2021 Federal Election: A comparison of each parties’ tax proposals

A quick guide on the tax proposals presented by each party.

The liberal's Tax plan

With a focus on COVID relief and implementing measures to help Canadians achieve home ownership and to combat tax avoidance by targeting high income earners, large companies as well as certain non-resident investors.


Summary of Key Proposed Changes

Individuals

• Introduce a minimum effective tax rate of 15% for individuals with taxable income above the threshold for the top bracket ($222,661 for 2022).

• Double the First-Time Home Buyers Tax Credit from $5,000 to $10,000.

• Require owners to hold property for at least 12 months. To avoid flipping strategist.

• Propose a new EI benefit for self-employed Canadians and establish an EI Career insurance benefit.

• Provide $10 per day childcare across Canada.


Business

• Corporate surtax of 3% on all bank and insurance company earnings in excess of $1 billion.

• Extend the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) past October 2021 for various business that qualify

• Provide small businesses with a tax credit of 25% for eligible ventilation improvement expenses and develop an investment tax credit of up to 30% for clean technologies.

• Provide healthcare professionals with a one-time tax incentive to establish a practice.


The Conservatives' Tax Plan

The Conservative Party, led by Erin O’Toole, released its platform focusing on Canada’s recovery plan, specifically providing various credits to individuals and businesses with the intention of jumpstarting the economy.


Summary of Key Proposed Changes

Individuals

• Introduce a 25% non-refundable personal income tax credit on amounts of up to $100,000 that Canadians personally invest in Canadian-controlled private corporations that have net assets of $40 million or less between Jan. 1, 2021 through Dec. 31, 2023.

• Introduce an enhanced EI that temporarily provides 75% of salary instead of 55% when a province experiences a 0.5% provincial increase in unemployment and additionally extend EI sickness benefit to 52 weeks from the current 15, EI contribution rates would be increased to support this.

• Double the Canada Workers Benefit, Disability Supplement and in addition to expanding the Northern Zone to include Intermediate Zones, double the Northern Residents Deduction.


Business

• Increase employee ownership of Canadian companies by establishing Employee Ownership Trusts and exempt Canadian-controlled start-ups headquartered with at least two-thirds of their employees in Canada from the current plan to tax stock options.

• Provide companies with a 5% refundable tax credit, up to a maximum of $25,000, for any new capital investment made in 2022 and 2023 and introduce a tax credit to accelerate Carbon Capture, Utilization and Storage as well as a tax incentive program for the development of technologies in the salmon industry

• Provide loans to businesses, equivalent to four months of pre-pandemic revenue up to $200,000 on similar terms as the CEBA. Repaying the loan prior to Dec. 31, 2022 will result in a forgiven amount of up to 25%.

• Introduce a ‘welcome to CRA’ program for new small businesses and allow businesses with less than $60,000 in revenues to use cash accounting


The NDP's Tax Plan

The NDP party, led by Jagmeet Singh, spoke of it’s focus on, specifically providing various credits to individuals, and taxing large corporations and those they consider to be the top percentile of wealth.


Summary of Key Proposed Changes

Individuals

• Increase the top marginal federal tax rate by two points to 35% for those individuals earning over $210,000 and impose an annual 1% tax on net wealth owned by ‘Canadian resident economic families’ on Dec. 31 of each year. Families with net wealth below a threshold of $10 million are exempt from the tax, as is wealth acquired through lottery winnings.

• Increase the capital gains inclusion rate to 75% from 50%.

• Introduce universal $10 per day childcare.

• Double the Home Buyer’s Tax Credit to $10,000.

• Create a low-income supplement to ensure an individual on EI will receive a minimum of $2,000 a month and introduce or expand various benefits helping individuals who are collecting EI, or are on sick leave or parental leave.


Business

• Increase the federal corporate tax rate from 15% to 18%, while maintaining the small business tax rate at its current level of 9%.

• Continue to provide wage and rent subsidies to small businesses until they are able to fully re-open and introduce a long-term hiring bonus to pay the employer portion of EI and CPP for new or rehired staff.



Green Party of Canada

The Green Party of Canada, led by Annamie Paul, supports a green future.


Summary of Key Proposed Changes

Individuals

• Apply a 1% tax on net (family) wealth above $20 million.


Business

• Increase the federal corporate tax rate from 15% to 21% but maintain the small business tax rate at no more than 9% and charge a 5% surtax on commercial bank profits from which credit unions and co-ops will be exempt.

• Extend wage and rent subsidies until COVID-19 pandemic-related restrictions are fully removed.


OpenGate does not have an opinion on which platform is best, as different parties cater for different sects of our country. The important thing is to get out there and vote for the party that best represents you.