it would convert to an interest-free loan if the program was not completed) in addition to the current $20,000 interest-free loan provided to apprentices; and
– introducing a refundable health care workers hero tax credit for personal support workers valued at up to $1,100 a year.
ACTION: Watch for developments in these areas! Be aware of this new incentive for first-time home buyers.
Redistribution of this material is prohibited.