Bill C-32 Continues Pathway to New Tax Provisions

The Finance Minister introduced Bill C-32, Fall Economic Statement Implementation Act on Friday November 4.  Noteworthy is the complex pathway to law:  this document encompasses previously announced measures from the April 2022 budget and finally the date of implementation of the First Home Savings Account.  A synopsis follows; be sure to request a copy of the Knowledge Bureau’s Special Report on the Fall Economic Statement for greater detail.

For First Time Home Buyers:   Four provisions that affect personal residences have been introduced:

• Doubling the First-Time Home Buyers’ Tax credit to $10,000, which will provide a real dollar credit of $1500, for the tax year 2022.  (Announced in the 2021 Federal Budget, included in proposed legislation in August 2022 and in Bill C-32.)
• Introducing the Multi-Generational Home Renovation Tax Credit for expenditures up to $50,000 for a real dollar value of $7500 starting the beginning of January 2023.  (Announced in the 2022 Federal Budget, included in proposed legislation in August 2022 and in Bill C-32.)
• Date Introducing the Tax-Free First Home Savings Account (FHSA) which allows for savings of $8000 a year to a maximum of $40,000 is April 1, 2023. (Announced in the 2022 Federal Budget, included in proposed legislation in August 2022 and in Bill C-32.)
• Embellishment of the Anti-Flipping Rules that will require the 100% inclusion of gains of the sale of residences sold within 365 days of purchase, except in limited circumstances like death, divorce, expropriation, etc. starting in 2023. (Announced in the 2022 Federal Budget, included in proposed legislation in August 2022 and in Bill C-32.)

For Businesses:  Five provisions were included in Bill C-32:

• The Canada Recovery Dividend, which is a one-time 15% dividend on taxable income of banks and life insurer groups, above $1 Billion.
• A Reduction in the Corporate Tax Rate for small businesses from 15% to 9% under certain circumstances.
• A new 30% Critical Mineral Exploration Tax Credit for specified mineral exploration expenses.
• An elimination of flow-through shares for exploration and development of oil, gas and coal mines.
• Launch of the new Canada Growth Fund for private equity investments in reducing emissions.

Trust Filing Provisions:  Implementation of these provisions have been delayed by another year to encompass trust tax years ending after December 30, 2023. 

Join Evelyn Jacks on November 16 at the Virtual CE Summit when she will highlight these and other significant tax and economic changes affecting your clients in the 2022 tax filing year and in tax planning for 2023 and beyond. 

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