On March 28, 2023, the Deputy Prime Minister and Finance Minister, the Honourable Chrystia Freeland, presented Budget 2023 – A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future, to the House of Commons.
No changes were made to personal or corporate tax rates or to the inclusion rate on taxable capital gains. Some highlights include the following:
A. Personal Measures
- Modifications to the alternative minimum tax regime focused on high-income individuals.
- A one-time grocery rebate equal to two quarterly GST/HST credit payments.
- Additional flexibility and possibilities with Registered Disability and Registered Education Savings Plans were introduced.
B. Business Measures
- Modifications to the intergenerational business transfer rules to set requirements for activity by the children in the business and the transfer of control, equity ownership and management from the parents to the children.
- Introduction of the employee ownership trust structure to provide a mechanism for business owners to transfer ownership in their private corporations to employee groups.
- Several investment tax credits and other incentives were introduced or modified to encourage investment in clean energy.
C. International Measures
- Confirmation of the government’s intention to introduce legislation implementing the income allocation rule and a domestic minimum top-up tax applicable to Canadian entities of multinational enterprises consistent with the OECD’s BEPS initiatives.
D. Sales and Excise Tax
- Increasing the air travellers security charge, limiting increases to alcohol excise duties for one year and adjusting the cannabis excise duty remittance frequency.
E. Other Measures
- New income-tested dental care program for uninsured Canadians.
F. Previously Announced Measures
- Intention to proceed with previously announced measures, including those related to excessive interest and financing expenses limitations; reporting rules for digital platform operators; extension of the residential property flipping rule to assignment sales; substantive Canadian-controlled private corporations; the mandatory disclosure rules; the electronic filing and certification of tax and information returns; and GST/HST changes in respect of cryptoasset mining.
For details of each measure, please download the entire newsletter: