Legislative Costing Notes

Immediate expensing for Canadian-Controlled Private Corporations (CCPC)

Introducing immediate expensing for eligible property (most capital property except generally long-lived assets) acquired by a CCPC on or after Budget Day and that becomes available for use before January 1, 2024, up to a maximum amount of $1.5 million per taxation year. The availability of other enhanced deductions under existing rules – such as the full expensing for manufacturing and processing machinery and equipment and for clean energy equipment, introduced in the 2018 Fall Economic Statement – would not reduce the maximum amount available under this new measure.

Extending the temporary enhancements to the Work-Sharing program for employers and employees affected by COVID-19

Temporary enhancements to the Work-Sharing (WS) program, currently effective between March 15, 2020 and September 26, 2021 will be extended for one additional year. This includes the extension of the maximum duration of a WS agreement from 38 weeks to 76 weeks, the waiving of the mandatory cooling off period for employers already using the WS program, the easing of the recovery plan requirements, and the expansion of eligibility criteria.

Update: Bill C-206 - Extension of the exemption for qualifying farming fuel to marketable natural gas and propane

Bill C-206 amends the Greenhouse Gas Pollution Pricing Act to extend the exemption for qualifying farming fuel to marketable natural gas and propane. This note updates a prior PBO costing to account for the federal carbon pricing backstop rising to $170/Gt by 2030.

Interest-free Loans for Home Retrofits

This measure offers up to $40,000 in interest-free loans to eligible homeowners and landlords to complete deep home retrofits recommended through an authorized EnerGuide energy assessment. 

This measure builds on a program put forward in the 2020 Fall Economic Statement, which provided funding for up to one million free energy audits and up to 700,000 grants of up to $5,000 for homeowners to complete energy efficient home improvements.

Increasing Old Age Security for Canadians 75 and Over

- Providing a one-time taxable payment of $500 in August 2021 to OAS pensioners who will be 75 or over as of June 2022. This will include seniors whose OAS pensions have been fully clawed back through the OAS Recovery Tax.
- Increasing OAS payments for pensioners 75 and over by 10 per cent on an ongoing basis as of July 2022.

Temporarily Waiving the One-week Waiting Period for Employment Insurance Claims

Waiving the waiting period for EI beneficiaries who establish a new claim between January 31, 2021, and September 25, 2021. This includes claims for regular, fishing, and special benefits and will allow people who apply during that period and return to work before exhausting all their weeks of entitlement to benefit from an additional week of income support. The maximum number of weeks of benefits will not change.

Maintaining flexible and uniform access to regular, fishing, and special EI benefits across all regions

Maintaining uniform access to EI regular and special benefits across all regions, through a 420-hour entrance requirement, with a 14-week minimum entitlement for regular benefits, and a new common earnings threshold for fishing benefits. This measure is assumed to come into force on September 26, 2021 and last for one year.

Modifications to federal financial assistance supports for students and recent graduates

Modifying federal student financial assistance, including support under the Canada Student Loans Program (CSLP).

Canada Workers Benefit (CWB) Enhancement

Broadening access to the CWB by increasing the phase-in rates and thresholds, as well as providing greater financial incentive for working couples. 

Canada Recovery Hiring Program

Provide eligible employers with a subsidy of up to 50 per cent on the incremental remuneration paid to eligible employees between June 6, 2021 and November 20, 2021.  Employers must choose between the Canada Emergency Wage Subsidy (CEWS) or the Canada Recovery Hiring Program (CRHP).

Employment Insurance Sickness Benefits Extension

In Budget 2021 the Government of Canada proposed to increase the maximum number of weeks for which employment insurance sickness benefits may be paid due to a prescribed illness, injury, or quarantine to 26 weeks from 15 weeks. The extension is planned to come into effect summer 2022.

Digital services tax

Implementation of a new corporate income tax for companies offering digital services. The tax will take effect January 1, 2022. This measure is temporary and will only apply in the event that Canada does not reach a multilateral agreement on the taxation of digital services.

It will be a 3% tax on revenues collected by online marketplaces, social media, online advertising services, and user data sales and licensing services. This tax will apply to businesses with worldwide revenues of at least €750 million and Canadian revenues of more than $20 million.

Emissions Reduction Fund – Onshore

Introducing financial support for oil and gas companies to reduce methane emissions.

The Emissions Reduction Fund (ERF) – Onshore will offer up to $675 million in contributions to support capital projects that lower or eliminate routine venting of methane oil and gas operations.  The overall ERF includes a further $75 million for offshore oil and gas operations, which is outside the scope of the analysis.

Bill C-265: Employment Insurance Sickness Benefits Extension

Bill C-265 proposes to increase the maximum number of weeks for which employment insurance sickness benefits may be paid due to a prescribed illness, injury, or quarantine to 50 weeks from 15 weeks. The extension is planned to come into effect summer 2022.

Rate Reduction for Zero-Emission Technology Manufacturers

The corporate income tax (CIT) rate on eligible zero-emission technology manufacturing and processing activities will be reduced in half. This will reduce the CIT rate on small businesses from 9 to 4.5 per cent and the general CIT rate from 15 to 7.5 per cent. The rate reduction will apply to taxation years that begin after 2021 and before 2031 (gradually phasing out between 2029 and 2031).

Luxury goods sales tax

The introduction of a sales tax applied at the point of purchase of automobiles and aircraft valued over $100,000 and vessels valued over $250,000. The tax will only apply to new vehicles purchased for personal use. The tax rate will be the lesser of 10 per cent of the full value of the vehicle, or 20 per cent of the value above the threshold. 

This tax will come into effect on January 1, 2022.

The Collection of GST from Foreign-Based Sellers on Goods Sold to Canadian Residents from Canadian Fulfillment Warehouses

Certain foreign-based sellers store goods in warehouses within Canada in anticipation of the goods being sold to buyers located in Canada. Once an item is purchased, it is shipped from the warehouse to the buyer.

Tax on Unproductive Use of Canadian Housing by Foreign Non-resident Owners

In Budget 2021 the government of Canada proposed to introduce a national 1% tax on the value of non-resident, non-Canadian owned residential real estate considered to be vacant or underused. The tax is planned to take effect on January 2022 and will require all owners of residential property in Canada, other than Canadian citizens or permanent residents to file a declaration for the prior calendar year in respect of each Canadian residential property they own. Depending on circumstances, owners may be eligible to exemptions from the tax in respect of a property for the year. An exemption may be available, for instance, where a property is leased to one or more qualified tenants in relation to the owner for a minimum period in a calendar year.

Tobacco Taxation Increase

Increasing the tobacco excise duty rate by $4 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates for other tobacco products.

Increasing the maximum number of EI regular weeks of benefits

The number of EI regular weeks of benefits will be increased to a maximum of 50 weeks for claims made between September 27, 2020 and September 25, 2021.