Budget 2013: Notice of Ways and Means Motion Tabled

In the House of Commons last week, Ministers Flaherty and Menzies tabled a detailed Notice of Ways and Means Motion in order to begin the implementation of tax measures initially introduced in the March 21, 2013 Federal Budget.

Changes to the Income Tax Act, from a personal filing perspective, will include increased access to certain tax credits such as the Adoption Expense Tax Credit, and the introduction of a First-Time Donor’s Super Credit for first-time claimants of the Charitable Donations Tax Credit; provisions taxpayers and their advisors should be discussing now as they plan their 2013 tax efficiencies. 

More interestingly, there is proposed authority for the Canada Revenue Agency (CRA) to collect 50% of taxes, interest, and penalties that are in dispute in respect of a tax shelter that involves a charitable donation.

The CRA is constantly involved in a battle against tax evasion, and with the increasing “tax debts” they are incurring, as described in the KBR article CRA Struggling to Collect All Taxes Due, they evidently require more tools to face their adversaries. Other measures in the Notice that assist with this objective are more stringent reporting requirements and allowing the CRA to withhold refunds for businesses claiming GST/HST refunds with less than full documentation.

Measures pertaining to the creation of jobs and the growth of the economy generally include a two-year extension of the temporary accelerated capital cost allowance for eligible manufacturing and processing machinery and equipment, and the extension of the Mineral Exploration Tax Credit for flow-through share investors for a further year.