On March 28, 2023, Finance Minister Chrystia Freeland presented the 2023 federal budget for “Canada’s plan: a strong middle class, an affordable economy, a prosperous future”.
Among other things, this budget aims to make life more affordable for Canadians, invest in public health care and access to affordable dental care, and stimulate affordable energy, good jobs and a growing clean economy.
Measures for private individuals
In particular, the government will provide targeted inflation relief to nearly 11 million low-income Canadians through the Goods and Services Tax (GST) credit, increase assistance to students through the Canada Student Financial Assistance Program, enhance RESPs with an increase in the Registered Education Savings Plan limit, and officially launch the new Tax-Free Savings Account for first-time home buyers on April 1, 2023.
The 2023 budget also proposes legislative changes to raise the AMT (Alternative Minimum Tax) rate from 15% to 20.5%, in order to further limit the use of tax advantages for the wealthiest Canadians. These measures could come into effect as early as the 2024 taxation year.
Measures for businesses
Budget 2023 proposes new measures to facilitate the use of employee group trusts (EGTs) to acquire or hold shares in a company. Group trusts would enable the purchase of a business without requiring employees to pay directly for the acquisition of shares. For business owners, the creation of such a trust would offer an additional avenue for succession planning.
The government is also proposing to amend the rules in Bill C-208 to ensure that they only apply when a true intergenerational transfer of a business has taken place. These proposed changes include new conditions that would apply to transfers made on or after January 1, 2024.
A number of economic measures and initiatives are also planned to stimulate a greener economy.
View the 2023 budget summary
We invite you to consult the Ordre des CPA’s summary of the 2023 federal budget. It outlines the budget and the measures affecting individuals and businesses, as well as consumption taxes and international taxation.
The government is making its 2023 budget available to you by theme or in its entirety.
Enjoy your reading!
