PwC Edmonton talks to clients about the Federal Budget

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Federal Budget breakfast highlights the “no room to manoeuvre” budget

Moments after Canada’s Minister of Finance, Jim Flaherty, announced the federal budget on March 21, 2013, the Edmonton Tax partners were hard at work understanding the impact the budget would have on the Edmonton market. Their insights were shared at an interactive breakfast the morning of March 22 with participants from over 20 Edmonton based organizations in the private and public sectors. Kent Davison, Edmonton’s Tax lead, hosted the panel along with Tax partners David Yee and James Merkosky.

PwC customized the content of the session, breaking down aspects of the budget with the implications it would have on the attendees’ organizations. Davison says the presentation-with-breakfast format provides PwC’s Edmonton clients the opportunity to get a more in-depth look at “the particular aspects of the budget that are most relevant to them.”

Furthermore, clients still appreciate the personal touch that makes PwC a distinctive firm known for hosting high value events like these. “Our clients enjoy the experience they take with them after attending a breakfast where they can engage in interactive discussions on the potential implications this budget holds for the Edmonton market,” Davison affirms, noting he expects the tradition will continue for years to come.

A “no room to manoeuvre” budget
Davison opened the session this morning by highlighting the fact that the budget has a big focus on deficit reduction, which allows little flexibility. The presentation centred on “tid-bits for business”, breaking down the content of the budget into relevant and understandable terms.

One such “tid-bit” discussed was the accelerated capital cost allowance (CCA) for manufacturing or processing machinery and equipment. The temporary enhanced annual CCA has been extended for two more years, applicable to property acquired before 2016. This provides a 50% straight line CCA rate for purchases of machinery and equipment used in manufacturing and processing in Canada of goods for sale or lease. The half-year rule applies to the new measure.

There are also significant changes to certain life insurance products often utilized by business owners as part of their estate or business succession planning. New rules eliminate tax benefits related to leverage insured annuities, applicable to tax years ending on or after March 21, 2013, subject to grandfathering for plans entered into before budget day. The benefits relating to so-called “10/8” arrangements will also be denied for taxation years after March 21. However, the budget will alleviate tax consequences of a withdrawal from a 10/8 arrangement if the withdrawal is made on after March 21, 2013 and before January 1, 2014.

Even with all of the changes and impacts to business, Davison states, “there are always changes that come with the budget and at PwC, we understand that it’s our job to be the experts on these changes, know the implications, and apply these insights to help our clients interpret, apply and navigate through them.”

A copy of this morning’s presentation can be downloaded here.

For more information on PwC’s analysis of the Federal Budget, please visit www.pwc.com/ca/budget. You will also find our PwC budget submission, 2012 Tax Timeline (a look back), our PwC Budget Tweets (and expanded commentary), and the PwC Federal Budget Memo.