Understanding the OAS Clawback

Seniors don’t take kindly to the clawback of their OAS (Old Age Security) especially in these inflationary times, but this can happen, especially if there was an unusual receipt of income during the past calendar year.  Here’s what you need to know to explain the consequences for 2025 and 2026:

The federal government released a fiscal and economic update on December 14 that brought in a small number of tax changes and a message that despite the steepest economic contraction since the Great Depression, our “one-in-a-lifetime economic trauma” is fading into history, as Canada has recovered 106% of the jobs lost during the pandemic. There is more good news, according to the government, and some red flags on the horizon:

The December 14 Economic Update from the Federal Government primarily focused on pandemic recovery and healthcare sector as we’re entering a new wave of pandemic response. But there is some really good news to offset this reality. What was noticeably absent from the Update?  Investors and high-income earners will be pleased. But, will we see them addressed in the next federal budget?

Canada will create a new tax return to be filed by non-residents who own and under-use residential property in Canada, starting in 2022. Accompanying that return will be a payment of a new 1% tax on the value of the property, unless an exemption can be met. Here’s what you need to know.

According to a recent study by Philip Cross, the former chief analyst at Statistics Canada, economic growth in Canada over the past ten years has been the weakest since the 1930s, our competitiveness has faltered to such a degree that we can’t capitalize on trade deals, our productivity has stalled, and even more startling for a nation with such highly educated and tech-savvy people:  our lack of innovation and weak economic growth has persisted for decades.  In conversation with Dr. Jack Mintz, who co-authored a study on small business tax competitiveness, we discussed alternative tax strategies as a potential solution.       

On December 14, 2021, Deputy Prime Minister and Minister of Finance Chrystia Freeland, released an Economic and Fiscal Update 2021 with measures that will impact businesses throughout the Nation. The most relevant measures are listed as follows:

Will the federal government soon find a new revenue source for Employment Insurance?  Will gig economy workers soon qualify for EI?  The answer may be yes, based on upcoming consultations on the matter.