Fall Federal Budget: Will Spending Be Cut?

Canada has historically presented an annual budget since Confederation in 1867, even through periods like World Wars and the Great Depression, but we have recently experienced the longest period without a full federal budget in our history. By the time the next one is brought down, expected in October 2025, it will have been 18 months since the controversial April 2024 budget which introduced the doomed capital gains inclusion rate hikes. What can we expect?

 To pull ahead of high inflation, interest rates and new taxes, taxpayers and their advisors must quickly sharpen tax and financial skills in the new year for the challenging times ahead, says Knowledge Bureau Founder and President Evelyn Jacks, best-selling tax financial author and award-winning educator.  The good news?  Most people can find new tax relief due to a host of changes, together with highly educated specialists who can help.

With the late introduction of the Fall Economic Report, Canadian taxpayers and their advisors will face further uncertainty in planning their financial affairs to include the myriad of tax changes the government has introduced publicly recently.  Bill C59 was introduced on November 21, 2023 to encompass some of these provisions and this was submitted on November 30 for First Reading.  The bill will not likely pass before the Christmas break.  Specifics of concern to individuals and their advisors are summarized below:

Canadians of working age who live in poverty because of a disability have been awaiting the Canada Disability Benefit since 2020.  The Canada Disability Benefit Act was passed into law on June 22, 2023 and the next step to income is a consultation period that ends December 21. The eight topics are the government wants to know more about describes what’s in the legislation and provides an overview of what disabled people and their families can expect from the benefit.

All the updated knowledge and resources a professional personal tax specialist needs plus expert instruction is what the Knowledge Bureau’s Advanced T1 Tax Update is about,  and it’s coming your way in one of three delivery choices:  a national virtual event on January 17, 2024 or two in-person events:  January 24 at the Pearson Convention Centre in Toronto or January 26 at the Sandman Airport Hotel in Calgary.  Registration is required by December 15 for receipt of all five components of this comprehensive experience including a hard copy desk top reference and Evergreen Explanatory Notes, which you’ll cherish throughout tax season:

The Underused Housing Tax has been making headlines, most recently with the last-minute decision on October 31 to extend the filing deadline to April 30, 2024. It’s a move that 85% of tax and financial advisors said they agreed with in responding to our November poll question. However, it’s a nuanced issue that was addressed in many insightful comments. Check them out!

The federal government wants to accelerate the supply of long term residential housing and one way they intend to do this is to “crack down” on non-compliant short term rental owners and deny their income tax deductions when filing a tax return, starting January 1, 2024, according to proposals in the Fall Economic Statement released November 21, 2023.  What exactly will this mean in practice for taxpayers and their advisors in 2023; will it actually work to meet goals, and how will this affect the integrity of the tax system overall?