{"id":498656,"date":"2024-12-16T17:36:10","date_gmt":"2024-12-16T22:36:10","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/?p=498656"},"modified":"2024-12-16T17:36:10","modified_gmt":"2024-12-16T22:36:10","slug":"fall-economic-statement-released-after-freeland-resignation-delay","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/industry-news\/fall-economic-statement-released-after-freeland-resignation-delay\/","title":{"rendered":"Fall economic statement released after Freeland resignation delay"},"content":{"rendered":"

It was a wild day on Parliament Hill as Chrystia Freeland resigned from her role as Finance Minister, just hours before she was expected to present the fall economic statement. Her resignation letter cited fiscal policy differences with Prime Minister Justin Trudeau.<\/p>\n

We’ve identified four headlines in the statement for financial advisors.<\/p>\n

The Canada Disability Benefit will be tax-exempt<\/h2>\n

The federal government intends to bring legislation that will exclude the Canada Disability Benefit as income under the Income Tax Act.<\/p>\n

This proposal will \u201censure Canada Disability Benefit recipients keep the full value of their benefits, including other federal income-tested benefits and programs\u201d like the Canada Child Benefit and GST credits.<\/p>\n

Ottawa called on provinces and territories to ensure that Canada Disability Benefit recipients don\u2019t face reductions in provincial and territorial disability support programs.<\/p>\n

\u201cThe government will be monitoring the decisions of provinces and territories and is prepared to take action to ensure the federal benefit is not clawed back,\u201d the document read.<\/p>\n

The benefit, which will distribute up to $200 a month<\/a> to eligible beneficiaries beginning in July, was announced in Budget 2024 and expected to cost $6.1 billion over six years beginning in the 2024-25 fiscal year.<\/p>\n

Automatic tax filing, tax evasion crackdown funding for CRA<\/h2>\n

The Liberal government will work on legislation to allow the Canada Revenue Agency (CRA) to automatically file a tax return on behalf of certain lower-income Canadians and provide new funding for the agency to crack down on tax evasion.<\/p>\n

If implemented, eligible Canadians will receive a pre-filled tax return<\/a> based on CRA data and can review and modify their information. If they don\u2019t opt out of the automated filing process, the tax return would be filed by the CRA on their behalf.<\/p>\n

The move, which would extend the Canada Child Benefit, Canada Worker Benefit and GST\/HST credit to current non-filers, could cost $8.67 billion between the 2024\u201325 and 2028\u201329 financial years, the parliamentary budget officer (PBO) estimated in June<\/a>.<\/p>\n

The government also said it intends to look at expanding automatic tax filing to middle-class Canadians with simple tax situations, and proposes to expand the Minister of National Revenue\u2019s role to include simplifying and automating individual tax filing.<\/p>\n

In addition to automatic tax filing, the statement proposes $451.5 million for the CRA over five years, beginning in 2025-26, to crack down on tax evasion and recover an estimated $2.9 billion in federal revenue in the same period.<\/p>\n

The funding is intended to help CRA conclude audits of Covid-era programs like the Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy, and have an emphasis on high net-wealth individuals and those in the underground economy.<\/p>\n

Strengthening AML, penalties for financial crimes<\/h2>\n
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The Liberal government intends to bolster Canada\u2019s Anti-Money Laundering and Anti-Terrorist Financing (AML\/ATF) regime and increase administrative money penalties (AMP).<\/p>\n

Proposed changes to the\u00a0Proceeds of Crime (Money Laundering) and Terrorist Financing Act\u00a0(PCMLTFA) will require all reporting entities that are not already registered to enroll with FINTRAC, permit FINTRAC to disclose information to the Office of the Commissioner of Canada Elections to deter foreign interference in Canadian elections and clearly prohibit anonymous accounts, among other measures.<\/p>\n<\/div>\n<\/div>\n

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The government also intends to increase individual AMPs under the PCMLTFA by 40 times the current amount, and raise fines for all criminal offences by 10 times the current amount.<\/p>\n

A new aggregate penalty limit for all AMPs issued in a single notice of violation will be the greater of $4 million for an individual and $20 million for an entity, or 3% of annual worldwide gross revenue.<\/p>\n

Those with an outstanding AMP could have their registration refused or revoked, and the AMP for an existing compliance program that is in violation will be reclassified as \u201cvery serious.\u201d<\/p>\n

If a compliance agreement isn\u2019t adhered to, the FINTRAC director can issue a compliance order with an AMP to the greater of $5 million for an individual and $30 million for an entity, or 3% of annual worldwide gross revenue.<\/p>\n

The government expects the stronger penalties to yield $631 million in fine revenue between 2026-27 and 2029-30, or $158 million per year for four years.<\/p>\n

The government intends to build a new taskforce for law enforcement and the financial sector to exchange information on high-end money laundering schemes, modelled after the U.K.\u2019s Joint Money Laundering Intelligence Taskforce. It also wants FINTRAC to become a member of the Financial Institutions Supervisory Committee to enable better coordination with other agencies to fight financial crime.<\/p>\n<\/div>\n