Federal budget 2023 highlights

Measures for individuals

• Alternative minimum tax (AMT) rules expanded to apply to more high-income earners.
• Qualifying family members measure for RDSPs will be extended by three years to 2026, and expanded to include siblings 18 and older.
• The maximum educational assistance payment (EAP) withdrawal for the first 13 weeks of enrollment increased to $8,000 (full-time students) and $4,000 (part-time students).
• A new grocery rebate will be available by increasing the maximum Good and Service Tax Credit (GSTC).
• Employee ownership trusts (EOT) will be available to facilitate business succession between business owners and employees starting January 2024.
• Retirement compensation arrangements will not be subject to 50% refundable tax on fees or premiums paid for securing or renewing a letter of credit.
• Deduction for tradespeople’s tools doubled from $500 to $1,000, effective 2023.

Measures for corporations

• Bill C-208 refined with additional safeguards for genuine intergenerational business transfer from parents to children.
• Several tax credits and other incentives introduced for businesses producing and manufacturing clean energy.
• Public corporations subject to a new 2% tax on equity issuance and repurchases.
• Proposal of several amendments to GAAR (General Anti-avoidance Rule).

Other notable measures

• Inflation adjustment on the excise tax for beer, spirits and wine temporarily capped at 2% for this year.
• Canada Student Grants (CSG) will increase by 40%.
• Government to lower credit card fees for small business.

Read our bulletin for insights into how the federal budget may affect your clients.

This document may contain forward-looking information which reflect our or third party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of March 28, 2023. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

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