2017 FEDERAL BUDGET

March 23, 2017

HIGHLIGHTS

On March 22, 2017, Finance Minister Bill Morneau delivered the Liberal government’s 2017 Federal Budget. The budget estimates a deficit of $23 billion for 2016 – 2017 and a deficit of $28.5 billion for 2017 – 2018. Canada’s national debt will increase by $143 billion over the next five years and is expected to be approximately $759 billion at the end of 2021 – 2022.The theme of this year’s budget is “wait and see” as the Liberal government seems to have been hesitant in tabling any significant tax changes. This may relate to President Donald Trump’s promise of a Republican tax reform plan, which is expected to lower both personal and corporate taxes in the United States.

The 2017 Canadian Federal Budget does not increase personal or corporate tax rates in Canada nor does it increase the capital gains inclusion rate despite much speculation.

In 2016, the Liberal government expressed commitment to reviewing certain tax expenditures and inefficient tax measures that were, in their view, aimed towards wealthy Canadians rather than middle class families. Over the past year, we have seen the Liberal government follow through with many changes aimed at simplifying the tax system and making it fairer to the Canadian middle class.

Budget 2017 continues with the trend of taxpayer monitoring and review as displayed through the increased spending on Canada Revenue Agency’s staffing and audit activity targeting aggressive tax planning.

The following summary discusses the Budget 2017 tax changes in detail. [Budget]

Legal

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