Immediate Expensing Rules: Good Tax Policy?

Over the course of the last two federal budgets (April 16, 2024 and November 4, 2025), the rules for claiming Capital Cost Allowance (CCA) have been uncertain. The proposal to extend immediate expensing rules for certain acquired assets were paused for over a year and then re-introduced in a series of four complex measures which together with new rules for Scientific Research and Experimental Development have become known as the “Productivity Super-Deduction”.  A backdrop appears below. The key question: will this complexity be effective as an economic stimulator?   

Paying a surrogate to bear a child is illegal in Canada.  Yet, the Nova Scotia government recently introduced a new refundable tax credit for surrogacy-related medical expenses, a first in Canada.  The federal government, too, proposed a similar provision in the April 7 Federal Budget, to provide for tax relief for reimbursements paid to the “patient”, the surrogate.

At a time when interest rates are rising, a more common question from investors in real estate may concern interest deductibility.  When is the interest paid on a loan to finance a building or its construction, written off as an operating expense and when must it be capitalized? Most people are unaware of the latter option.

Knowledge Bureau Report asked its national audience “Do you believe the RRSP is still a good investment for pre-retirees who work after age 60?” last month and the results were surprising, given all the rhetoric around the use of RRSPs. A full majority – 74% said yes, but with lots of qualifications.  Here’s why:

At year-end, the T4 summary is completed and sent to the CRA.  The T4 forms are generated and sent to the employees before the end of February in the year following the payroll year.  If the employer is late in completing the T slip summary and remitting to the CRA, depending upon the number of slips to be completed, an employer could see a penalty of anywhere from $10 to $7,500.

The Federal Budget of April 7, 2022 represents a much brighter economic outlook for Canada and contains a sprinkling of tax provisions that most importantly did not raise any tax rates or impose new capital gains taxes.  However, there is a warning that this could be on the horizon as early as this fall.

The Finance Department has announced that the Federal Budget will be on April 7, 2022.  Your Knowledge Bureau Special Budget Report team will provide full details.  Then join us comprehensive analysis and CE Credits with Evelyn Jacks and the Knowledge Bureau Faculty at the May 18 Virtual CE Summit for the effect of budget and economic change on Retirement and Estate Planning.