This builds upon prior CRA funding increases (C$2.2-billion in additional funding since 2016), and the government expects to recover an additional C$3.4-billion in federal revenues from this latest funding increase – almost C$3 of revenue for each additional C$1 of CRA funding. While technically legal, this is a troubling approach from the perspective of consistency, predictability and fairness, which are among the principles that are meant to inform our income tax system.īudget 2022 also announces a staggering C$1.2-billion in additional funding over five years for the Canada Revenue Agency (CRA) to expand its audits of larger entities and non-residents engaged in aggressive tax planning, increase the investigation and prosecution of criminal tax evasion and expand the CRA’s educational outreach. These include the proposals relating to taxation of Canadian-controlled private corporations (CCPCs), the new Canada Recovery Dividend, and the proposed application of the General Anti-Avoidance Rule (GAAR) to the creation (as opposed to use) of tax attributes.
An executive summary of these changes follows, with further details below.Ī less than welcome element of Budget 2022 is the prevalence of proposed tax changes with retroactive effect to transactions occurring before Budget Day. While taxpayers may be relieved that Budget 2022 does not include an increase to the capital gains inclusion rate or restrictions on the principal residence exemption, Budget 2022 does include a number of significant changes applicable to financial institutions, private companies, and businesses more generally. On Ap(Budget Day), the Minister of Finance introduced Canada’s 2022 Federal Budget (Budget 2022).