New Mega Deduction a Good Start, But More Tax Reforms Are Needed

The Federal government has unveiled a Productivity Mega Deduction, which will provide immediate expensing under Capital Cost Allowance (CCA) provisions for a broad range of depreciable property, importantly on a permanent basis, for acquisitions on or after September 15, 2026. Check out the noteworthy exclusions are listed below. This tax reform is a good start, but much more needs to be done, especially for small business owners and average taxpayers to make Canada truly competitive across our tax base.

The Canada Emergency Rent Subsidy (CERS) Program,  initially presented in draft legislation back in October,  was just approved by the Senate late last Friday. With new lockdowns in place across Canada and rent due next week, many small business owners are stressed, without revenues, and grasping at this latest straw, which is also very complex. But there is some good news in the detail.

Over the past weekend, the government quietly added to their Canada Emergency Wage Subsidy (CEWS) FAQ and updated the application portal, clarifying a number of important questions for business owners on the deeming rule for claim periods 5 to 10, employee bonus and commission in eligible remuneration calculations, and how to handle pay associated with termination when applying for the CEWS. We’ve pulled out the highlights for you:

Now is the right time to enhance your credentials and train your teams for the upcoming tax season, and our Black Friday Sale is here to get you started. This week only: save 55% on tuition when you enrol in any two courses of your choice for $995.

This just in:  a post-secondary education can bring on joy. A 2018 National Graduates Survey released by Statistics Canada on November 17 surveyed 2015 post-secondary graduates in Canada. It reports that the majority of graduates were satisfied with their jobs, felt qualified for them and 91% were working full time. 

Just released: the agenda for the January 20 Advanced T1 Tax Updated and Virtual CE Summit.  This is your opportunity to attend Canada’s most comprehensive T1 filing course from Canadian tax experts Evelyn Jacks, Larry Frostiak, Dr. Dean Smith and Alan Rowell; this time addressing a national audience in this year’s virtual webinar format. RSVP now: early-bird savings end January 15 and there is special pricing for firms who wish to enrol teams.

It’s hard to believe but back in 1917 the average taxpayer paid $14 and personal income tax was 2.6% of all federal government revenues.  But in 2020-2021, the $165 billion the government expects to collect from personal income taxes represents a whopping 57% of all budgetary revenues. This is a significant increase in reliance on the fruits of Canadians’ labour, even when compared to modern standards:  51% in 2017, for example. This makes the role of financial intermediaries – tax, accounting, bookkeeping, payroll and financial advisors – more important this year than ever before.  There are many places to look for savings before year-end.