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The Electronic Filing and Certification of Tax and Information Returns
Reporting Requirements for Trusts;
Fixing Contribution Errors in Registered Pension Plans
Submissions should be made by September 30, 2022.
February 4, 2022 Draft Legislation for Consultation
legislation was released on February 4, 2022 by the Department of Finance,
for consultation, for many items that were proposed in the 2021 Budget.
Canadians were invited to provide comments on the draft proposals and sample
notifiable transactions. Submissions should be received by April 5, 2022
Taxes applicable to Registered Investments;
Mandatory Disclosure Rules;
Avoidance of Tax Debts;
Reporting Requirements for Trusts;
Mutual Funds: Allocation to Redeemers; and
Crypto Asset Mining
Submissions relating to Interest Deductibility Limitation measure were accepted until May 5, 2022.
The budget proposes the following extensions to emergency income supports:
Canada Recovery Benefit (CRB)
extended for up to 12 additional weeks
to a maximum of 50 weeks
first 4 additional 12 weeks to be paid at $500 per week
remaining 8 weeks at $300 per week
new claimants after July 17, 2021 would receive the $30 per week
benefit, available until September 25, 2021
Canada Recovery Caregiving Benefit (CRCB)
extended for 4 additional weeks
to a maximum of 42 weeks at $500 per week
EI sickness benefits
enhance from 15 to 26 weeks, to take effect in summer 2022
Legislative amendments to provide authority for additional potential
extensions of the CRB and its associated suite of sickness and caregiving
benefits, as well as regular EI benefits until no later than November 20,
2021, should they be needed.
These proposed changes would apply to the 2021 and subsequent taxation years,
for DTC certificates filed on or after Royal Assent of the legislation.
The legislation was not included in Bill C-30.
Canada Workers Benefit (CWB)
Enhancements are proposed, starting in 2021, for the CWB for single
taxpayers, couples, and for individuals eligible for the disability tax
credit. This would provide a higher CWB for some individuals and couples,
and would result in more taxpayers being eligible for CWB.
Also proposed is the introduction of a "secondary earner exemption"
for individuals with an eligible spouse. This would allow up to $14,000 of
income of the lower-income spouse to be excluded from adjusted family net
income. This would allow more couples to benefit from the CWB.
These changes apply to most provinces and territories, but Alberta, Nunavut
and Quebec have provincial reconfiguration agreements that determine the amounts
for their Canada Workers Benefits. The 2021 changes for these will
probably not be known until the fall.
The budget proposes to end the practice of the CAI being claimed on the tax
return, and instead provide quarterly payments to taxpayers. The 2022 CAI
will not be claimed on the 2021 tax return. See our article on the Climate
If the repayment of COVID-19 benefits does not occur in the same tax year as
the receipt of the benefit, it is proposed to allow individuals the option to
claim a deduction on line 23200 (other deductions) for the year in which the benefit amount was received rather
than the year in which the repayment was made. This option would be
available for benefit amounts repaid at any time before 2023.
For this purpose, the included COVID-19 benefits are:
Individuals who have already filed their tax return for the year in which the
benefit was received would be able to request
an adjustment to their tax return for that year. CRA has indicated
they will not process adjustment requests until the legislation has received
Also proposed is an amendment to the Income Tax Act to ensure that the above
COVID-19 benefit amounts are included in the taxable income of individuals who
reside in Canada but are considered non-resident persons for income tax
Tax on Unproductive Use of Housing by Non-Resident Owners
Implement a national annual 1% tax
on the value of non-resident, non-Canadian owned residential real estate
considered to be vacant or underused
Effective January 1, 2022
All owners, other than Canadian citizens or permanent residents of Canada
must file a declaration as to the current use of the property
Significant penalties for failure to file
Other Personal Taxation Proposals
include postdoctoral fellowship income in "earned income" for
provide more flexibility to plan administrators of defined contribution
pension plans to correct for both under-contributions and
revision of the Part X.2 tax re registered investments holding property
that is not a qualified investment for the registered plans for which it is
registered, so that the tax is no longer charged in relation to the portion
of the units that are held in non-registered accounts.
proposals to limit opportunities for the abuse of charitable registration
status for terrorist financing purposes, and changes to the rules applicable
to all registered charities in respect of certain false statements.
Electronic Filing and Certification of Tax and Information Returns
Methods of Correspondence with Individuals and Businesses
proposal to provide CRA with the ability to send certain notices of
assessment electronically without the taxpayer having to authorize CRA to do
so, for individuals who file their tax return electronically and those who
employ the services of a tax preparer that files their tax returns
electronically. Taxpayers who file their tax returns in paper format
would continue to receive a paper notice of assessment from CRA.
proposal to change the default method of correspondence for businesses
that use CRA's My Business Account portal to electronic only, but businesses
could choose to also receive paper correspondence. This would apply in
Income Tax Act
Excise Tax Act,
Excise Act, 2001,
Air Travellers Security Charge Act, and
Part 1 of the Greenhouse Gas Pollution Pricing Act.
proposal to allow issuers of T4A (Statement of Pension, Retirement,
Annuity and Other Income) and T5 (Statement of Investment Income)
information returns to provide them electronically without having to also
issue a paper copy, and without the taxpayer having to authorize the issuer
to do so. This would apply in respect of information returns sent
A person or partnership is a tax preparer for a calendar year if, in
the year, they accept consideration to prepare more than 5 returns of
income for corporations, more than 5 returns of income for individuals
(other than trusts), or more than 5 returns of income of estates or
trusts. This comes into force on January 1, 2022.
electronic filing of tax returns to be required when more than 5 of
either corporate or individual tax returns are prepared, down from 10.
The exception for trusts would be removed.
maximum 5 paper returns of each type (corporate or individual) to be
filed each calendar year, down from 10. This would apply for calendar
years after 2021.
Filers of Information Returns:
threshold for mandatory electronic filing of income tax information
returns for a calendar year to be lowered from 50 to 5 returns, in
respect of a particular type of information returns. This would apply
for calendar years after 2021.
Corporations and GST/HST Registrants
require returns of most corporations and GST/HST registrants to file
electronic returns under the Income Tax Act and Excise Tax Act. This
would apply for taxation years beginning after 2021 for the Income Tax
Act and for reporting periods that begin after 2021 for the Excise Tax
Other Proposals re Electronic Payments and Signatures
proposals re thresholds for mandatory remittances under the Income Tax
Act, the GST/HST portion of the Excise Tax Act, Excise Act, w001, the Air
Travellers Security Charge Act and Part 1 of the Greenhouse Gas Pollution
Pricing Act. See Electronic
Payments on the Budget 2021 website.
eliminate the requirement that signatures be in writing on certain
prescribed forms. See Handwritten
Signatures on the Budget 2021 website.
Income Tax Measures
Emergency Business Supports
The following supports to be extended until September 25, 2021, with
additional qualifying periods to be added until November 20, 2021, should the
economic and public health situation warrant it, with subsidy rates to be
gradually phased out starting on July 4, 2021:
of Tax Debt: Measures to address highly aggressive tax plans that
attempt to eliminate the underlying tax liability of the transferor
Authorities: Amendments to confirm that CRA officials have the
authority to require persons to answer all proper questions, and to require
persons to respond to questions orally or in writing, in any form specified
by the relevant CRA official.
Notifiable Transactions - Mandatory Disclosure Rules
A limitation of liability clause in a professional engagement letter would normally not, in and of itself, trigger a reportable transaction reporting hallmark, provided that the purpose of the limitation clause is to generally limit the accountant’s liability for negligence (i.e., it is related to professional indemnity insurance)
Changes to the GST/HST system announced in the 2020 Fall Economic Statement,
with some amendments:
Require non-resident vendors supplying digital products or services to
consumers in Canada to register to collect GST/HST.
Require distribution platform operators to register under the normal GST/HST
rules to collect GST/HST for sales of goods shipped from a fulfillment
warehouse or another place in Canada, when those sales are made by
non-registered vendors through distribution platforms. Non-resident
vendors not using a distribution platform would also be required to register
for the same type of sales.
Apply GST/HST on all supplies of short-term accommodation in Canada
facilitated through a digital accommodation platform, such as Airbnb and
other similar platforms.
The budget includes a proposal to remove the
condition that where 2 or more individuals buy a new home together, each of them
must be acquiring the home for use as their primary place of residence or the
primary place of residence of a relation. The rebate would be available as
long as the new home is acquired for use as the primary place of residence of
any one of the purchasers or a relation of any one of the purchasers. This
measure would apply to a supply made under an agreement of purchase and sale
entered into on or after April 20, 2021.
The budget proposes to introduce a tax on the retail sale of:
new luxury cars and personal aircraft priced over $100,000, and
boats priced over $250,000
The tax for vehicles sold in Canada would apply at the point of purchase if
the final sale price paid by the consumer, not including the GST/HST or
provincial sales tax) is above the $100,000 or $250,000 threshold.
Importations of vehicles, aircraft and boats would also be subject to the tax.
for vehicles and aircraft priced over $100,000, the lesser of
duty on tobacco to be increased by $4 per carton of 200 cigarettes, with
corresponding increases for other tobacco products. Inventories held
by certain manufacturers, importers, wholesalers and retailers at the
beginning of the day on April 20, 2021 will be subject to an inventory tax
of $0.02 per cigarette, subject to certain exemptions. This measure
comes into force on April 20, 2021.