Today Finance Minister Jim Flaherty presented a budget that can best be
described as low-key, as the Conservative government opted to stay the
course towards a balanced budget in 2015 during the lead-up to a federal
election. With many of the budget's key deliverables leaked in advance,
no surprises were revealed and what was tabled followed Grant Thornton's
assertion that the government would focus on "closing loopholes" instead
of conferring significant tax breaks or committing to new spending.
"Today's budget is in line with our expectations", said Keith MacIntyre,
National Leader, Tax, Grant Thornton LLP in Canada. "The government is
banking on employment to spur economic growth, there are no new taxes on
families and businesses, and balancing the 2014 budget will largely rely
on freezing departmental budgets. This is a bit of a non-budget in terms
of impacts on Canadian businesses and business owners."
More forceful measures to support the competitiveness of Canada and
Canadian businesses will likely be announced next year as the
Conservatives gear up for an election and seek to shore up voter support.
"The most significant personal tax measure in the federal budget is the
eventual elimination of the graduated rate taxation of trusts and
estates," commented Paul Coleman, National Leader, Succession and Estate
Planning, Grant Thornton LLP. "The government announced that it plans to
proceed with most of the measures introduced in the June 3, 2013
consultation paper - this is a major change in the taxation of
testamentary trusts and estates and it will have a significant impact on
current and future tax planning using trusts."
Grant Thornton has released a detailed summary of the tax measures that
were announced in this budget:
The budget proposes to:
International tax measures
There are some noteworthy spending announcements to create long-term
economic advantages for Canada. The budget revealed that the government
will provide an additional $500 million over the next two years to top
up Canada's Automotive Investment Fund, as well as $1.5 billion over the
next decade for the new Canada First Research Excellence Fund to help
post-secondary institutions excel globally in research areas. Also
included was $40 million for the Canadian Accelerator and Incubator
Program to assist entrepreneurs to create new companies.
"Overall, the government's 2014 budget is more interesting for what's
not included," said Mr. MacIntyre. "We think the bigger story is what's
on the horizon - specifically base erosion and profit shifting (BEPS)
and treaty shopping. At Grant Thornton we believe that these issues will
receive more attention as the year goes on. A key question that will be
asked is - are companies paying their fair share?"
Note to editors
Grant Thornton released a post-budget summary on February 11. More
detailed commentary will follow in the days ahead, including a free
budget webinar at 12 pm ET on February 12.
About the Grant Thornton tax practice
Whether it's domestic, cross border or international tax issues, or
understanding changes to the domestic and international legislation and
regulatory environment, Grant Thornton LLP tax experts have experience
working with clients across all sectors. And with offices located from
coast-to-coast and as a member firm of Grant Thornton International Ltd,
our team can help you almost anywhere you're located.
About Grant Thornton in Canada
Grant Thornton LLP is a leading Canadian accounting and advisory firm
providing audit, tax and advisory services to private and public
organizations. We help dynamic organizations unlock their potential for
growth by providing meaningful, actionable advice through a broad range
of services. Together with the Quebec firm Raymond Chabot Grant Thornton
LLP, Grant Thornton in Canada has approximately 4,000 people in offices
across Canada. Grant Thornton LLP is a Canadian member of Grant Thornton
International Ltd, whose member and correspondent firms operate in over
100 countries worldwide.
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