11 Mar 2024 Federal Budget Announcement Set For April 16

The federal government has officially announced that the budget will be tabled on Tuesday, April 16, 2024, by Deputy Prime Minister and Minister of Finance Chrystia Freeland. This budget announcement will reveal the government’s fiscal priorities for the upcoming year.

The 2023 Fall Economic Statement prioritized housing affordability and addressing economic challenges in Canada. Expected features of the 2024 budget include extending incentives for investments by small and medium-sized businesses, potentially by delaying the phase-out of current investment incentive measures from 2024 to 2027. This would aim to encourage more capital asset investments.

There may also be additional relief for small businesses through changes to the small business deduction (SBD), including increasing the threshold for this deduction and reducing the federal small business tax rate to aid in overcoming inflationary pressures and the economic aftermath of the pandemic.

The budget is expected to propose modifications to the Scientific Research and Experimental Development (SR&ED) program, aiming to modernize and simplify access, particularly for small businesses, by aligning tax credit criteria more closely with the Income Tax Act and reducing bureaucratic barriers.

In terms of housing, the government plans to continue efforts to accelerate the construction of affordable housing by introducing measures to cut red tape and reduce construction barriers, complementing previously announced initiatives to improve housing affordability.

Tax reform is supposedly on the agenda, with discussions around launching a comprehensive review of the tax system to address its perceived outdatedness and complexity, ensuring fairness and efficiency.

Regarding the carbon tax, additional relief measures may be introduced to mitigate affordability issues, including adjusting the Climate Action Incentive payments.

Changes to the Alternative Minimum Tax (AMT) rules might be considered to prevent negative impacts on charitable donations, indicating a potential revision of recently proposed changes.

The regulation of crypto assets is anticipated, aligning with international efforts to ensure transparency and protect investors by integrating the OECD’s crypto-asset reporting framework into Canadian law.

One piece of information that we do now know, as it was announced on March 9, is that the alcohol excise duties will be capped to 2% to mitigate the impact of inflation, responding to industry calls for financial relief in a challenging economic climate.

Overall, this year’s budget should aim to bolster the economy, support small businesses, and enhance affordability through targeted tax relief and incentives, while also considering the regulatory landscape for emerging financial assets and addressing climate change impacts.

Clearline will provide a summary of the tax changes outlined in the budget, likely late in the afternoon of April 16th.