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?   

Knowledge Bureau is proud to offer two options for tax and financial advisors who want to shore up their T1 tax knowledge at Canada’s foremost T1 Advanced Tax Update!  Join us live and in person if you’re in the Toronto area on February 7, 2023 ( yes,  you can even go to a Toronto Raptor’s game that night!) or take the Virtual T1 Advanced Tax Update from the comfort of your home or office on January 18, 2023.  But we also have options if you need T1 Tax Training now for new or returning staff.

Baby Boomers and Gen X are already in the process of transferring their wealth to Millennials and Gen Z. However, increasingly the solution to wealth transfer for singles will be to plan a donations strategy.  Consider these reasons individuals donate to charities:

Is the Canada Pension Plan sustainable, and if so, are further premium rate increases required?  The 31st Actuarial Report on the Canada Pension Plan (CPP)[1] is expected to be released before the end of December, 2022 and it should shed important light on how expensive these source deductions may yet become. 

Did you know that asset purchases before the end of this year could qualify for immediate expensing – that is, a full expense deduction for capital purchases?  Yes, you read that correctly.  Certain eligible asset purchases can be immediately expensed in the year the asset becomes available for use. This provision has recently been expanded to also include sole proprietors and many partnerships in 2022. 

About a third of the largest publicly traded companies in Canada offer their employees stock compensation arrangements. Recently, Shopify announced that they will be overhauling their employees’ compensation arrangements, offering them a choice between cash or stock. But do the recipients of these compensation arrangements truly understand the risks associated with investing in stocks? Are they aware of how these securities fit within their holistic wealth management plan?  It’s a real opportunity to add value as we head into an economic renewal.

As baby boomers age, technology makes it possible for people and businesses to operate globally, and economic changes make it appealing for people and businesses to purchase investment property globally.  As well as the increase in the sharing of financial information between countries, cross border taxation issues become key for cross border employment, entrepreneurship or asset ownership, as does the issue of residency and U.S. citizenship.