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Below you will find some of the notable highlights from the 2019 Federal Budget released on March 19, 2019. For more details on any of the proposals listed below, please refer to the full release of the federal budget by following the link at the end.

  • First-Time Home Buyer Incentive: CMHC will assist first-time buyers by offering a shared equity position up to 10% in a newly constructed home or 5% of an existing home. Families with a household income of more than $120,000 annually won’t qualify, and there will be a cap on the value of homes that are eligible. More details will be forthcoming on this.
  • Home Buyers Plan: Increasing the eligible amount for to $35,000 that can be withdrawn from RRSPs towards a qualifying first- time home buyers’ transaction. Additional enhancements will be made to extend access to the program for individuals who experience or marriage or common-law relationship breakdowns.
  • Canada Training Benefit: The Canada Training Benefit of $250/year up to a lifetime limit of $5000 which could be used to refund up to half the costs of taking a course or enrolling in a training program. Also, a new EI Training leave of up to four weeks of income support to take time away from work for training opportunities.
  • Federal Pharmacare. To make prescription drugs more affordable for Canadians, the government will create the new Canada Drug Agency that would work with the provinces to develop a plan to coordinate prescription drug purchases. They will also seek to make high-cost drugs for rare diseases more accessible.
  • Improvements in Retirement Security: Among several initiatives that have already been implemented such as CPP enhancements and changing OAS back to age 65; the budget proposes changing the annual income threshold to receive the Guaranteed Income Supplement (GIS) from $3,500 to potentially $15,000. There are two new types of annuities being introduced, which focus on addressing longevity risk and providing flexibility in receiving registered plan income. An additional automatic enrolment will be implemented for those who are eligible for CPP benefits after age 70 and have not applied for them yet, to ensure Canadians do not miss out on the benefits available to them.
  • Employee Stock Options: New tax legislation would create a $200,000 cap on employee stock grants that qualify for preferential tax treatment in the past from large, established employers (likely those publicly listed). This would result in taxation similar to what has been in place in the United States.
  • Small Business Deduction (Farmers/Fishers): Brief mention on a proposal to extend relief to multiply small business deduction limit to those who sell farming or fishing products to any arm’s length corporation.
  • Intergenerational Business Transfers: Vague commentary on their continued efforts to develop new proposals to better accommodate intergenerational transfers of businesses while protecting the integrity and fairness of the tax system.
  • Improvements to the RDSP: Change the requirement for an RDSP to be closed and grants be repaid should the beneficiary no longer qualify for the Disability Tax Credit (DTC). Add RDSPs to the list of creditor protected assets in the event of bankruptcy.
  • Zero-Emission Vehicles: Buyers of a zero-emissions vehicle under $45,000 will receive up to $5,000 in federal incentives. The government will also support the building of new recharging and refueling stations. They set a goal to 100% of zero-emission vehicles by the year 2040.
  • Helping Students: Lowering the borrowing costs for Canada Student Loans and Canada Apprentice Loans by several percentage points. Extend the grace period to 6 months after leaving school, in which the loan will not accumulate any interest costs.
  • Affordable Rental Financing: An additional $10 Billion in funding over nine years to increase the availability of affordable rental options for Canadians.
  • Digital Subscriptions: A new temporary non-refundable 15% tax credit for eligible digital news subscriptions to claim up to $500/year. This will be available from the year 2020 – 2024.
  • Individual Pension Plans: Closing of loopholes to prevent individuals from bypassing the prescribed limits when transferring the commuted values of their defined benefit pension plans.

Disclaimer: The above commentary was provided for information purposes and is not intended to provide legal or tax advice.