Millards Chartered Professional Accountants has released their annual Federal Budget Commentary in response to the new budget announced on April 7th. The 280-page budget introduces changes that may impact our clients. We have included a short list of highlights below but we encourage all clients as well as the general public to download the Millards Federal Budget Commentary to review our assessment and breakdown.

What You Need To Know

No changes were made to personal or corporate tax rates, nor to the inclusion rate on taxable capital gains although several proposals target housing affordability.

New Homes & Tax Free First Home Savings Account

In addition to providing $4-billion to help cities approve the construction of 100,000 new homes, the feds have promised to introduce tax-free savings accounts that would let first-time home buyers save up to $40,000 in tax-deductible contributions. Withdrawals to buy a first home would not be taxed. 

The Liberals also intend to double the First-Time Home Buyers’ Tax Credit amount to $10,000 to help with growing closing costs. Applying to homes purchased on or after Jan. 1, 2022, the credit would save approximately $1,500.

The budget will also provide a home renovation tax credit of up to $7,500 for homeowners that need to add a second suite for family members.

Housing Support For Low-Income Canadians

While the exact mechanism and eligibility requirements are to be determined, the 2022 budget dedicated $475 million for a one-time, direct payment of $500 to Canadians facing “housing affordability challenges.” The payment should come in the next fiscal year.

Dental Care

Acting on its agreement with the NDP, the government is promising $5.3 billion over five years and $1.7 billion each year thereafter for a national dental care program. 

The program will cover families with incomes of less than $90,000 a year and begin with children under 12 years old. In 2023 it will expand to cover Canadians under 18 years old as well as seniors and people with disabilities. 

No co-payments will be required tor those with an income of less than $70,000.

Property Flipping Tax

The Liberal government is imposing a tax on property flipping. As promised during last year’s election campaign, the new tax will apply to those who buy and sell homes within a year. The policy would include exemptions for personal situations like divorce.

Defence & Security

The budget increases defence spending by $8 billion over five years bringing our defence budget to an estimated 1.5 percent of GDP. NATO has called on member nations to spend two per cent of GDP but the $8 billion includes $500 million in military aid to Ukraine. 

The budget includes $875 million over five years to address cybersecurity and $100 million over six years to strengthen leadership and implement a culture change in the Canadian Armed Forces.

Indigenous ReconcilIation & Residential Schools

The budget pledges an additional $11 billion over six years to support Indigenous children, families and communities. 

The budget offers $210 million to help communities document, locate and memorialise burial sites at former residential schools. $25 million of the budget will support the RCMP in assisting community-led investigations into former residential school burial sites.

We’re Here To Guide You!

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