Finance Canada Drops Draft Legislation August 15

All professional tax practitioners, financial advisors should take note of an important mid-summer release of draft legislation to implement some of the proposals from the November 2024 Fall Economic Statement, the April 2024 Budget, the EIFEL rules announced on August 12, 2024, and rules relating to passive income of foreign affiliates announced in the 2022 federal budget.  This draft legislation also introduces more modifications to new trust filing requirements. Brief highlights appear below;  technical details will be discussed in the September 17 and November 5 CE Summits and Knowledge Bureau’s certificate course on T3 Filings. 

The news can be jarring for your clients. In these volatile times, tax accounting and financial advisors do important work, together. A special shout-out goes out today to our highly educated, skilled and experienced certificate and designation holders working hard to help their clients make sense of events that trigger financial decision-making, especially to the RWMs™.  Here’s why. 

Canadians are now into a federal election campaign and tax reductions of all kinds are on the agenda. Prime Minister Mark Carney has already reduced one of the greatest obstacles for the Liberal Party to gain re-election: the consumer carbon taxes as of April 1, 2025. Technically it is being reduced to zero, as without an act of Parliament he cannot eliminate the tax. However, the regulations behind the tax are under the purview of the Finance Minister, and on closer look, we can get a real glimpse of what’s to come should the Liberals win the election.

Manitoba’s budget, delivered on March 20th by Finance Minister Adrien Sala, features a lot of red ink and the re-emergence of a stealth, hidden tax: bracket creep is back! Check out the details on this budget below and don’t forget look for the Knowledge Bureau Special Summary Report on the other provinces who have brought down budgets this quarter including: Quebec, Saskatchewan, Yukon and New Brunswick.

If you are a self-employed farmer or an individual who is a member of a partnership operating a farming business with one or more permanent establishments in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island or Saskatchewan, you may be eligible to have a portion of fuel charge proceeds returned to you. This refundable tax credit is a way to return fuel charge proceeds under the federal carbon pollution pricing system directly to eligible farming businesses.

While taxpayers can claim a variety of medical expenses, there are certain costs related to health that are not eligible for claims. The Canada Revenue Agency (CRA) outlines these exceptions in their Medical Expense Guide RC4065. The list includes:

Employers are required by law to deduct taxes from your pay and remit them on your behalf. That means the first dollars you earn every day go to the federal and provincial governments. Worse, the tax tables employers must use are skewed against you too. Consider how sizable the average tax refund in Canada is: about $2,200 or approximately $184 a month. That’s money you could be putting to use for your own financial future, rather than waiting until four or five months after the end of the year for it.