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:

Some might think this is too good to be true:  the realized capital gain on some financial assets is not subject to regular income tax if the security is transferred to a charity.  That’s right, the gain is avoided entirely. . .almost.  Here is what you need to know to make a social impact throughout the tax year, and reap impressive tax benefits too.

The final repayment deadline for outstanding CEBA loans is today, March 28.  This is the last opportunity to preserve any of the up to $20,000 in loan forgiveness.  Those business owners who failed to arrange financing for repayment must pay up the entire loan plus interest.  Will that push more businesses to close?  If so, it would add to the over 2200 business which closed their doors in December of 2023, for a total of 8 months of active business closures in 2023, according to Statistics Canada.  Check out the provincial trends:

This tax season will be remembered as a challenging one for most tax accountants and financial advisors who work with Canadians who have long tried to protect their savings and their heirs from financial ruin in retirement.  There are two reasons: CRA’s new filing requirements for bare trusts and the significant cost factors retirees now face due to inflation, taxes and professional fees to keep it all straight.  That makes it a great time for a bootcamp.

Cycle 10 CIRO (previously IIROC) credits now available from Knowledge Bureau! Become a Designated Specialist: take the Real Wealth Management™ Program), the MFA-P™ Philanthropy Services Specialist Program to earn CE Credits and enhance your value proposition. Check out the details below.

March 28 marks the last day CEBA loan recipients who have submitted a refinancing loan application on or before January 18, 2024 can qualify for up to $20,000 of loan forgiveness.  The outstanding principal of the CEBA loan must be repaid on or before March 28, 2024.  Otherwise, unpaid loans remaining become non-amortizing term loans with full repayment due December 31, 2026.  But there is still at least one bright spot for those loan holders, but it comes with tax complexity.

RRSP and RRIF are retirement savings plans where investments grow on a tax-deferred basis.  When proceeds are taken from these accounts, the full amount withdrawn is reported on the RRSP/RRIF holder’s tax return as income. Can charitable giving reduce the tax sting?  Is that a smart strategy given the detailed tax rules that can leave a tax gap? Can planning now help keep assets invested as markets show signs of recovery?  Yes, but you need to do a little extra tax legwork.