Canada


Canadian Budget Sees Anti-Avoidance Measures

Posted on April 1st, by Global Tax Weekly in Tax Avoidance. No Comments

Governments now compete fiercely for foreign investment, and the reforming of tax codes is arguably the most effective way to achieve results, at least in the short-term. Indeed, the general consensus is now that the TCJA, for all its flaws and quirks, has tilted the competitive landscape towards the US. And away from Canada? There is a large body of taxpayers, tax advisers, businesses, think tanks and other commentators there who seem to think so, given the increasing frequency of the warnings they are sounding about a growing competitiveness gap either side of the 49th parallel. They are unlikely, then, to have been very inspired by the Canadian Government’s 2019 Budget, announced on March 19, which, with anti-avoidance as its central theme, concentrated on tax claw-backs rather than tax giveaways.

Is the Canadian Government therefore unconcerned? Or merely just complacent? It … Read More »


Canada In A Tax Quandary

Posted on November 30th, by Global Tax Weekly in Corporation Tax. No Comments

Canada has been studying the US tax reforms and their potential impact on the Canadian business environment, economy, and investment since the start of the year. This indicates that it is clearly worried about the possible erosive effect they will have on Canada’s competitiveness.

However, while it was never likely that a Canadian Government that has accorded a high priority to tax fairness was going to match the US corporate tax cut dollar for dollar, business will be forgiven for not getting very excited about the outcome of the Finance Department’s review: new write-off incentives and an investment incentive.

Under the proposals, the Government will allow the full cost of machinery and equipment used in the manufacturing and processing of goods to be written off immediately for tax purposes. Immediate expensing will apply to qualifying assets acquired after November 20, 2018. It … Read More »


Canada Concerned By US Tax Reforms

Posted on June 13th, by Global Tax Weekly in Corporation Tax. No Comments

US tax reforms are causing a certain amount of competitive anxiety in some of world’s major economies, especially in Canada, given that its geographical proximity to the US makes it doubly vulnerable to such competitive pressures. And the results of the International Monetary Fund’s latest assessment of the Canadian economy will have done nothing to assuage these concerns.

Often, the IMF’s messages get lost behind a thick fog of economic jargon. But in this case its conclusions were quite clear. Its staffers wrote of “economic anxiety,” of Canada as “a less attractive destination for investment,” of substantial “shifting of real activity and profit,” and of the need for a “careful rethink of Canadian tax policy.”

Surveys suggest that businesses on the ground in Canada are growing increasingly worried about the future too, due largely to the tax and trade policies of the US. … Read More »


Controversy Surrounds Canadian Tax Reform Proposals

Posted on October 10th, by Global Tax Weekly in Individual Taxation. No Comments

While the US Government is attempting to reduce the tax burden on small businesses, Canada seems to want to go the other way. At least its Government does.

Governments these days are fond of claiming their openness, and their willingness to listen to taxpayers. In Canada’s case, the Government says it will ”act on what it has heard” during a consultation on controversial reform of tax planning rules surrounding the use by middle- and high-income taxpayers of corporate entities as tax planning vehicles.

But even without an official consultation exercise, the Government would have been hard-pressed not to have noticed the stir these proposals caused within Canada’s business community. Barely a week has gone by since the draft legislation was published that somebody hasn’t spoken out in vociferous tones against the reforms. Indeed, the small business community’s “spontaneous, grassroots response,” as Dan Kelly, President … Read More »


IMF Impressed With Canada’s Pro-Growth Policies

Posted on October 19th, by Global Tax Weekly in Budgets. No Comments

After little more than a year in power, it’s probably too early to judge Justin Trudeau and his Liberal Government’s handling of the Canadian economy. But looking from afar, it seems to be a case of so far so good. The IMF at least seems impressed. Welcoming the new Government’s pro-growth policies, it predicted in June this year that measures contained in the last Budget would boost GDP by 0.5 percent in each of the next two fiscal years.

However, it is those “pro-growth policies” – essentially a euphemism for higher public spending – have seen Canada go from a budget surplus to a budget deficit either side of the last election. And worryingly, while spending has been rising, tax revenues have been fluctuating. This is despite the fact that, generally speaking, the new Government has been raising taxes – or … Read More »


Death And Taxes

Posted on February 15th, by Global Tax Weekly in Compliance, Individual Taxation, Inheritance Tax. No Comments

As the famous expression, usually attributed to Benjamin Franklin, goes, “in this world nothing can be said to be certain, except death and taxes.” But what about tax after death? It’s probably safe to assume that in Franklin’s world, death was a blessed relief from tax. However, as it turns out, sometimes the two are not mutually exclusive, at least in the eyes of some tax authorities. In Canada for example, death is no excuse for not filing your tax return, according to the Canada Revenue Agency. Not that you are expected to submit a return from beyond the grave. That would just be silly. No, under Canadian rules this unfortunate task falls to the legal representative of the deceased, as it no doubt does in most jurisdictions.

I suppose by the strict letter of the law, if you shuffle … Read More »


Trudeau Faces Challenges

Posted on December 14th, by Global Tax Weekly in Elections, Government, Individual Taxation. No Comments

Newly elected Canadian Prime Minister, Justin Trudeau has been bedazzling world leaders recently with his good looks and youthful bonhomie. But will the Liberals work similar magic on the Canadian economy with their fiscal plans? I fear not. To its credit, the new Government is delivering on its central tax pledge, to cut income tax for those in the middle and hike tax for those at the top. But one recent study suggests that far from raising extra revenue — money intended to subsidize the middle class tax cut — the plan to shift the tax burden to top earners could actually cost federal and provincial governments. The C D Howe Institute’s Alexandre Laurin, the author of the report, said: “The Liberal election platform said that these changes would be more or less revenue neutral, however we estimate the federal … Read More »


Prime Minister Stephen Harper’s Turn

Posted on September 16th, by Global Tax Weekly in Elections. No Comments

Another day, another tax cut pledge from one of Canada’s major political parties. There must be a general election round the corner! And indeed there is, on October 19, when voters go to the polls to elect members to the House of Commons. This time it was Prime Minister Stephen Harper’s turn, with the Conservative Government promising a substantial cut in Canada’s payroll tax if re-elected. This followed hot on the heels of Harper’s proposal to extend and expand the Mineral Exploration Tax Credit which is designed to encourage investment in Canada’s vital natural resources industry. In fact, the Prime Minister has been quite busy thinking up ways to tempt the electorate to voting for him again. In the past month or so, he has promised to: increase the scope of a tax break helping first-time buyers onto the property … Read More »


Canada Seems To Have All The Answers

Posted on February 9th, by Global Tax Weekly in Oil and Gas, Recession. No Comments

It has been well documented how Canada was the only one of the major industrialized countries which didn’t suffer a banking crisis. In fact, the British were so impressed at the way things were run there that they head-hunted Canada’s top central banker, Mark Carney, and put him in charge of the Bank of England. While the recession which followed the financial crisis didn’t leave Canada unblemished, and much was spent in stimulating the economy, requiring the federal Government to run a deficit, Canada still managed to cut its corporate tax to the lowest level in the G8. Now it expects to achieve a balanced budget in 2015/16, having recorded a budget surplus in November 2014. There is one worry for the Government though: oil. Canada is a major producer of oil and natural gas, and like any other nation, … Read More »





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