Within the context of an improving economy as more people are back to work, but also with COVID-19 still prevalent in Canada and abroad, Deputy Prime Minister and Minister of Finance Chrystia Freeland gave Canadians an Economic and Fiscal Update today.
The following are some minor tax measures affecting individuals and businesses:
- An increase in the refundable tax credit rate from 15% to 25% with respect to eligible school supplies purchased by teachers, to a maximum of $1,000 in eligible supplies, effective for 2021.
- The introduction of a temporary Small Businesses Air Quality Improvement Tax Credit of 25% of eligible expenditures to a maximum of $10,000 per location and a maximum of $50,000 for 5 locations or more.
- The introduction of an Underused Housing Tax generally equals to 1% of value of the residential real estate that is owned by non-residents, with certain exceptions based on location and occupancy. This new tax would be effective for 2022.
Federal Fall Economic and Fiscal Update December 14, 2021
An extension to the simplified rules for deducting home office expenses for 2021 and 2022, and an increase in the flat rate to $500 annually. An extension in the Highly Affected Sectors Credit Availability Program from December 31, 2021 to March 31, 2022.
The Economic and Fiscal Update provided today has an assumption that inflation is not a long-term economic concern. To the extent inflation rates continue between 4% and 5%, the government may be forced to address the impacts of inflation in the next federal budget, slated for spring 2022, especially for those on fixed income and for workers living from paycheque to paycheque.
As always, if there are any topics you wish to discuss, please give us a call or contact us today.