September 23, 2020
New measures, including the extension of some government subsidy programs and other small business initiatives were announced at yesterday’s Throne Speech. Our accounting partner, MNP has provided highlights from the Speech.
The second session of the 43rd Parliament opened a new session with the traditional Throne Speech from Her Excellency Right Honourable Julie Payette, Governor General of Canada. The speech, “A Stronger and More Resilient Canada”, provided an overview of the Government’s plan for moving forward through the COVID-19 pandemic. Some of the tax measures included in the plan are outlined below and will be further codified and enacted by announcements in the Fall Economic Update.
Support for Individuals
The Canada Emergency Response Benefit (CERB) will expire on October 3, 2020, as planned. Recipients of the CERB will then be supported by the Employment Insurance (EI) system. For Canadians who would not normally qualify for EI, the government will create a transitional Canada Recovery Benefit. EI will become the sole delivery mechanism for employment benefits and will be modified to include self-employed individuals and others not currently eligible.
The federal government will work towards introducing a free, automatic tax filing process for simple returns to ensure taxpayers receive the income benefits they need (such as Old Age Security (OAS), Canada Pension Plan (CPP), CPP Disability Benefits, etc.).
Support for Businesses
The federal government plans to launch a campaign to create over one million jobs, restoring employment to previous levels. As part of this plan, the Canada Emergency Wage Subsidy (CEWS) will be extended through to summer 2021.
Further steps to assist vulnerable businesses will include:
- Expanding the Canada Emergency Business Account (CEBA) to help businesses with fixed costs;
- Improving the Business Credit Availability Program; and
- Introducing further support for industries that have been the hardest hit, including travel and tourism, hospitality, and cultural industries like the performing arts.
In addition, the federal government announced plans to cut the corporate tax rate in half for clean technology companies as part of its climate action plan to make Canada a world leader in clean technology.
- Identifying additional ways to tax extreme wealth inequality, including finalizing its work on limiting the stock option deduction for wealthy individuals at large established corporations, and addressing corporate tax avoidance by digital giants.
- Increasing OAS once a senior turns 75 years of age, and boosting the CPP survivor’s benefit;
- Creating a new Canadian Disability Benefit modelled after the Guaranteed Income Supplement for seniors;
- Enhancing the First-Time Home Buyer Incentive, including in Canada’s largest cities; and,
- Accelerating steps to achieve a national, universal pharmacare program.
What Does This Mean?
The Throne Speech delivered a preview of the measures the federal government seeks to implement as part of its ongoing response to the COVID-19 pandemic. The government has committed to presenting a Fall Economic Update which will outline details on how the announcements made today will be implemented. MNP will provide an analysis of the impacts of these announcements upon the release of the Fall Economic Update. MNP continues to work with government to ensure the needs of Canadians and Canadian businesses are met.
A financial plan can help manage risk and navigate these challenging times.
To set up a plan, or review your existing plan, talk to an Investment Planning Advisor* from CDSPI.
1.800.561.9401 | firstname.lastname@example.org