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Home   ->   Federal Budget  -> 2024 Federal Budget

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

Investors / Landlords / Business Owners / Capital Property Owners - Capital Gains Inclusion Rate Change

Other Personal Tax Measures

Business and Other Tax Measures

2024 Budget Legislation

2024 Federal Debt Forecasts in $billions

bullet2023 $1,173.0 - actual
bullet2024 $1,215.5 = approximately $31,087 for every man, woman and child
bullet2025 $1,255.3
bullet2026 $1,294.1
bullet2027 $1,324.9
bullet2028 $1,351.7
bullet2029 $1,371.7

2024 Federal Deficit Forecasts in $billions

bullet2022-23 $35.3 - actual
bullet2023-24 $40.0
bullet2024-25 $39.8
bullet2025-26 $38.9
bullet2026-27 $30.8
bullet2027-28 $26.8
bullet2028-29 $20.0

2024 Forecast for Annual Interest on the Federal Debt in $billions

bullet2022-23 $35.0
bullet2023-24 $47.2
bullet2024-25 $54.1 - exceeds Health transfers to provinces by $2 billion
bullet2025-26 $54.9 - exceeds Health transfers to provinces by $0.2 billion
bullet2026-27 $57.0
bullet2027-28 $60.9
bullet2028-29 $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

bulletIncreasing the RRSP Home Buyers' Plan (HBP) maximum withdrawal from $35,000 to $60,000
bulletAllowing 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.
bullet30-year mortgage amortizations will be allowed for first-time home buyers, but only if they are purchasing newly built homes, effective August 1, 2024.
bulletTemporarily 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.
bulletRemove 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.
bulletIntroduce a new Secondary Suite Loan Program to provide homeowners up to $40,000 in low-interest loans to add secondary suites to their homes. Before taking advantage of this, homeowners should read the information One Principal Residence (Housing Unit) Per Couple, and seek professional advice if necessary.

Entrepreneurs / Farmers / Fishers

bulletIncrease 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.
bulletIntroduce the Canadian Entrepreneurs' Incentive (see this link for more details):
bulletwhich would provide a capital gains inclusion rate that is 1/2 the prevailing inclusion rate, on up to $2 million in capital gains per individual over their lifetime.
bulletwill be phased in by increments of $200,ppp per year, beginning on January 1, 2025, before reaching a value of $2 million by January 1, 2034.
bulletWith the 2/3 capital gains inclusion rate proposed in Budget 2024, this would result in an inclusion rate of 1/3 for qualifying dispositions.
bulletThis measure would apply in addition to any available capital gains exemption.
bulletFor dispositions that occur on or after January 1, 2025.

Investors / Landlords / Business Owners / Capital Property Owners / Estate Planning - Capital Gains Inclusion Rate

bulletIncrease 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.
bulletThe $250,000 threshold would apply to capital gains net of any:
bulletcurrent-year capital losses;
bulletcapital losses of other years applied to reduce current-year capital gains; and
bulletcapital gains for which the LCGE, the proposed Employee Ownership Trust Exemption or the proposed Canadian Entrepreneurs' Incentive is claimed
bulletThere is no legislation yet, so we don't know if there will be any exemption for family cottages, deemed disposals on death, or anything else.

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-armís 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."

Other Personal Tax Measures

bulletVolunteer 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.
bullet Mineral Exploration Tax Credit: Extend eligibility for one year, to flow-through share agreements entered into on or before March 31, 2025.
bulletAlternative Minimum Tax (AMT): further changes to the previously-provided proposals.
bulletCanada 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.
bulletDisability Supports Deduction: expand the list of expenses recognized under this deduction.
bulletEmployee Ownership Trust Tax Exemption: Further details provided on the already-proposed exemption and conditions.
bulletQualified 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.
bulletDeduction 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.
bulletIndigenous Child and Family Services Settlement: make tax-free:
bulletincome of the trusts established under the First Nations Child and Family Services, Jordan's Principle, and Trout Class Settlement Agreement, and
bulletpayments received by class members as beneficiaries of the trusts.
bulletThis measure would apply to the 2024 and subsequent taxation years.

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.

2024 Budget Legislation

On April 30, 2024 the government announced a  Notice of Ways and Means Motion which then became Budget Implementation Act, 2024, No. 1.

On May 2, 2024 Bill C-69, Budget Implementation Act, 2024, No. 1 was tabled and past first reading. It includes many tax measures, but it does not include the change to the capital gains inclusion rate.

Revised: May 16, 2024

 

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