Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
2009 Federal BudgetFriday, January 30, 2009 > 10:53:18
January 27, 2009 - There was a Notice of Ways and Means Motion to Amend the Customs Tariff, and Excise Tax Act relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST). This Notice is available in ANNEX 5 of the budget plan at: http://www.budget.gc.ca/2009/plan/bpa5b-eng.html (following the Income Tax Act notice of ways and means motion). (following the Income Tax Act notice of ways and means motion).
There are some other measures that may interest members:
Border Infrastructure Investment
The government is providing up to $14.5 million for two bridges at two of the busiest U.S–Canada border crossings: the Blue Water Bridge in Sarnia and the Peace Bridge in Fort Erie.
It is also providing funding to modernize and expand border service facilities at Prescott, Ontario; and at Huntingdon, Kingsgate, and the Pacific Highway in British Columbia.
Access to Financing
To improve access to financing, the government:
Enhances the flexibility and capacities of financial Crown Corporations by increasing the authorized capital limits of EDC and BDC by $1.5 billion each, and increasing their associated borrowing limits as necessary.
Increases the maximum eligible loan amount a small business can access under the Canada Small Business Financing Program from $250,000 to $350,000 and to $500,000.
Allocates up to $12 billion to a new Canadian Secured Credit Facility to purchase term asset-backed securities backed by loans and leases on vehicles and equipment. This new facility will help consumers and businesses access financing for these products.
Small Business Tax Changes
The budget increases the amount of active business income earned by a small business that is taxed at the low federal corporate tax rate of 11% (instead of the general federal corporate rate of 19%) to $500,000 (up from $400,000), as of January 1, 2009.
Canadian controlled private corporations (CCPC) with taxable income above $400,000 but below $500,000 will have an additional month in which to pay any balance of tax owing. CCPCs with taxable income below $500,000 for 2009 and later tax years may be eligible for quarterly (rather than monthly) tax instalments.
Accelerated Capital Cost Allowance
The budget proposes a temporary 100-percent CCA rate for eligible computers and software (described in CCA Class 50) acquired after January 27, 2009 and before February 2011. In this time frame, businesses can fully deduct the cost of eligible computers and the system’s software in the first year that CCA deductions are available.
The computer tax shelter property rules, which prevent investors from using CCA deductions to shelter other income, will also apply to computer equipment eligible for the 100-percent CCA rate.
Tariff reductions for Machinery and Equipment
The budget proposes to permanently eliminate tariffs on a range of machinery and equipment. The reductions are effective for goods imported into Canada on or after January 28, 2009, and apply to 214 tariff items currently listed in the Schedule to the Customs Tariff.
Budget 2009 will also take steps to facilitate the movement of goods by improving the Customs Tariff rules respecting the treatment of temporarily imported cargo containers, and undertake consultations with respect to further liberalizing the use of these containers in Canada.
The government is extending requirements to electronically (e-file) file income tax information as follows:
Corporations with annual gross revenues over $1 million for a taxation year that ends after 2009 will be required to e-file their income tax returns. (The CRA may grant exceptions for certain companies such as non-resident corporations and insurance corporations and functional currency filers).
The number of any type of a tax information return that must be e-filed is reduced to 50 (from 500) for returns required to be filed after 2009. Affected returns include T4 information returns and slips for employment income.
To encourage compliance with these e-file requirements, the budget also introduces a penalty for filing a corporate income tax return in an incorrect format and reduces penalties for late-filed or incorrectly filed information returns as follows:
For corporate income tax returns filed in an incorrect format, the penalty will not apply for returns required to be filed before 2011. The penalty will be phased in for returns required to be filed for taxation years ending in 2011 and later years.
Recognizing that current penalties can be excessive where a high number of similar returns are late-filed (e.g., T4 slips), penalties will be reduced for information returns filed in an incorrect format and for late-filed information returns, for returns required to be filed after 2009.
Further details of the 2009 Budget Plan are available at: http://www.budget.gc.ca/2009/plan/bptoc-eng.html..