Budget 2011 calls for sustained low-tax environment and growth friendly policy: PwC

View this page in: Français

TORONTO, March 22, 2011—Today, Federal Minister of Finance Jim Flaherty presented the 2011 Federal Budget. The budget did not change corporate or personal tax rates, instead emphasizing “sustainable actions for long term prosperity” including investments in job creation, support for families and communities, innovation, education and training and a return to balanced budgets without raising taxes.

Notable actions include:

• Providing a one-time Hiring Credit for Small Business of up to $1,000
• $80 million in new funding to help small and medium sized businesses accelerate technology adoption through the Industrial Research Assistance Program
• Support for seniors by providing top up benefits on the Guaranteed Income Supplement of over $300 million per year
• Close to $100 million of renewed funding for research and development of clean energy and more than $870 million for Canada’s Clean Air Agenda over two years
• An overhaul of the Customs Tariff legislation to reduce the processing burden for Canadian business
• Public infrastructure support through a permanent annual investment of $2 billion in the Gas Tax Fund
• Support for key industries with targeted actions in agriculture, forestry, mining, manufacturing and processing. “Manufacturer’s were granted their wish today, accelerated write-offs were extended for manufacturing and processing machinery and equipment for two more years,” says Dean Walton, Tax partner, PwC.
• Extension of the temporary 15-per-cent Mineral Exploration Tax Credit for an additional year (until March 31, 2012) to continue to help companies raise capital for mineral exploration.

Further closing of tax loopholes, corporations to lose opportunity to defer income through partnerships

The 2011 Budget also followed through on the Government’s commitment in 2010 to improve the integrity and fairness of the tax system by closing loopholes that allow a few businesses and individuals to avoid paying their fair share of tax. These proposed measures will protect the Government’s revenue base—which helps keep tax rates low—and reaffirm the Government’s ongoing commitment to tax fairness. Of note is that deferrals of partnership income will be limited by requiring corporations that have a significant interest in a partnership with a fiscal period ending on a date different from the corporation’s year-end, to report partnership income on an accrual basis.

New consumer protection, housing finance and mortgage insurance rules to maintain strong financial system

The Federal Government today introduced legislation to reinforce the stability of Canadian housing finance and strengthen the mortgage insurance regime. It also plans to move forward on the recommendations of the Task Force on Financial Literacy to appoint a Financial Literacy Leader to promote national efforts. Other measures include a new consumer protection initiative which will ban unsolicited credit card cheques and develop new rules related to network-branded prepaid cards.

For more information and to read the highlights of the federal budget outlined in PwC’s Tax Flash Memo, please visit http://www.pwc.com/ca/budget. In a few hours, PwC will issue a more detailed Tax Memo that discusses the budget.

• Press Room
• News Release Archive
• Media Contacts
• PwC Global Press Room
• PwC Global Press Contacts