A Post-Election Tax Summary
The 2019 Federal election has concluded with a minority Liberal government. A minority government needs support from other parties in order to execute its desired policies, and taxation is no exception. The Liberals made several tax-related promises leading up to the election, but these policy-changes are contingent upon the support of the other federal parties. That said, the Federal Liberals made the following tax promises in their election platform :
- Increase the basic personal amount to $15,000.
- Make maternity and paternity benefits tax-free.
- Boost the Canada Child Benefit by 15% for children under the age of one.
- Double the Child Disability Benefit.
- Cut corporate taxes in half for businesses that develop technologies or manufacture products that have zero emissions.
- Still committed to introduce measures to facilitate intergenerational transfers of farms.
- Crack down on corporate tax loopholes that allow companies to excessively deduct debt to artificially reduce the tax they pay.
- Modernize anti-avoidance rules to stop large multinational companies from being able to shop for lower tax rates by constructing complex schemes between countries.
- Make sure that multinational tech giants pay corporate tax on the revenue they generate in Canada.
- National tax on vacant residential properties owned by non-Canadians who do not live in Canada.
- Undertake a new comprehensive review of the tax system to ensure that wealthy Canadians do not benefit from unfair tax breaks.
- Introduce a new 10% tax on luxury cars, boats, and personal aircraft over $100,000.
- Work to achieve the standard set by the Organisation for Economic Co-operation and Development (“OECD”) to ensure that international digital corporations whose products are consumed in Canada collect and remit the same level of sales taxation as Canadian digital corporations.
- Eliminate the “swipe fee” on HST and GST for credit transactions.
And it looks like taxes will be the first thing on the Liberals’ agenda. On October 23, 2019, Prime Minister Justin Trudeau promised that a middle-class tax cut would be the first order of business. A new cabinet will be sworn in on November 20, 2019, but it is unclear when Parliament will reconvene in order to table a bill that would enact this cut. Trudeau did not provide any specifics on the tax cut, but I expect that it’s an increase to the basic personal amount and/or the above measures relating to child benefits.[Update: October 25, 2019] According to a costing estimate provided by the Parliamentary Budget Officer, the Liberals intend to gradually phase-in the increase from 2020 to 2023. Where an individual’s income exceeds $150,605 (for 2020) the increase is phased out such that there is no new benefit where income exceeds $214,557 (for 2020).
We will keep you in-the-know as tax changes are officially proposed by the government.