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?   

The timing could be better.  The federal government has chosen April 19, 2021 as the date for their first federal budget in two years,  in the midst of a third wave of a trying pandemic.  This could also well be the busiest week of tax season for taxpayers and their advisors. Yet, the important roadmap to economic recovery and the tax changes to pay for it will likely be set forth. Join us for a special Knowlege Bureau Report after the budget day.

Many taxpayers are unaware and in fact shocked to learn that the bushel of apples, gaggle of geese, or barter services of any kind provided in anyway, including those online, are taxable.  Whether they are paid in kind to settle a debt or simply as a trade, all have a commercial value that may have tax implications.

The CRA recently released an important technical newsletter to make changes to Independent Pension Plan (IPP) rules. Some experts in the personal pension planning space think that this is a good thing.  Here is what’s at the centre of the  issue and why.

Trading goods and services has become much more sophisticated over the years.  In particular CRA is watching social media for evidence of unreported income or capital transactions, for example, popular Airbnb rentals. They consider this new “platform economy” to include any economic and social activities that connect buyers and sellers of goods or services via mobile apps or the internet.  There are 4 platforms in particular that will be audit-prone in 2021.

With the dramatic increase in digital solutions, and the challenges presented by the pandemic, more of your clients may require more frequent communications, improved collaboration between their financial professionals and more efficient processes in building wealth with all family stakeholders.  In a highly complex tax and investment environment, differentiate yourself as a Real Wealth Manager™.  Your new high value professional skills will help you connect the dots, and when you do, a bonus:   you’ll receive an invitation to join in on some important peer-to-peer networking opportunities coming up this spring – exclusively for Real Wealth Managers™.

It’s April 1st next week, and that means a number of rates for the second quarter to reflect inflation calculations.  This includes prescribed interest rates that affect how much you will receive on interest on refunds owed to you by CRA and pay on CRA overdue balances due from you.  Will seniors get a raise on their OAS payments?  What will be the prescribed interest charge on shareholder loan accounts?  Here are the details: