Businesses

• A surprise tax break was announced for many mid-market Canadian private businesses. Canadian-controlled private
  corporations (CCPCs) benefit from a reduced rate of federal tax of 9% (vs 15%) on the first $500,000 of taxable income,
  which is subject to a full elimination where taxable capital exceeds $15 million. Going forward, the small business deduction
  will be eliminated when taxable capital exceeds $50 million, although the phase out will continue to start once taxable
  capital exceeds $10 million.
• Increased access to small business deduction by increasing the range of the taxable capital employed in Canada (TCEC)
  to be between $10 million and $50 million for the phase-out of the small business deduction. Previously, the small
  business deduction was phased out as TCEC increased from $10 million to $15 million or when ‘adjusted aggregate
  investment income’ increased between $50,000 and $150,000. The range of adjusted aggregate investment income
  remains unchanged. This measure will apply to taxation years that begin on or after April 7, 2022.

Personal measures

• Creation of the tax-free first home savings account (FHSA), allowing individuals to contribute up to $8,000 per year
  (and $40,000 over their lifetime), with the contributions being deductible to the taxpayer, income earned in the FHSA
  being tax-free, and withdrawals for the purchase of a first home being non-taxable. The first contribution is expected to
  be available in 2023.
• Expansion of the home buyer tax credit, providing up to $1,500 in tax relief to eligible first-time home buyers on
  acquisitions made on or after January 1, 2022.
• Introduction of the multigenerational home renovation tax credit and home accessibility tax credit, taking effect in
  2023, to provide a refundable credit of 15% of up to $50,000 of eligible expenses for the purposes of a renovation that
  creates a second dwelling unit for an eligible person to occupy with a parent, child, grandchild, brother, sister, uncle,
  aunt, niece or nephew of the eligible person. Eligible persons include individuals who are 65 or older at the end of the
  year that includes the renovation period as well as adults with disabilities who are eligible for the disability tax credit.
• Increase to the home accessibility tax credit, raising the annual expense limit to $20,000, effectively increasing the
  maximum credit to $3,000. This will apply to expenses incurred in 2022 and subsequent years.
• Introduction of a residential property flipping rule, taking effect for residential properties sold after 2022, which would
  deem residential property that was disposed of within 12 months of acquisition to be business income. Thus, the
  property would not be eligible for capital gain rates or other exemptions such as the principal residence exemption,
  unless certain “life event” exceptions arose such as death, illness, employment changes, or a number of other events.

To view the entire budget, just click on the following address: https://budget.gc.ca/2022/home-accueil-en.html