Budget 2024 was released late afternoon on April 16, 2024 and proposed a slightly worse bottom line throughout the federal government’s fiscal plan compared to previous estimates. To achieve this, the government introduced several new taxes after numerous spending announcements over the last few weeks. A series of new tax measures including increases to the capital gains inclusion rate and a new global minimum tax are set to boost revenues (7%). We are still currently digesting the budget in its entirety so the true impact that these new taxes could have on the Canadian economy over the medium and longer term are still unknown.

Interesting Budget Numbers & Measures:

• Budget shortfall to remain virtually unchanged at $39.8 billion in fiscal 2024-25—just below the $40.1 billion deficit maximum.
• Budget 2024 increases the inclusion rate on capital gains realized annually above $250,000 from 50% to 67% for individuals and on all capital gains realized by corporations and trusts effective June 25, 2024.
• The lifetime capital gains exemption for small businesses has been increased from $1.0 million to $1.25 million
• First-time homebuyers can withdraw double the amount from their RRSPs to put toward a down payment on a house or condo, raising the limit from $35,000 to $60,000, and giving five years (up from two) to start paying back. Renters can also build credit scores through rental payments.
• $4 billion over five years to increase housing supply including $1.5 billion for a new Housing Infrastructure Fund and $1 billion to expedite the construction of new purpose-built apartments.
• $4.9 billion over five years for a new Canada Disability Benefit including payments for eligible Canadians (starting July 2025) and amendments to eligible expenses for Disability Support Deductions.
• $8.1 billion in new defence spending over five years. This would bring Canada’s defence spending up to 1.76% of GDP by fiscal 2029-30, a big step closer to meeting the NATO target of 2%.

 

Our office will continue to digest these budget changes and proactively reach out with any new information as it becomes available.

 

Enjoy the rest of the week.