Tax Highlights from the 2024 Federal Budget

Canada’s Finance Minister, the Honourable Chrystia Freeland, tabled the 2024 federal budget on April 16, 2024.

As per the Budget, inflation has fallen from its June 2022 peak of 8.1% to 2.9% in January and to 2.8% in February 2024. Budget 2024 further advises that the labour market remains solid, with over 1.1 million more Canadians employed today than before the pandemic. While GDP per capita has declined, real GDP rose by 1.1% in 2023, avoiding the recession predicted by many forecasters.

 

Tax revenues increased by $1.3 billion, or 3.5%, compared to the same period in 2022/23, largely as a result of higher personal income tax revenue. The budget forecasts a deficit of $40.1 billion for 2023/24 and expects to remain in deficit for the next five fiscal years. The federal debt-to-GDP ratio is expected to decrease from 42.0% in 2023/24 to 41.5% in 2024/25, and eventually to 39.0% in 2028/29.

 

From a tax perspective, the largest single change is the increase to the capital gains inclusion rate from one-half to two-thirds for corporations and trusts, and on the portion of capital gains realized by individuals in the year that exceeds $250,000. The budget also introduces significant new and expanded credits and incentives on housing and clean energy.

 

Click here to get to the full article...