“A Made-In-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future”
On March 28, 2023, Finance Minister Chrystia Freeland released the Liberal Government’s federal budget. Budget 2023 is focused on measures to help make life more affordable for Canadians, spending on improved health-care services, investments in green energy and rollout of the next stage of the federal dental care program.
1. Expansion of Alternative Minimum Tax (AMT) rules impacting high-income individuals
- Increasing the AMT rate from 15% to 20.5%
- Raising the AMT exemption amount from $40,000 to approximately $173,000
- Including more income and limiting more deductions and credits in computing AMT
2. Updates to intergenerational business transfer tax rules enacted under Bill C-208
- Conditions imposed to restrict rules to genuine business transfers
- Two transfer options available — Immediate Business Transfer and Gradual Business Transfer
3. Various affordability measures
- Increasing limits for withdrawals under Registered Education Savings Plans
- Easing ability to open Registered Disability Savings Plans for certain individuals
- New Grocery Rebate for low-income individuals
- New Canadian Dental Care Plan for uninsured families
- Proposed guidelines for mortgage relief
4. Various business measures
- New tax on share buybacks by Canadian public entities
- Introducing Employee Ownership Trusts
- New investment tax credits to promote a clean economy
Budget 2023 does not propose changes to personal income tax rates and brackets, the capital gains inclusion rate of 50%; or corporate income tax rates.
However, for business owners and high-income individuals, significant changes are proposed to Intergenerational Business Transfers and the Alternative Minimum Tax.