More than 30 potential tax measures are set out in the Liberal Party’s 2021 campaign platform, some already announced, but most of them new.  We will keep you updated of any more changes as Tax Time approaches.

• COVID-19 support and economic recovery
• Tax measures for businesses
• Tax measures for individuals

COVID-19 Support and Economic Recovery

The federal government’s tax commitments related to the pandemic and associated economic issues include:

• extending the Canada Recovery Hiring Program to March 31, 2022
• introducing a tax credit for costs incurred by small businesses to improve ventilation

Tax Measures for Businesses

Other government promises related to corporate income and business taxes include the following:

Tax Rules for Landlords
Landlords would be required to disclose on their tax returns the rent they receive before and after renovations. A surtax would apply if the rent increase was excessive.

Anti-Flipping Tax
An anti-flipping tax on residential properties held less than 12 months will be introduced.

Tax Treatment of Large Corporate Owners of Residential Properties
The government intends to review the tax treatment of large corporate owners of residential properties such as real estate investment trusts. Look for big changes here!

Tax Measures for Individuals

On personal taxes, the government has laid out many potential new tax rules, deductions, and credits. These include:

Minimum Tax for Higher-Income Individuals
In addition to the existing alternative minimum tax, a minimum tax would apply to individuals in the top tax bracket to ensure they pay federal tax of at least 15 per cent.

Home Office Expenses
The home office flat rate deduction that applied for 2020 will be extended to 2021 and 2022, and the maximum deduction will be increased to $500.

First Home Savings Account (I don’t see much difference then with RRSPs)
A potential new savings account would allow Canadians under age 40 to contribute and save up to $40,000 on a tax-free basis, to use for their first home purchase, with no requirement to repay.

Employment Insurance (EI) Benefit for Self-Employed Individuals
A possible new EI benefit for self-employed Canadians would be delivered through the tax system and provide benefits similar to the current EI program.

Digital Platform Workers
There are plans for legislative changes to ensure that workers employed by digital platforms are covered by EI and the Canada Pension Plan (CPP), including employer contribution requirements.

Introduce New Non-Refundable Tax Credits
The government plans to introduce a number of credits that appear to be additions to the existing block of non-refundable credits carrying a credit rate of 15 per cent. These potential credits include:

• A Labour Mobility Tax Credit for the eligible expenses of workers in the building and construction trades, allowing them to claim a tax credit based on eligible travel and relocation costs of up to $4,000 (maximum credit of $600)
• A Multigenerational Home Renovation Tax Credit for costs of up to $50,000 for families adding a secondary unit to their home for an immediate or extended family member (maximum credit of $7,500)
• A Home Appliance Repairs Tax Credit for the cost of home appliance repairs performed by technicians up to $500 (maximum credit of $75)
• A Career Extension Tax Credit for individuals aged 65 and over who earn a minimum working income of $5,000 (maximum credit of $1,650; reference is also made to reducing a portion of tax payable on this income)

Changes to Existing Tax Credits
In addition to new tax credits, there are commitments for adjustments to some existing credits. These include:

• Reviewing the Disability Tax Credit and other federal benefit programs to ensure they are available to people experiencing mental health challenges
• Increasing the credit rate for the Eligible Educator School Supply Tax Credit to 25 per cent and expanding eligibility to include tech devices
• Increasing the Home Buyers’ Amount to $10,000 (from $5,000), resulting in an additional credit of $750
• Converting the Canada Caregiver Amount into a refundable, tax-free benefit of up to $1,250
• Increasing the maximum amount of expenses allowed for the Home Accessibility Tax Credit to $20,000 (from $10,000), for a maximum credit increase of $1,500
• Expanding the Medical Expense Tax Credit to include costs reimbursed to a surrogate mother for in vitro fertilization expenses