On March 19, 2019, Minister of Finance, the Honourable William (Bill) Morneau tabled the government’s final budget prior to the Federal election, which will take place later this year. While historically many pre-election budgets offered up many benefits across the board for large corporations, small businesses and individuals, Budget 2019 did little in the way of following suit. Of note, there were no corporate or personal income tax rate changes. Rather, the government stayed their course choosing to focus on supporting the Canadian middle class; through initiatives such as establishing a national pharmacare program, investing in job creation and the improvement of the skills within the Canadian workforce. The Budget also offered support for first-time home buyers and provided stimulus for economic growth through incentives aimed at corporate innovation.
Key changes that companies should be aware of are significant amendments to the taxation of employee stock options (notably aimed at “large, long-established, mature firms”) as well as a broadening of the ability for Canadian controlled private corporations to access the fully refundable enhanced 35 per cent tax credit under the scientific research and experimental development program. Affirmation of Canada’s support to tighten up perceived abuses in the international tax system was also reiterated.
The tax highlights of Budget 2019 are summarized in our tax alert.
