Finance Canada: No More Spring Budgets

Finance Canada announced on October 7 that Canada’s federal budgets will be brought down in the fall starting with the November 4, 2025 event; a significant departure from the spring schedule (February, March or April) that has been the cycle for several decades. This is going to affect many other events as we know them, and in the annual government spending approval cycle. There will also be a new budget process for capital vs. operational expenses. Here’s what you need to know:

The extended September 30 filing deadline hasn’t arrived yet. But, according to the most recent processing statistics from the CRA, there are still 2019 returns outstanding.  And, with this unusual tax season soon to be behind us, top-of-class tax and financial advisors must start immediately to help Canadians manage tax debts, maximize remaining social benefit payments and plan to reduce taxes payable in 2020. It’s a tall order.

U.S. tax filers, including American Citizens living in Canada, will have received Economic Income Payments (EIP) based on income levels reported on their 2018 and 2019 tax returns filed in the U.S. Now CRA has confirmed in a technical bulletin issued August 31 that there is more good news:  the payments will not be taxable to residents in Canada.

According to a news release from the Canadian Securities Administrators (CSA), final rules were adopted to ban the payment of trailing commissions by fund organizations, such as order-execution only (OEO) dealers who don’t make investment suitability determinations.

The true financial test on how well Canadians will weather the financial storm brought on by the pandemic will occur in the months to come. A glimpse into that future is well described in a June 2020 report from the Bank of Canada. It suggests three catalysts, working together, that can lead to successful financial recovery:  

Should you buy a new car before year end to reduce your 2020 taxes?  It’s a good question especially because lucrative new tax rules were put into place for the write-off of most capital assets* on November 21, 2018.  Taxpayers can in fact, triple up on the usual first-year tax deductions when they acquire assets in the period between November 20, 2018, and December 31, 2023, and put them into use before 2028.  

We now have a better idea about the audit techniques CRA will have at their fingertips to ensure the Canada Emergency Response Benefits (CERB) received by laid off or furloughed employees, The Canada Emergency Student Benefit (CESB) and the Canada Emergency Wage Subsidies (CEWS) received by employers are validated. The numbers will appear on a new T4 slip, which is likely to cause a few headaches for small employers and create some new opportunities for bookkeepers and tax accountants. Here are the details: