Canada: 2022 federal budget bill enacted
Canada's first budget implementation bill received Royal Assent
Canada's first budget implementation bill received Royal Assent
Canada's first budget implementation bill, which includes several tax measures from the 2022 budget, received Royal Assent on 23 June 2022.
Bill C-19 also includes several outstanding 2021 federal budget measures, including:
- Immediate expensing of certain capital property
- Corporate income tax rate reductions for eligible zero-emission technology manufacturing profits
- New luxury tax
Corporate measures
Bill C-19 includes several corporate income tax measures related to:
- Immediate expensing of up to $1.5 million* per year of eligible property acquired after 18 April 2021 and available for use before 2024 (for Canadian-controlled private corporations (CCPCs)) or acquired after 31 December 2021 and available for use before 2025 (for eligible sole proprietors and certain partnerships)
- Expanded access to the accelerated capital cost allowance (CCA) for certain clean energy equipment, applicable to eligible property acquired after 18 April 2021, with certain other changes effective for property that becomes available for use after 2024
- The temporary extension for eligible expenses and other deadlines under film or video production tax credits, effective as 11 April 2020
- Corporate income tax rate reductions for zero-emission technology manufacturing profits
Note that the income tax rate reductions for zero-emission technology manufacturing profits reduce the general corporate income tax rate and small business income tax rate on eligible profits to 7.5% (from 15%) and to 4.5% (from 9%), respectively, for taxation years beginning after 2021 and before 2029. This reduction is gradually phased out for taxation years that begin in 2029 and are fully phased out for taxation years that begin after 2031.
Other measures
Among other measures, Bill C-19 also includes legislation for a luxury tax on certain new aircrafts and motor vehicles priced over $100,000 and certain boats priced over $250,000. However, note that the legislation does not specify the coming into force date for the luxury tax on aircraft, which will be fixed separately by order of the Governor in Council.
In addition, Bill C-19 provides the Canada Revenue Agency (CRA) with discretion to accept late-filed wage and rent subsidy claims as well as claims under the Canada Recovery Hiring Program.
Read a June 2022 report prepared by the KPMG member firm in Canada
*$=Canadian dollar
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.