Federal Budget 2022 Highlights

The Federal Government released Budget 2022: A plan to grow our economy and make life more affordable on April 7th.?

Budget 2022 includes targeted investments aimed to make housing more affordable, create economic growth and innovation and fight climate change. Budget 2022 includes more than $31 billion in net new spending over the next five years.?

The Federal Budget’s projected deficit for 2022-23 is $52.8 billion which is lower than past projections and is expected to keep reducing each following year to $8.4 billion by 2026-27. The ratio of debt – to – GDP is also expected to decline. It will be a proportion of 45.1% in 2022-23 and will go down to 41.5% by 2026-27.

Here are some of the significant measures included in Budget 2022:

HOUSING AND AFFORDABILITY

·????????Introduction of the Tax-Free First Home Savings Account that would give first-time home buyers the ability to save up to $40,000. Contributions would be tax deductible and withdrawals would be non-taxable.

·????????Doubling the First-Time Home Buyers’ Tax Credit to $10,000, applying to homes purchased on or after January 1, 2022.

·????????Introduction of the new Housing Accelerator Fund to target creation of 100,000 net new housing units in the next 5 years

·????????Provide $475 million in 2022-23 to provide a one-time $500 payment to those facing housing affordability challenges

·????????Launch the Multigenerational home renovation tax credit which will provide a homeowner with up to $7,500 to build a secondary suite for a senior or an adult with a disability

·????????Provide $5.3 billion over 5 years in funding for dental care for Canadians with family incomes of less than $90,000 annually, starting with under 12 years old in 2022.

·????????Allow individuals to claim medical expenses related to surrogate motherhood or sperm, ova or embryo donations incurred in Canada in 2022 and subsequent years.

CLIMATE CHANGE

·????????Provide more than $3 billion in funding to make zero-emission vehicles more affordable and build a national network of charging stations.

·????????Creation of the Canada Growth Fund to attract private capital towards building a net-zero economy by 2050

OTHERS

·????????Phase out access to the small business tax rate more gradually, with access to be fully phased out when taxable capital reaches $50 million instead of $15 million.?Currently, small businesses can access a reduced federal tax rate of 9% on their first $500,000 of taxable income and a business can no longer access this lower tax rate once its level of capital reaches $15 million.

·????????Introduction of a temporary Canada Recovery Dividend, representing a one-time 15% on the 2021 taxable income above $1 billion of Canada’s largest banking and life insurers’ groups to help support economy

·????????Launch a legislative review of the digital currency sector – including the potential need for a central bank digital currency

·????????Implementation of the vaping tax starting October 1, 2022. A proposed federal excise duty rate would be $1 per 2ml for containers with less than 10ml of vaping liquid.?

·????????Launch a permanent 1.5 percentage point increase in corporate income tax rate of banking and life insurance groups on taxable income above $100 million

·????????Provide more than $8 billion in new funding for the Canadian Armed Forces, strengthen Canada’s contributions to our core alliances like NATO and NORAD and reinforce Canada’s cyber security

·????????Provide support for Ukraine including up to $1 billion in new loan resources?and additional $500 million in military aid

Sources: https://budget.gc.ca/2022/home-accueil-en.html