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2024 Legislation Subsequent to the 2024 Federal Budget
GST/HST 2-month "Vacation"
Late in November 2024, the Federal government proposed to provide a temporary exemption (December 14, 2024 to February 15, 2025) for certain items which would normally attract GST or HST. Unfortunately, this was not well thought-out prior to the announcement or the tabling of legislation. It will not provide much in savings for taxpayers, and all retailers will have the burden of reprogramming their point-of-sale systems in December and again in February. This will be more of a burden for small retailers who may have to outsource the reprogramming, at significant cost.
Bill C-78, the Tax Break for All Canadians Act, was tabled in the House of Commons and received Royal Assent on December 12, 2024. See Legislation to put more money in your pocket receives Royal Assent.
Canada Revenue has provided guidance on this measure, with details of which items qualify for the exemption. See GST/HST holiday tax break.
The Working Canadians Rebate
This is another poorly thought-out measure, which proposes to provide a tax-free $250 rebate to each Canadian who worked in 2023 and earned $150,000 or less individual net income, and meets the following requirements:
 | 2023 tax return filed by December 31, 2024, and:
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| resident of Canada on March 31, 2025; | ||||||
| not incarcerated for a period of at least 90 days immediately prior to April 1, 2025; and, | ||||||
| not deceased on April 1, 2025. |
This excludes any Canadians who are unable to work because of disability or who are retired and thus not working.
While the announcement suggested payments would occur in early spring 2025, the March 31st and April 1st requirements make it improbable that payments will be made before May 2025.
As of November 29, 2024, no legislation has yet been tabled for this provision.
See More money in your pocket: The Working Canadians Rebate.
2024 Federal Budget - April 16, 2024
See Department of Finance - Budget 2024 for full budget information.
Contents
2024 Federal Debt Forecasts in $billions
2024 Federal Deficit Forecasts in $billions
2024 Forecast for Annual Interest on the Federal Debt in $billions
2024 Federal Budget Tax Measures
Home Buyers / Home Owners / Home Builders
Entrepreneurs / Farmers / Fishers
Employee Ownership Trust Tax Exemption
Business and Other Tax Measures
2024 Federal Debt Forecasts in $billions
| 2023 $1,173.0 - actual |
| 2024 $1,215.5 = approximately $31,087 for every man, woman and child |
| 2025 $1,255.3 |
| 2026 $1,294.1 |
| 2027 $1,324.9 |
| 2028 $1,351.7 |
| 2029 $1,371.7 |
2024 Federal Deficit Forecasts in $billions
| 2022-23 $35.3 - actual |
| 2023-24 $40.0 |
| 2024-25 $39.8 |
| 2025-26 $38.9 |
| 2026-27 $30.8 |
| 2027-28 $26.8 |
| 2028-29 $20.0 |
2024 Forecast for Annual Interest on the Federal Debt in $billions
| 2022-23 $35.0 |
| 2023-24 $47.2 |
| 2024-25 $54.1 - exceeds Health transfers to provinces by $2 billion |
| 2025-26 $54.9 - exceeds Health transfers to provinces by $0.2 billion |
| 2026-27 $57.0 |
| 2027-28 $60.9 |
| 2028-29 $64.3 |
2024 Federal Budget Tax Measures
Many tax measures have been proposed. All measures are subject to legislative approval.
Home Buyers / Home Owners / Home Builders
| Increasing the RRSP Home Buyers' Plan (HBP) maximum withdrawal from $35,000 to $60,000 | ||||||
| Allowing those who made HBP withdrawals after January 1, 2022 and those who will make withdrawals prior to the end of 2025 to take more time to begin repayments, up to 5 years in total rather than 2. | ||||||
| 30-year mortgage amortizations (see additional changes below) will be allowed for first-time home buyers
(at least one of the borrowers must be a first-time homebuyer),
but only if they are purchasing newly built homes, effective August
1, 2024. To be considered a first-time homebuyer, a borrower must meet one
of the following criteria:
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| Temporarily increasing CCA rate from 4% to 10% for new purpose-built rental projects which begin construction on or after April 16, 2024 and before January 1, 2031, that are available for use before January 1, 2036. | ||||||
| Remove the GST for student residences built for public universities, public colleges, and public school authorities. This will apply to new student residences that begin construction on or after September 14, 2023 and before 2031, as long as construction is completed before 2036. | ||||||
| Buying real estate from a non-resident - the withholding tax for this will increase from 25% to 35% effective January 1, 2025. See Non-Resident Dispositions of Taxable Canadian Property from Budget 2024. |
30-Year Mortgage Amortizations, $1.5 Million Price Cap for Insured Mortgages
A September 16, 2024, Finance Canada news release announced that eligibility for 30-year mortgage amortizations would be extended to all first-time homebuyers, not just first-time homebuyers of new builds, as well as to all buyers of new builds, not just first-time homebuyers of new builds.
The news release also announced the increase of the cap for insured mortgages to $1.5 million from $1 million.
Both of these changes are effective December 15, 2024.
Secondary Suite Loan Program - Principal Residence Exemption - GST on Value of Laneway Home
An October 8, 2024 Finance Canada news release announced details regarding Mortgage Insurance Rule Changes to Enable Homeowners to Add Secondary Suites.
The budget originally indicated this would provide homeowners up to $40,000 in low-interest loans to add secondary suites to their homes, or laneway homes to their properties. The news release does not mention low-interest loans, and indicates that the additional financing must not exceed the project costs, so probably does not have a $40,000 limit. The new insured mortgage refinancing product will be available effective January 15, 2025.
The new units must be fully self-contained units with separate entrances, which means it is unlikely they'll be eligible for the principal residence exemption. Before taking advantage of this, homeowners should read the information One Principal Residence (Housing Unit) Per Couple, and seek advice from a CPA tax specialist or a tax lawyer.
If a laneway home is built and then rented long term, GST/HST will be payable on the value of the new home when it is first rented, less credits for tax paid on the construction. See the LinkedIn post (not necessary to be a member to view) by Noah Sarna, Commodity Tax Partner at Thorsteinssons Tax Lawyers, Hidden tax trap in changes to mortgage insurance rules for adding secondary suites.
Tax Tips/Traps:
Secondary suites and laneway homes may not be eligible for the principal residence exemption!
GST/HST will be payable on the value of a new laneway home when it is first rented long-term.
Entrepreneurs / Farmers / Fishers
| Increase the Lifetime Capital Gains Exemption (LCGE) from $1,016,836 to $1.25 million of eligible capital gains, for dispositions that occur on or after June 25, 2024 until December 31, 2025. Indexation will resume in 2026. In Budget 2024 see Lifetime Capital Gains Exemption. | ||||||||||
| Introduce the Canadian
Entrepreneurs' Incentive (see this link for more details):
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Investors / Landlords / Business Owners / Capital Property Owners / Estate Planning - Capital Gains Inclusion Rate
| Increase the capital gains inclusion rate from 1/2 to 2/3 for corporations and trusts, and from 1/2 to 2/3 on the portion of capital gains realized in the year that exceed $250,000 for individuals, for capital gains realized on or after June 25, 2024. | ||||
| According to the June
10, 2024 Technical Backgrounder on the Capital Gains Inclusion Rate:
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See Draft Legislation below, released for consultation on August 12, 2024.
See Capital Gains Inclusion Rate in the 2024 Federal Budget.
Technical Interpretation TI 2024-1016011E5 - General Anti-Avoidance Rule (GAAR), dated April 29, 2024 discussed whether the crystallization of an accrued gain prior to the increase in the capital gains inclusion rate is subject to GAAR. The position of CRA is that the crystallization, "solely as a means of ensuring access to the current inclusion rate, would not, in itself, be subject to GAAR". However, the TI also stated: "It is important to note, however, that the crystallization of an accrued capital gain as part of a series of transactions, one of the main purposes of which is to obtain a tax benefit (other than, or in addition to, the taxation of an accrued gain at the current inclusion rate) would not be immune from scrutiny under the GAAR. In particular, we would refer you to our letter dated February 29, 2024 (CRA document 2023-0987941I7), in which we stated that the Income Tax Rulings Directorate would not provide rulings in respect of a series of transactions in which an individual shareholder proposes to engage in non-arm’s length transactions, one of the main purposes of which was to facilitate the extraction of corporate retained earnings other than in the form of a dividend."
Employee Ownership Trust Tax Exemption
The 2024 Federal Budget provided further details on the proposed Employee Ownership Trust Tax Exemption.
From the 2023 Federal lBudget: New rules coming into force January 1, 2024 would make it easier to establish EOTs:
| extend the capital gains reserve to 10 years for qualifying sales to an EOT |
| create an exception to the current shareholder loan rule for EOTs |
| exempt EOTs from the 21-year deemed disposition rule that applies to certain trusts |
The 2024 Federal Budget included further details on the proposed exemption and conditions.
Legislation is included in:
Bill C-59 Fall Economic Statement Implementation Act, 2023 and
Bill C-69 Fall Economic Statement Implementation Act, 2024.
It's important for anyone thinking of pursuing EOTs to listen to the August 2024 Life in the Tax Lane video from Video Tax News, which reveals surprising details of the EOT and discusses whether it is an exemption from tax, or a deferral of tax.
Tax Tip: Thinking of establishing an EOT? Seek advice from a qualified tax professional!
Other Personal Tax Measures
| Volunteer Firefighters and Search and Rescue Volunteers: tax credits for volunteer firefighters and search and rescue volunteers will be doubled from $3,000 to $6,000 for 2024 and subsequent years. This provides a $900 reduction of taxes payable. | ||||||
| Mineral Exploration Tax Credit: Extend eligibility for one year, to flow-through share agreements entered into on or before March 31, 2025. | ||||||
| Alternative Minimum Tax (AMT): further changes to the previously-provided proposals. | ||||||
| Canada Child Benefit (CCB): extend eligibility for 6 months after a child's death, if the individual would have otherwise been eligible for the CCB in respect of that child. | ||||||
| Disability Supports Deduction: expand the list of expenses recognized under this deduction. | ||||||
| Qualified Investments for Registered Plans: invite stakeholders to provide suggestions on how the qualified investment rules could be modernized on a prospective basis to improve the clarity and coherence of the registered plans regime. | ||||||
| Deduction for Tradespeople's Travel Expenses: consider bringing forward amendments to the Income Tax Act to provide for a single, harmonized deduction for tradespeople's travel that respects the intent of Bill C-241, which provides for a deduction with no cap on expenses, retroactive to the 2022 taxation year. | ||||||
| Indigenous
Child and Family Services Settlement: make tax-free:
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Business and Other Tax Measures
There are many business income tax measures, international income tax measures, and sales and excise tax measures. See Tax Measures: Supplementary Information for information on all proposed tax measures. The initial Notices of Ways and Means Motions are also available at that link.
Canada Disability Benefit
Budget 2024 announced that consultations on this benefit would begin soon. See 2.1 Taking Care of Every Generation and scroll down to (or do a search for) Launching the Canada Disability Benefit.
See Canada Disability Benefit (CDB) - Consultations were announced in June 2024 regarding the Canada Disability Benefit Regulations.
2024 Budget Legislation
Notice of Ways and Means Motion released September 23, 2024
Draft legislation was released for consultation on August 12, 2024, followed by
| Explanatory Notes on August 14, 2024 regarding the Capital Gains Inclusion Rate (CGIR). |
| Explanatory Notes on August 15, 2024 regarding the Technical Amendments to the Income Tax Act and Regulations - includes Bare Trusts |
Interested Canadians were invited to email their comments by September 3, 2024 for the changes to the Capital Gains Inclusion Rate (CGIR) and the Lifetime Capital Gains Exemption (LCGE), and by September 11, 2024 for other measures.
See the Life in the Tax Lane September 2024 video which addresses the August draft legislation.
On June 10, 2024 a Notice of Ways and Means Motion was made available regarding the capital gains inclusion rate (CGIR), with "updated draft legislation" to follow in July.
On April 30, 2024 the government announced a Notice of Ways and Means Motion which then became Bill C-69, Budget Implementation Act, 2024, No. 1. Bill C-69 received Royal Assent on June 20, 2024.
Revised: December 13, 2024