Some Items from the Fall Economic Statement
It’s been a tumultuous week to be a Canadian. Last Sunday there was news that the Housing Minister was going to resign on Monday. Which he did. Then, on Monday, the Finance Minister, who was to give the 2024 Fall Economic Statement, released a public letter resigning. In the letter she outlined why she resigned and certain disagreements she had with the Prime Minister. Because of that, no one was sure who was going to read the statement or if it would be even read that day.
Eventually it was read and I figured I would share some of the highlights here. Readers should note that with the turbulence in the government currently, some or maybe all of these might be revised but I thought I’d share them anyways. If there is any update to these I will of course let you know.
#1 - Extension of the Accelerated Investment Incentive (AII)
Any time a business acquires capital assets (machinery, equipment, etc.) it must depreciate them over the useful life of the asset. The AII allows businesses to buy capital assets and within the first year take a larger write-off to shield more income. The AII extension was announced for a further 5 years that will cost roughly $17.4 billion.
#2 - No Tax from the Canada Disability Benefit
The Canada Disability Benefit will provide individuals who are eligible for the Disability Tax Credit approximately $2,400 per year starting July 2025. The Government of Canada is proposing to exempt this amount from being taxable. Like how the Canada Child Benefit is exempt from taxable income.
#3 - Border Security
The Canadian Government will provide $1.3 billion into more border security. Most likely has to do with the recent Trump comments about the border and the potential threat of tariffs if not figured out.
#4 - Increased CRA Funding
CRA will be receiving $451.1m over the span of 5 years . The projection is this amount will return $2.9B back to the governent from preventing fraud, make non-filers file their returns, more audits of the good old CEWS and CERS and prevent tax schemes, primarily carousel schemes. I had to look up what this was as I haven’t heard of it before. It is where companies or a group of companies sell fake items or the same items to each other consistently. One collects the HST or it can create fake documents showing that HST was charged. This business will then not remit the HST to CRA. All of the companies under the collecting business can then claim refunds on the fake documents that show they purchased the product and the company selling the product can then just claim to have exported the goods (where you don’t need to collect HST on exports).
#5 - A new face on the $5 bill
Terry Fox will replace Sir Wilfried Laurier on the $5 bill
Other Items of Note
The Canadian Government will be running a roughly $60B deficit, up from the projected $40B, with more deficits projected for the next few years. Committing to integrate automatic tax filings for low-income individuals. Which makes sense because if there is only 1 or 2 slips to report, they shouldn’t have pay an accountant to do a simple return. Also, the $250 cheques that were going to be sent to each Canadian sometime in April 2025 was not included. So unfortunately I would hold off on booking the cruise that you all planned for using that.
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