New Mega Deduction a Good Start, But More Tax Reforms Are Needed

The Federal government has unveiled a Productivity Mega Deduction, which will provide immediate expensing under Capital Cost Allowance (CCA) provisions for a broad range of depreciable property, importantly on a permanent basis, for acquisitions on or after September 15, 2026. Check out the noteworthy exclusions are listed below. This tax reform is a good start, but much more needs to be done, especially for small business owners and average taxpayers to make Canada truly competitive across our tax base.

While tax practitioners keep their heads down to finish filing your tax returns, do-it-yourselfers who are procrastinators need to get on it!

The Canada Revenue Agency (CRA) recently released an updated information circular (IC00-1R3) pertaining to the Voluntary Disclosure Program (VDP), which promotes tax compliance by encouraging taxpayers to come forward and correct prior errors and omissions.

The April 19 edition of the Globe and Mail featured a guest column from the Honourable Jim Flaherty, Minister of Finance, who spoke of modernizing a foreign aid program called the General Preferential Tariff. Created in 1974, this program was a commitment from many developed Western countries to assist the economies of the poorest “Third World” countries. A lot has changed since the 1970’s, and our government feels justified in modifying the approach of the Tariff.

The Fraser Institute published an interesting paper by Francois Vaillancourt in April 2010 on what it costs Canadians to comply with their personal income taxes. Leger Marketing did a detailed survey for the national think tank on a sampling of 2000 tax filers based on the 2007 tax filing year. The key results: the use of a tax pro has increased significantly over the past 20 years. 39% of Canadians paid a pro in 1986; 51% of Canadians paid in 2007.

There is some good economic news and some bad in an article released by Statistics Canada on April 17, which reveals interesting statistics about the productivity of each province during the period 1997-2010, using the most recent provincial multifactor productivity database.

Claiming moving expenses on your tax return can be very lucrative so be sure to fill out form T1-M if you moved at least 40 km closer, within Canada, to a new work location, or place of self-employment.