EAS Commentary 2022 Federal Budget

Estate Planning Kelowna

On April 7, 2022, the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, presented Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable, to the House of Commons.

No changes were made to personal or corporate tax rates, nor to the inclusion rate on taxable capital gains. Some highlights include:

A. Personal Measures

  • Several proposals target housing affordability. A Tax-Free First Home Savings Account and a refundable Multigenerational Home Renovation Tax Credit will be introduced. Existing home-related tax credits will also be enhanced.
  • Residential real estate sales within a year of purchase will generally be fully taxable, not capital gains and not eligible for the principal residence exemption.

B. Business Measures

  • Access to the small business deduction will be enhanced for corporations with taxable capital between $10 million and $50 million.
  • Anti-avoidance measures targeting private corporations attempting to avoid the refundable tax regime for investment income will be introduced.
  • Tax benefits for flow-through shares will be enhanced for critical mineral exploration and removed for oil, gas and coal.

C. International Measures

  • Digital platform operators will be required to disclose details of the activities of Canadian participants in the digital economy.

D. Sales and Excise Tax

  • All new residential property assignment sales will be subject to GST/HST.
  • An excise tax regime will be introduced for vaping products.

E. Retirement Plans

  • The fair market value of RRSP and RRIF assets will be provided to CRA annually.

F. Charities Measures

  • The disbursement quota will be increased for many charities. o New rules will be introduced to allow charities to work with other organizations to fulfill their charitable objectives.

G. Previously Announced Measures

  • Intention to proceed with previously announced measures, such as the immediate expensing CCA provisions, the luxury tax, requirements for electronic interaction with CRA and a full review of the employment insurance system.