Canada: 2022 federal budget bill enacted

Canada's first budget implementation bill received Royal Assent

Canada's first budget implementation bill received Royal Assent

Canada's first budget implementation bill, which includes several tax measures from the 2022 budget, received Royal Assent on 23 June 2022.

Bill C-19 also includes several outstanding 2021 federal budget measures, including:

  • Immediate expensing of certain capital property
  • Corporate income tax rate reductions for eligible zero-emission technology manufacturing profits
  • New luxury tax

Corporate measures

Bill C-19 includes several corporate income tax measures related to:

  • Immediate expensing of up to $1.5 million* per year of eligible property acquired after 18 April 2021 and available for use before 2024 (for Canadian-controlled private corporations (CCPCs)) or acquired after 31 December 2021 and available for use before 2025 (for eligible sole proprietors and certain partnerships)
  • Expanded access to the accelerated capital cost allowance (CCA) for certain clean energy equipment, applicable to eligible property acquired after 18 April 2021, with certain other changes effective for property that becomes available for use after 2024
  • The temporary extension for eligible expenses and other deadlines under film or video production tax credits, effective as 11 April 2020
  • Corporate income tax rate reductions for zero-emission technology manufacturing profits

Note that the income tax rate reductions for zero-emission technology manufacturing profits reduce the general corporate income tax rate and small business income tax rate on eligible profits to 7.5% (from 15%) and to 4.5% (from 9%), respectively, for taxation years beginning after 2021 and before 2029. This reduction is gradually phased out for taxation years that begin in 2029 and are fully phased out for taxation years that begin after 2031.

Other measures

Among other measures, Bill C-19 also includes legislation for a luxury tax on certain new aircrafts and motor vehicles priced over $100,000 and certain boats priced over $250,000. However, note that the legislation does not specify the coming into force date for the luxury tax on aircraft, which will be fixed separately by order of the Governor in Council.

In addition, Bill C-19 provides the Canada Revenue Agency (CRA) with discretion to accept late-filed wage and rent subsidy claims as well as claims under the Canada Recovery Hiring Program.

Read a June 2022 report prepared by the KPMG member firm in Canada

*$=Canadian dollar

 

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