25 May Federal Budget Commentary: Previously Announced Measures
Budget 2022 confirms the government’s intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release:
- Legislative proposals relating to the Select Luxury Items Tax Act (a tax on certain automobiles, boats and aircrafts) released on March 11, 2022.
- Legislative proposals released on February 4, 2022 in respect of the following measures:
- electronic filing and certification of tax and information returns;
- immediate expensing;
- the Disability Tax Credit;
- a technical fix related to the GST Credit top-up;
- the rate reduction for zero-emission technology manufacturers;
- film or video production tax credits;
- postdoctoral fellowship income;
- fixing contribution errors in registered pension plans;
- a technical fix related to the revocation tax applicable to charities;
- capital cost allowance for clean energy equipment;
- enhanced reporting requirements for certain trusts;
- allocation to redeemers methodology for mutual fund trusts;
- mandatory disclosure rules;
- avoidance of tax debts;
- taxes applicable to registered investments;
- audit authorities;
- interest deductibility limits; and
- crypto asset mining.
- Legislative proposals tabled in a Notice of Ways and Means Motion on December 14, 2021 to introduce the Digital Services Tax Act.
- Legislative proposals released on December 3, 2021 with respect to Climate Action Incentive payments.
- The income tax measure announced in Budget 2021 with respect to Hybrid Mismatch Arrangements.
- The transfer pricing consultation announced in Budget 2021.
- The anti-avoidance rules consultation announced on November 30, 2020 in the Fall Economic Statement, with an expected paper for consultation over the summer of 2022, and legislative proposals tabled by the end of 2022.
- The income tax measure announced on December 20, 2019 to extend the maturation period of amateur athletes trusts maturing in 2019 by one year, from eight years to nine years.
- Measures confirmed in Budget 2016 relating to the GST/HST joint venture election.
Budget 2022 reiterates the government’s intention to return a portion of the proceeds from the price on pollution to small and medium-sized businesses through new federal programming in backstop jurisdictions (Alberta, Saskatchewan, Manitoba and Ontario). Budget 2022 proposes to provide funds, starting in 2022-23, to Environment and Climate Change Canada to administer direct payments to support emission-intensive, trade-exposed small and medium-sized enterprises in those jurisdictions.
Budget 2022 also reaffirms the government’s intention to revise the Employment Insurance (EI) system, including its support for experienced workers transitioning to a new career and coverage for seasonal, self-employed and gig workers. A long-term plan for the future of EI will be released after consultations conclude. As an interim measure, Budget 2022 proposes to extend previous expansions to EI coverage for seasonal workers.