On Tuesday April 16, 2024, Finance Minister Chrystia Freeland tabled the Liberal government’s 2024-25 Federal Budget in Parliament, entitled “Fairness For Every Generation”.
Budget 2024 expands on the many announcements made in recent weeks, with leading themes of housing affordability, cost of living, employment opportunities, and small business growth – all with particular emphasis on younger generations. With all the announced spending, the big question remaining for Budget Day has been how it would be paid for. The answer, at least in part, is an increase in the inclusion rate for capital gains realized by trusts, corporations, and high-income individuals.
This summary highlights provisions relevant to savings, investment and financial planning of individuals, families, and small businesses. We begin with a summary of current tax rates, then turn to the Budget’s themes:
Federal income tax brackets & rates
• Individual bracket indexing 2023 to 2024
• Corporations
Personal tax changes
• Capital gains inclusion rate
• Alternative Minimum Tax (AMT)
Working life and small business
• Lifetime Capital Gains Exemption (LCGE)
• Canadian Entrepreneurs’ Incentive (CEI)
• Canada Carbon Rebate for Small Businesses
• Deduction for tradespeople’s travel expenses
• Employee Ownership Trust tax exemption
• Mutual fund corporations
Family and community
• Canada Learning Bond accessibility
• Canada Child Benefit and Child Disability Benefit – for Grieving Families
• Disability Supports Deduction
• Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit
Housing affordability
• 30-Year Amortizations for First-Time Buyers Purchasing New Builds
• Home buyers’ plan
• Canada Secondary Suite Loan Program
• More Skilled Trades Workers Building Homes
• Halal Mortgages
Cost of living
• Canada pension plan
• Enhancing Free and Affordable Bank Accounts
• Capping Non-Sufficient Funds Fees at $10
• No-fee switching to cheaper telecom plans
• Automatic tax filing for low-income Canadians
Investing
• Mineral Exploration Tax Credit
• Qualified investments for registered plans
Tax administration
• Charities and qualified donees
Note that a Budget is a statement of the governing party’s intention. Until passed into law, its content is to be considered as proposals, particularly where the ruling party has a minority of the seats, as is the case presently.
Federal income tax brackets & rates
Individual bracket indexing 2023 to 2024
There were no changes to personal income tax rates, other than normal annual indexing. Personal brackets have been indexed by 4.7% over 2023 levels. For 2024, the basic personal amount/credit is $15,705, incrementally reduced as income exceeds the 29% fourth bracket to $14,156 once income reaches the 33% bracket threshold.