Following the recent announcement of a Federal Election on April 28, the Federal political party leaders have begun to outline their election platforms, including tax policy. We have briefly summarized the tax policy announcements of the three main Federal political parties so far, to provide you with an overview of some of the possible tax changes that we may see in the coming months.
Both the Conservatives and Liberals have announced their intention to:
Eliminate the proposed increase to the Capital Gains Inclusion Rate;
Reduce the GST on new housing (with slight differences in the application and amounts); and
Reduce the tax rate in the lowest marginal tax bracket – Liberals by 1% and Conservatives by 2.25%.
The NDP has outlined relief to low and middle class Canadians, including proposals to:
Raise the basic personal amount to $19,500 (for all but those in the top two tax brackets);
Permanently remove the GST from certain essential items;
Double the new Canada Disability Benefit; as well as
Raise the Guaranteed Income Supplement (GIS).
The Conservatives have announced the most tax proposals to date, which also includes promises to:
Increase the amount of income that seniors can receive tax-free by approximately $10,000 to $34,000 (through increases the basic personal and age credits);
Delay the mandatory RRSP conversion age from 71 to 73;
Provide an additional $5,000 of TFSA contribution room (beyond the current $7,000), if the additional funds are invested in Canadian securities;
Introduce a deferral on the capital gains tax when the sales proceeds are reinvested in Canadian businesses; and
Undertake tax reform to simplify our tax system.
Please reach out to your BMO Private Wealth professional if you have any questions.