News release

New tax revenue streams, deficit spending, central themes in Federal Budget 2021

RSM Canada provides perspectives on proposed tax and economic measures

Apr 19, 2021
Apr 19, 2021
0 min. read

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RSM Canada, the leading provider of audit, tax and consulting services focused on the middle market, issued key perspectives for Canada’s middle market businesses following today’s much-anticipated Budget 2021.

As part of its highly anticipated budget unveiling, the Government of Canada laid out key tax policy changes aimed at creating new sources of federal revenue, including limits on interest payment deductions, a digital services tax on large technology corporations at a rate of three per cent of revenue, and a luxury tax on high-cost items.

In a move to cool a hot property market, the government also announced plans for a tax on non-resident, non-Canadian owned vacant properties. The budget did not include any significant changes to personal taxes, nor did it include an increase in the GST or the creation of a wealth tax.

“The deficit spending outlined in this year’s federal budget hinges on full recovery of the Canadian economy over the next few years. It also leans heavily on new sources of revenue with new taxes and a focus on protecting Canada's tax base – including a national tax on vacant property owned by non-Canadian non-residents, a luxury tax on big-ticket items and a digital services tax.” explains Maria Severino, national tax leader at RSM Canada.

Additional plans include robust new measures aimed at increasing fairness, such as:                                                                                            

  • Enhanced reporting requirements
  • Enhanced audit power for the Canada Revenue Agency
  • Extended reassessment period in certain circumstances

In addition, the government also laid out plans to continue support for small and medium-sized businesses, including:

  • Extension of the wage subsidy (CEWS) and rent subsidy (CERS) programs
  • Canada-wide hiring program to make it easier for businesses to hire back laid off employees or bring on new ones
  • Canada Recovery Benefit extended
  • Reform the current Employment Insurance (EI) program

Alex Kotsopoulos, partner, projects and economics, at RSM Canada, added, “With more than 200 new spending measures, including new and extended business aid programs and income support, Canada’s small to medium-sized businesses remain at the forefront of our country’s economic recovery. Support for them through programs like the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy and Lockdown Support recognize just how important these businesses are to creating jobs and growth.”

For more information about the Federal Budget’s implications for Canada’s middle market, visit our Budget Commentary Resource Centre.

About RSM Canada

RSM is the leading provider of professional services to the middle market. The clients we serve are the engine of global commerce and economic growth, and we are focused on developing leading professionals and services to meet their evolving needs in today’s ever-changing business landscape. Our purpose is to instill confidence in a world of change, empowering our clients and people to realize their full potential.

RSM Canada LLP provides public accounting services and is the Canadian member firm of RSM International, a global network of independent assurance, tax and consulting firms with 64,000 people in 120 countries. RSM Canada Consulting LP provides consulting services and is an affiliate of RSM US LLP, a member firm of RSM International. For more information visit, like us on Facebook, follow us on X and/or connect with us on LinkedIn.