Capital Gains Chaos: Extensions & Unprecedented Delays to Tax Season 2025

Stop! Don’t file a T1 or T3 tax return yet, says a March 11, 2025, news release from the CRA, if you have been impacted by the chaos of the proposed capital gains inclusion rate increase.

It’s Provincial Budget Time! First out of the gate on February 22, the BC government introduced a substantive budget which introduces a BC Family Benefit Bonus, increases the Climate Action Tax Credit, extends training tax credits, exempts farmers from participating in provincial agricultural insurance programs and most important, changes the taxation of real estate in the province, and introduces a new Home Flipping for 2025.  This is a substantive matter to discuss with clients during tax season 2024. Details follow:

February 29 was the date that compelled three provinces to release their 2024 provincial budgets:  Nunavut, Alberta and Nova Scotia.  Here are the tax highlights:

The Parliamentary Budget Officer released its projections and summary of Canada’s fiscal outlook on March 7, noting  “while total budgetary authorities are increasing in this year's Main Estimates, the pace of growth in the 2024-25 Main Estimates has slowed compared to the pandemic years” and that  “. . .  for the first time since the pandemic, voted budgetary authorities have decreased compared to previous years’ Main Estimate.”  The fly in the ointment is that those authorities still remain “roughly 50 per cent higher than in the pre-pandemic 2019-20 Main Estimates” and do not include new spending to be announced in the April 16 budget.  The PBO fiscal outlook follows:

There’s a new way to experience a Knowledge Bureau Education – completely risk-free! We just launched a new DMA™ Program Orientation experience to give you a feel for our Distinguished Master Advisor (DMA™) Designation Programs in each area of specialization and help you take the next step on your new pathway to specialized credentials. Take ten minutes and check out the Introduction to the DMA™- Retirement Income Services Specialist Program Orientation. Your experience includes an Orientation video, free course and calculator trials, and a special offer valid for 2 weeks from the launch date. Check out the details here:

In February we asked KBR readers to weigh in on the following poll question: “The RRSP deadline for the 2023 tax year is February 29. From a wealth planning perspective, do you think middle aged Canadians should invest in a TFSA instead?”. The opinions were mixed with 64% answering “yes” in favour of the TFSA over the RRSP. As always, the important details are in the insightful comments left by our readers from the tax, accounting and financial services, and many pointed out it depends on “Know Your Client”.  Check them out:

Short term rental ownership has doubled from 7% to 15% in the period 2017 to 2021.  The federal government plans to deny tax deductions otherwise claimable to reduce income earned in the case of non-compliant short term rental owners starting in the 2024 tax year. This measure  introduces significant complexity to an already perplexing tax regime for real estate owners and their accountants at a time when the outlook for growth in this market may be subsiding.  Here’s what we know and why there may be a good argument for scrapping this tax entirely: