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2019 Federal Budget - March 19, 2019

All budget measures are subject to legislative approval.  Not all budget measures are included below, just the main tax measures.  See the 2019 Federal Budget website for complete information.

Subsequent legislation:

April 4, 2019 Notice of Ways and Means Motion and Explanatory Notes

Bill C-97, Budget Implementation Act, 2019 , No. 1 (BIA 1) tabled April 8, 2019, Royal Assent June 21, 2019.

Draft Legislation Relating to the Excise Tax Act and Explanatory Notes released May 17, 2019.

Draft Legislation Supporting Conversion of Health and Welfare Trusts into Employee Life and Health Trusts released May 27, 2019 - comments could be provided until July 31, 2019.  This was a proposal from Budget 2018.

Notice of Ways and Means Motion to amend the Income Tax Act and Explanatory Notes released June 17, 2019 - re stock options. Interested parties had until September 16, 2019 to provide comments.

Draft legislation to implement tax and other related measures announced in Budget 2019 that have not yet been legislated released July 30, 2019.  Interested parties had until October 7, 2019 to provide comments.

Legislative proposal released August 29, 2019 re definition of shared-custody parent, and explanatory notes. This will change the definition of shared-custody parent to a parent who resides with the qualified dependant at least 40% of the time.  This measure will be retroactive to payments arising after June 2011.

All federal draft legislation, whether budget-related or not, can be found on the Department of Finance website Draft Legislation page.

Personal Income Tax Measures

Personal Income Tax Credit for Digital Subscriptions

Income Tax Act s. 118.02

Taking Action to Enhance Tax Compliance in the Real Estate Sector

    - CRA audit teams, notably in BC and Ontario, will ensure tax provisions regarding real estate (including principal residences) are being followed.

Carrying on Business in a Tax-Free Savings Account

    - It is proposed that joint and several liability for tax owing on income from carrying on a business in a TFSA be extended to the TFSA holder, instead of just to the trustee of the TFSA (i.e., a financial institution).  Day-trading in a TFSA could be considered to be a business, with the income taxed at the highest personal tax rate.

Employee Stock Options

    - changes to limit the benefit of the employee stock option deduction for high income individuals employed at large, long-established, mature firms.  The changes do not affect employee stock options granted by Canadian-controlled private corporations (CCPCs).  See June 17, 2019 Notice of Ways and Means Motion and Backgrounder: Proposed Changes to the Tax Treatment of Employee Stock Options.  

For analysis by BDO Canada of the tax implications, see Proposed Changes to the Stock Option Benefit Rules to Take Effect on July 1, 2021.

The proposed legislation did not come into force on January 1, 2020 as was planned. It was announced in the Fall 2020 Economic Statement that the new tax rules would apply to employee stock options granted after June 2021.

Cannabis as an Eligible Medical Expense

Income Tax Act s. 118.2(2)(u), Cannabis Regulations s. 264(1)

With the legalization of cannabis, as of October 17, 2018, eligible medical expenses include, for a patient who is the holder of an appropriate medical document, the cost of cannabis, cannabis oil, cannabis plant seeds or cannabis products purchased for medical purposes from a holder of a licence for sale of cannabis products.

This measure was included in Bill C-97 which received Royal Assent in June 2019.

Home Buyers' Plan (HBP)

The withdrawal limit for the RRSP Home Buyers' Plan is increased to $35,000 for withdrawals after March 19, 2019.  This is included in Bill C-97 which received Royal Assent in June 2019.

Changes will also be made to extend access to the HBP after the breakdown of a marriage or common-law partnership.  For more information see the above HBP link.

Registered Disability Savings Plans (RDSPs)

    - changes to circumstances requiring termination of RDSPs

Canada Training Credit

The Canada Training Benefit includes the Canada Training Credit Refundable Tax Credit, as well as an EI Training Support Benefit, expected to be available in late 2020, which would provide up to 4 weeks of income support every 4 years.  The government will also consult with provinces and territories re changes to labour legislation to support new Leave Provisions that would ensure that workers are entitled to leave and job protection while on training and receiving the EI Training Support Benefit.

Other Non-Income-Tax Measures

First-Time Home Buyer Incentive

CMHC will fund up to 10% of a first-time home buyer's purchase via a shared-equity mortgage (SEM).  The Incentive amount is up to $40,000 (10%) for a new home or $20,000 (5%) for an existing home.   The incentive would be repaid when the home is sold, or in 25 years, whichever is first, but could be repaid earlier if desired.  The Incentive program will launch on September 2, 2019.

Zero-Emission Vehicle (ZEV) Incentive Program

Student Loans

    - lower interest rates, new interest-free 6-month grace period after a student loan borrower leaves school

Guaranteed Income Supplement (GIS)

The Budget proposes to enhance the GIS earnings exemption, beginning with the July 2020-21 benefit year.  Bill C97 included the legislative provisions to amend the Old Age Security Act to provide a new exemption for purposes of calculating the GIS.  The new exemption excludes the first $5,000 of a person's employment and self-employment income as well as 50% of their employment and self-employment income greater than $5,000 but not exceeding $15,000.

Canada Pension Plan (CPP) Retirement Pension

    - automatic enrolment, extending opt-out period.

National Pharmacare

Business Income Tax Measures

Small Business Deduction - Farmers and Fishers

    - Relief to CCPCs carrying on a farming or fishing business, re rules designed to prevent the multiplication of the small business deduction:  proposal to extend that relief to sales of farming products and fishing catches to any arm's length corporation.  This applies to tax years that begin after March 21, 2016.

Capital Cost Allowance for Zero Emission Vehicles

    - new $55,000 capital cost limit for qualifying zero-emission vehicles which would otherwise be included in class 16.  The new CCA class will be class 55, and includes taxis, vehicles acquired for the purpose of short-term renting or leasing, and heavy trucks and tractors designed for hauling freight.  The new $55,000 limit will be reviewed annually for appropriateness.

    - the new CCA class for previous class 10 and 10.1 zero-emission vehicles will be class 54, for which the capital cost limit is still $30,000.

    - full tax write-off in the year qualifying zero-emission vehicles (fully electric, a plug-in hybrid with a battery capacity of at least 7 kWh or fully powered by hydrogen) are put to use.  Note:  battery capacity was stated to be 15 kWh in the 2019 Budget, but was revised to 7 kWh before 3rd reading in the legislature.

    - immediate expensing (100% enhanced allowance) will apply to eligible vehicles purchased on or after March 19, 2019 and available for use before January 1, 2024.  The enhanced allowance rate will be 75% for vehicles available for use in 2024/25, and 55% for vehicles available for use in 2026/27.  CCA will be deductible on any remaining balances in the new classes on a declining-balance basis at a rate of 30% for class 54 and 40% for class 55.

    - Vehicles for which assistance is paid under the new federal purchase incentive announced in Budget 2019 will be ineligible for the first-year immediate expensing.

Canadian Journalism Support

Proposals

Sales Taxes

Adjusting the Rules for Cannabis Taxation

    - excise taxation changes regarding cannabis edibles

For information on all tax measures, see the Tax Measures Supplementary Information (pdf) on our website.  This pdf also contains the Notice of Ways and Means Motion.  We created this pdf because the Budget website did not provide this information in a separate file, but as part of the large Budget Plan pdf document.

Revised: September 20, 2024