It is long overdue for the federal government to undergo comprehensive tax review / reform. We accurately predicted this, but our firm was surprised by the introduction by the Province of Ontario of a comprehensive tax review when it announced its Budget last week (not many details are available). Despite the calls of many from the tax community for over a decade, no introduction of comprehensive tax review / reform.We predicted there would not be an increase to the inclusion rate this year (since we believe the time for such an increase has passed) and thankfully we were correct. We have always not agreed with those predictions except for the last couple of years. Every year, almost without exception, there are a large number of prognosticators who predict the capital gains inclusion rate would increase. No increase in the capital gains inclusion rate.Thankfully, as we predicted, the Budget did not contain such measures. Like the above, some were predicting that corporate tax rates would increase especially given the government’s rhetoric that it likes to trumpet (including in this Budget) that the government will not engage in a “race to the bottom” for corporate tax rates. No such measures – other than amendments to the alternative minimum tax – are contained in the Budget as we predicted. There were some rumblings immediately prior to the Budget that the Government would introduce more “tax the rich” measures such as increased personal tax rates for the so-called “wealthy” or super-high income earners. There were some surprises, though, as we’ll explain further below.įirst, let’s quickly summarize what is NOT included in the Budget: Our firm did this via our Budget predictions podcast (which can be listened to here) and overall, surprisingly, we were somewhat accurate. It would have been good to at least see a plan towards budgetary balance.Įvery year, prior to the delivery, prognosticators predict what tax measures the Budget might contain. With every increasing dollar that goes to service debt financing costs, that is one less dollar that must be taken away that could provide future essential government services, additional tax revenues that need to be raised, a reduction of future services or a combination of all. Well, suffice it to say that our Firm is concerned and every Canadian should be given the high and ever increasing debt loads, rising interest rates and inflationary environment that our country is currently facing. When questioned on this, the Finance Minister’s answer came across as being unconcerned. While our Budget summary focuses exclusively on taxation topics relevant to our clients and friends, it’s worth noting that the Budget proposes a $40B+ deficit for the coming year with no plan to bring Canada’s finances back into balance.
On Ma(“Budget Day”), the Honourable Chrystia Freeland delivered the 2023 Federal Budget (the “Budget”).
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