CP images / Sean Kilpatrick
Melissa Shin
The federal Liberals’ re-election means many of their proposals from the 2021 budget and earlier are likely to remain in play. Here’s a look at the status of major tax promises made since the 2019 budget:
| Source | Proposal/Promise | Status |
|---|---|---|
| 2019 federal budget (March 19) |
Raise guaranteed income supplement ceiling to $5,000 | Passed June 21, 2019, in Bill C-97 |
| Increase the RRSP withdrawal limit for the Home Buyers’ Plan | Passed June 21, 2019, in Bill C-97 | |
| Permit advanced life deferred annuities and variable payment life annuities | Passed June 29, 2021, in Bill C-30 | |
| Reform individual pension plan rules so an IPP can’t be implemented simply to avoid taxes on the commuted value of benefits from another defined-benefit plan | Passed June 29, 2021, in Bill C-30 | |
| Enact a $200,000 threshold on stock options | Passed June 29, 2021, in Bill C-30 and took effect July 1 | |
| Change taxation affecting ETFs and mutual funds (e.g., allocation to redeemers) | Passed June 29, 2021, in Bill C-30. Mutual fund changes are retroactive to March 19, 2019. For ETFs, changes won’t apply to tax years that begin before Dec. 16, 2021. Bill C-30 broadened that deferral to include mutual fund trust ETFs created after Budget Day, 2019. The investment industry is awaiting specific rules for ETFs | |
| Provide relief for RDSP-holders who lose eligibility for the disability tax credit (DTC) | Passed June 29, 2021, in Bill C-30 | |
| 2019 election promise |
Raise CPP survivor’s benefit by 25% | This promise was reiterated in the Liberals’ 2021 election platform. Watch for updates after Parliament resumes sitting on Nov. 22 |
| Increase basic personal amount (BPA) to $15,000 by 2023, with the increase clawed back for high earners | Enacted via a Notice of Ways and Means on Dec. 9, 2019, and in Bill C-30. The BPA was raised to $13,808 (2021) from $13,229 (2020). Increase is clawed back between $151,978 and $216,511 of federal net income (2021) | |
| Increase Canada Child Benefit (CCB) by 15% for kids younger than one years old; make EI maternity and parental benefits tax-exempt | No progress. This promise was not mentioned in the Liberals’ 2021 election platform. In 2021, the maximum CCB benefit is $6,833 per child younger than six, up from $6,765 in 2020. The EI maternity and parental benefits remain taxable | |
| Double the child disability benefit | No progress. This promise was not mentioned in the Liberals’ 2021 election platform. The benefit is up to $2,915 for the period of July 2021 to June 2022 for each child who is eligible for the disability tax credit, up from $2,886 the year prior | |
| Boost old age security by 10% for those aged 75+ | Passed June 29, 2021, in Bill C-30. Takes effect July 2022 | |
| Enact a luxury tax of 10% on new cars and aircraft costing more than $100,000 and on new boats costing more than $250,000. The tax would be calculated as the lesser of 20% of the value above the thresholds and 10% of the full value | A consultation on this tax, which is to come into force on Jan. 1, 2022, ended Sept. 30, 2021 | |
| 2020 speech from the throne (Sept. 23) |
Enact a new Canadian disability benefit modelled on the guaranteed income supplement |
The Canada Disability Benefit was introduced in Bill C-35 on June 22, 2021, but the legislation died when Parliament rose. Watch for updates after Parliament resumes sitting on Nov. 22 |
| Revamp the EI system | This promise was reiterated in the Liberals’ 2021 election platform, at which time the party pledged to create a new EI benefit for self-employed Canadians and to “move forward with a stronger and more inclusive EI system that addresses gaps made obvious during Covid-19.” Watch for updates after Parliament resumes sitting on Nov. 22 | |
| Permit free, automatic tax returns for simple situations | No progress. This promise was not mentioned in the Liberals’ 2021 election platform | |
| 2021 federal budget (April 19) |
Expand DTC eligibility in the areas of mental functions and life-sustaining therapy | Not included in Bill C-30 and requires fresh legislation |
| Examine raising charities’ disbursement quota, which currently is 3.5% | Consultation ended Sept. 30 | |
| Impose an annual 1% tax on the value of non-resident, non-Canadian-owned residential real estate that is considered to be vacant or underused |
Not included in Bill C-30. Finance’s consultations ended Sept. 17, with legislation required for the tax to take effect Jan. 1, 2022 | |
| 2021 election promise | Raise the corporate income tax rate for banks and insurers to 18% from 15% on all earnings above $1 billion. These financial services institutions also would have to contribute to a Canada Recovery Dividend | Watch for updates after Parliament resumes sitting on Nov. 22 |
| Develop a minimum tax rule to ensure that top earners (those earning more than $216,511 in 2021) pay at least 15% per year (the tax rate currently paid by people earning less than $49,000), thus “removing their ability to artificially pay no tax through excessive use of deductions or credits” | ||
| Double the Home Buyers’ Amount to $10,000 from $5,000 | ||
| Introduce a tax-free First Home Savings Account to enable Canadians younger than 40 to save up to $40,000 toward their first home, with no taxes on contributions or withdrawals | ||
| Introduce an “anti-flipping tax” on residential homes, requiring property to be held for at least 12 months | ||
| Make the Canada Caregiver Credit refundable | ||
| Implement a Career Extension Tax Credit to allow working seniors older than 65 who earn at least $5,000 at their jobs to eliminate taxes payable on a portion of their income and receive a tax credit of up to $1,650 | ||
| Increase the guaranteed income supplement by $500 for single seniors and by $750 for couples, beginning at age 65 |
Still lingering from 2018
Legislation that would implement new annual reporting requirements for certain trusts has yet to pass, but the requirements would affect tax years ended on or after Dec. 31. See story, Landmark transparency deadline looms for trustees.