Since the 2017 Federal Budget was unveiled on Wednesday, many people have asked us what impact it will have on their finances. To help answer this question, here a few items from the 2017 Budget that may be of interest:
- There are no changes to corporate or personal income tax rates or the small business deduction threshold and no changes to capital gains taxation.
- The government did not address in the Budget a number of tax issues it has discussed since Budget 2016, indicating it will release more details on its plans to limit tax-planning strategies later this year. Concerns over potential changes to taxes, trade agreements and regulations in the United States have no doubt caused Canada’s Federal Government to reconsider its own tax strategy.
- The Budget proposes to address a range of tax loopholes and inefficiencies, including: eliminating billed-basis accounting for certain professionals, preventing tax avoidance through straddle transactions, eliminating the tax deduction for home relocation loans, applying tax-avoidance rules to RESPs and RDSPs, eliminating the additional deduction for gifts of medicine, preventing Canadian life insurers from using foreign branches to avoid tax, repealing the tax exemption for insurers of farming and fishing property, and eliminating the Public Transit Tax Credit.
- In order to advance the twin goals of reducing tax evasion and improving compliance, the government plans to give the Canada Revenue Agency an additional $523.9 million over the next five years. The government anticipates a five-fold return on its investment, hoping the CRA will recover $2.5 billion for its efforts.
We can expect to see more substantial proposals for change as the year progresses. The government has signaled that it will be looking for additional ways to prevent tax avoidance. We will continue to monitor these developments and will be updating you on any significant changes in the months to come.
If you have any questions, or if you’d like to meet with us to review your current strategies and see how best to prepare for any possible changes in 2018, please don’t hesitate to contact us at 604-534-7701 or firstname.lastname@example.org.