It's Your Money  

Economic statement update

Last week, the federal government presented their long-anticipated Fall Economic Statement 2020.

While many of these proposals are not yet enacted into law, we can assume that most will go ahead, so I wanted to provide a summary of the key measures that may affect you. 

Support for families with young children

The government has proposed to provide four additional payments to families entitled to the Canada Child Benefit (CCB).

These payments proposed for 2021 would be paid in the following quarterly amounts based on income thresholds under the normal CCB rules:

  • $300 per child under the age of six to families with net income under $120,000
  • $150 per child under the age of six to families with net income above $120,000

Home office expense deductions

Currently, there are several criteria that must be met to claim a tax deduction for employment-related expenses including an employer completed copy of CRA form T2200.

Due to the recent shift in work arrangements for many, the CRA will allow employees working from home in 2020 to claim up to $400 in employment related expenses without the need to track detailed expenses and without the need for a signed form T2200.

Elimination of interest on student loans

The government intends to eliminate the interest owing on the repayment of the federal portion of the Canada Student Loans and Canada Apprentice Loans for 2021-2022.

Increase to the Canada Emergency Wage Subsidy

Currently, the maximum base subsidy for periods eight through 10-40%. The update announced that CEWS base rates for periods 11-13 would maintain the same base rate but increase the maximum top-up subsidy to 35% from the current 25%.

Canada Emergency Business Account Expanded

Originally a partially forgivable loan up to $40,000, the government has proposed expanding this by an additional $20,000 and the deadline for applying has been extended to March 31. 

Introduction of the Highly Affected Sectors Credit Program

This new program will offer 100% government-guaranteed financing for deeply impacted businesses, at rates which will be lower than under the Business Credit Availability Program and market rates.

In addition, several targeted funding programs will be created to help the tourism, hospitality, live events, arts, air travel and innovation sectors.

Limits being added to stock options

Expanding on proposals announced in the 2019 Federal Budget, the government is proposing that a $200,000 annual limit apply on employee stock option grants that can qualify for the employee stock option deduction that provides preferential tax treatment.

Certain companies with gross revenues under $500 million will be exempt.  

Other tax measures proposed

in addition to the major announcements outlined above, there was several other proposals including:

  • Applying the GST/HST on cross-border digital products and services, goods supplied by non-resident vendors through fulfilment warehouses and platform-based, short-term accommodation.
  • Implementing a tax on corporations providing digital services in Canada effective Jan.1, 2022.
  • Creation of a national, tax-based measure over the coming year that will be applied when a residential property is owned by an individual who is not a citizen or permanent resident of Canada.


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About the Author

Brett, designated as a chartered investment manager and certified financial planner, is the regional director (Okanagan) for IG Wealth Management.

In addition to his “day job," Brett was appointed to the board of directors of FP Canada (formerly FPSC) in 2014, named as the board’s vice-chair in 2017 and took over as board chairman in 2019. 

Brett has been writing a weekly financial planning column since 2012 and provides his readers with easy to understand explanations of the complex financial challenges that they face in every stage of life.

Enhancing the financial literacy of Canadian consumers is a top priority of Brett’s and his ongoing efforts as a finance writer and on the regulatory side through the FP Canada board focus on this initiative.   

Please let Brett know if you have any topics that you’d like him to cover in future columns by emailing him at [email protected]

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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