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:
Further closing of tax loopholes, corporations to lose opportunity to defer income through partnershipsThe 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.
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