Legislative Costing Notes - 2022-23

• A Tax on Share Buybacks
  Feb 2, 2023 • LEG-2223-024-S
  The 2022 Fall Economic Statement announced the government’s intention to introduce a corporate-level 2 per cent tax on the net value of all types of share buybacks by public corporations in Canada, effective January 1, 2024. The details of this new tax are expected to be announced in Budget 2023. PBO interprets “all types of share buybacks by public corporations in Canada” to mean all net share buybacks by publicly traded corporations that would pay corporate income tax in Canada. The PBO estimates the proposed 2% tax on share buybacks will raise $3.0 billion over the first 5 fiscal years of its application.
• Cost Estimate for the Multigenerational Home Renovation Tax Credit
  Jan 11, 2023 • LEG-2223-023-S
  The proposed measure introduces a refundable tax credit for eligible expenses incurred during a qualifying renovation that leads to the creation of a secondary unit within an existing home. Undertaking a qualifying renovation must result in an eligible person (a senior or a person with a disability) residing with a qualifying relation. The amount of the tax credit would be 15 per cent of the lesser of eligible expenses and $50,000. The PBO estimates that the proposed measure will generate a 5-year cost of $44 million.
• Deduction of Travel Expenses for Tradespersons
  Dec 1, 2022 • LEG-2223-019-S
  Bill C-241, an Act to amend the Income Tax Act (deduction of travel expenses for tradespersons), proposed an amendment to provide tax recognition for travel and temporary relocation expenses to eligible tradespersons and apprentices. Under this amendment, the distance between the job site and the person’s ordinary place of residence is as least 120km rather than the 150km in the existing deduction. Additionally, the amendment does not have a limit on the amount of eligible travel and temporary relocation expenses that can be claimed. This measure will apply to the 2022 tax year and any subsequent taxation years and this report considers the incremental cost associated with the proposed measure when compared with the existing measure.
• Residential Property Flipping Rule
  Nov 28, 2022 • LEG-2223-020-S
  Bill C-32 introduced the Residential Property Flipping Rule, which will be applied to residential properties sold on or after January 1, 2023. Under this new rule, the gains from reselling a residential property within 12 months of purchase will be fully taxable as ordinary income, as opposed to being exempted under the Principal Residence Exemption (for primary residences) or taxed as capital gains (for secondary residences) without this rule. The rule will not apply if the disposition results in a loss or if it is already considered as ordinary income. Exemptions to this rule will include circumstances such as deaths, household additions, separations (marriage or common-law), threats to personal safety, serious illness or disability, relocation due to employment, involuntary job termination, insolvency, or destruction/expropriation of the property. The PBO estimates that the new Residential Property Flipping Rule introduced in Budget 2022 is expected to raise $66 million in revenue over the next five fiscal years.
• Doubling of First Time Homebuyers' Tax Credit
  Nov 28, 2022 • LEG-2223-021-S
  This bill proposes doubling the First Time Homebuyer’s Tax Credit, increasing the non-refundable tax credit amount from $5,000 to $10,000. This measure will apply to homes purchased on or after January 1st, 2022. The PBO estimates that the doubling of First Time Homebuyers' Tax Credit will reduce federal income tax revenues by approximately $115 million in 2022-23 for a total of 585 million over the next 5 years.
• Eliminating Interest on Federal Student and Apprentice Loans
  Nov 28, 2022 • LEG-2223-022-S
  Eliminating interest accruing on all current and future Canada Student Loans and Canada Apprentice Loans in repayment starting April 1, 2023. This will not affect interest previously accrued. The PBO estimates eliminating interest accruing on Canada Student Loans and Canada Apprentice Loans will generate a 5-year total cost of $2.7 billion.
• Taxation of Vaping Products
  Nov 3, 2022 • LEG-2223-018-S
  Budget 2022 introduced a new excise duty on vaping products that went into effect on October 1, 2022. The new excise duty rate is of $1.00 per 2 millilitres (mL), or fraction thereof, for containers with less than 10 mL of vaping liquid. For containers containing more than 10 mL, the rate is $5.00 for the first 10 mL and $1.00 for every additional 10 mL, or fraction thereof. The PBO estimates that the introduction of the excise duty on vaping products will raise $2.4 billion over 5 years.
• Canada Dental Benefit
  Oct 20, 2022 • LEG-2223-017-M
  The proposed Canada Dental Benefit (CDB) would provide up-front tax-free payments to cover dental expenses for children under 12-years-old. The PBO estimates the cost of Bill C-31 (Dental Benefit) to be $703 million.
• Cost estimate of the one-time top-up to the Canada Housing Benefit program
  Oct 14, 2022 • LEG-2223-016-M
  Part 2 of Bill C-31 will enact the Rental Housing Benefit Act. The Act proposes the creation of a one-time $500 benefit for low-income Canadian renters. If adopted, individuals who paid at least 30 per cent of their income on rent in 2022 with incomes below $20,000, or $35,000 for families, will be eligible to apply for a one-time, tax-free $500 Rental Housing Benefit. Only one eligible cohabiting spouse or common-law partner may receive the benefit. Rent paid to relatives is not eligible. This measure will increase federal spending by $940 million in 2022-23, with an estimated 1.7 million recipients. The PBO estimates the $500 housing benefit proposed in Budget 2022 would cost approximately $940 million.
• Temporary enhancement to the Goods and Services Tax/Harmonized Sales Tax credit
  Sep 29, 2022 • LEG-2223-015-M
  This bill proposes doubling the goods and services tax (GST) credit for six months to support those most affected by inflation. The PBO estimates the cost of Bill C-30 to be $2.6 billion.
• Additional Tax on Banks and Life Insurers
  Sep 22, 2022 • LEG-2223-013-S
  Budget 2022 introduced an increase of the corporate income tax rate of 1.5 percentage points on the taxable income of banking and life insurance groups above $100 million. This will increase the overall federal corporate income tax rate above this threshold from 15.0 per cent to 16.5 per cent for all taxation years that end after Budget Day 2022. For a taxation year that includes Budget Day, the additional tax is prorated based on the number of days in the taxation year after Budget Day. The PBO estimates the total revenue from the Additional Tax on Banks and Life Insurers to be $2.3 billion.
• Canada Recovery Dividend
  Sep 22, 2022 • LEG-2223-014-S
  The Canada Recovery Dividend is a one-time tax on banking and life insurance groups. The amount payable is calculated as 15% of the average Canadian-based taxable income over 2020 and 2021 minus a 1 billion deduction. It will be imposed for the 2022 taxation year and will be paid in equal installments over five years. It is to be noted that this definition follows what is laid out in the draft legislation and differs from what was published in Budget 2022. The initially proposed tax base for this measure was the 2021 Canadian-based taxable income instead of the two-year average. The PBO estimates the total revenue from the corporate surtax of financial institutions to be $3.0 billion.
• An Act to amend the Employment Insurance Act and the Employment Insurance Regulations (Prince Edward Island)
  Sep 7, 2022 • LEG-2223-012-S
  The Employment Insurance (EI) program divides the province of Prince Edward Island into two economic regions: the Census Agglomeration (CA) of Charlottetown, and the region of PEI excluding the CA of Charlottetown. Bill S-236 proposes the elimination of economic regions in PEI for the EI program. If adopted, a single unemployment rate will be used to assess the claims of PEI residents, instead of the two distinct unemployment rates currently used for each of the economic regions. The PBO estimates this measure will generate around $76.6 million in savings for the Federal government between 2021-22 and 2025-26. The measure will affect both regular and fishing benefits for the residents of Prince Edward Island.
• Estimate for the entirety of Bill C-221: An act to amend certain Acts in relation to survivor pension benefits
  Aug 30, 2022 • LEG-2223-011-M
  This analysis provides the estimated gross expenditure for the entirety of Bill C-221, including the aspects pertaining to veterans. Currently, in certain situations, the spouse of a deceased pensioner is not eligible for a survivor pension. This occurs if the pensioner and the spouse married or began cohabiting in a conjugal relationship after the pensioner retired (in the case of the federal Public Service, Federally Appointed Judges, members of the House of Commons and Senators) or retired and was at least 60 years old (in the case of veterans and the RCMP). Under Bill C-221, all of these spouses would become eligible for survivor pensions. The PBO estimates the expenditure from the Bill with an effective date of January 1, 2023. The PBO estimates Bill C-221 will result in a gross expenditure from pension plans of $68 million in 2022-23 for a total expenditure of $1.3 billion over the next 5 years.
• Increasing access to the small business tax rate
  Jul 6, 2022 • LEG-2223-010-S
  Canadian Controlled Private Corporations (CCPCs) can benefit from a tax rate of 9 per cent on up to $500,000 of active business income compared to the general corporate tax rate of 15 per cent. Access to this preferential rate begins to be phased out when a CCPC’s taxable capital employed in Canada exceeds $10 million and is fully phased out when taxable capital reaches $15 million. Budget 2022 proposes to phase out access to the small business tax rate more gradually, with access to be fully phased out when taxable capital employed in Canada reaches $50 million, rather than at $15 million.
• Cost estimate for the Veterans portion of Bill C-221: An act to amend certain Acts in relation to survivor pension benefits
  Jun 21, 2022 • LEG-2223-009-M
  This enactment amends certain Acts to allow the survivor of an eligible person to receive pension benefits after the death of the person even if the person and the survivor married or began cohabiting in a conjugal relationship after the person attained the age of 60 years or retired. The PBO estimates the cost of the Veterans portion of this Bill with an effective date of January 1, 2023. The PBO estimates the Veterans portion of Bill C-221 will cost $15 million in 2022-23 for a total of $276 million over the next 5 years.
• Cost of a Dental Care Plan for Canadians
  Jun 16, 2022 • LEG-2223-008-S
  Implementing a dental care plan for Canadians. The plan is expected to cover the costs of routine care, fluoride treatments, radiographs, sealants and other combinations of caries treatments, dentures, and periodontics. Households with an income below $90,000 may benefit from the plan. A phase-in period lasting from 2022 to 2025 will gradually expand coverage to those eligible. Households with an income below $70,000 per year will bear no cost. Co-payments scale linearly for households with income between $70,000 and $90,000. The thresholds are indexed to inflation. The PBO estimates that this program will cost $9,036 million over a 5 fiscal year period and benefit 1,425 thousand people over 2022-2023, increasing to 5,894 thousand by 2026-2027.
• Increasing Loan Forgiveness for Doctors and Nurses in Rural and Remote Communities
  Jun 7, 2022 • LEG-2223-007-S
  Increasing the maximum amount of forgivable Canada Student Loans by 50 per cent, from $40,000 to $60,000 for doctors and from $20,000 to $30,000 for nurses working in underserved rural or remote communities. This policy will be effective April 1, 2023. The PBO estimates the proposed increase to the forgivable amount of Canada Student Loans for doctors and nurses who practice in rural and remote communities will generate a 5-year total cost of $19 million.
• Luxury goods sales tax (update)
  May 26, 2022 • LEG-2223-006-M
  The PBO estimates that introduction of a luxury goods sales tax will generate $163 million of revenue in 2023-2024.
• This enactment amends the Excise Tax Act in exempting psychotherapy services from the goods and services tax
  May 20, 2022 • LEG-2223-005-S
  The PBO estimates that the implementation of Bill C-218 will reduce GST revenues by approximately $3 million in 2022-23 for a total of $76 million over the next 5 years. This cost estimate represents the reduction in GST revenues if all goods and services provided under North American Industry Classification System (NAICS) code 621330 (Offices of mental health practitioners (except physicians)) were to become GST exempt. The PBO assumes this Bill will be effective January 1, 2023.
• Mobility tax deduction for tradespersons and indentured apprentices
  May 5, 2022 • LEG-2223-003-S
  Bill C-19, the Budget Implement Act, proposed to introduce a Labour Mobility Deduction which would provide tax recognition of up to $4,000 per year in eligible travel and temporary relocation expenses to eligible tradespersons and apprentices. The PBO estimates that it will cost $103 million in 2022-2023 to allow tradespersons and indentured apprentices to deduct costs from travelling when employed in a construction activity at a job site that is located at least 150 kilometers from their ordinary place of residence.
• Tax-Free First Home Savings Accounts
  May 5, 2022 • LEG-2223-004-S
  The PBO estimates that First Home Savings Accounts will reduce Personal Income Tax revenue by approximately $0.8 billion each year of operation.
• Tuition grant for persons with a Disability Tax Credit certificate
  Apr 5, 2022 • LEG-2223-001-S
  Private member’s bill C-255 proposes amending the *Income Tax Act* and the *Canada Student Financial Assistance Act* so that students enrolled in a designated post-secondary educational institution with a Disability Tax Credit (DTC) certificate will receive a grant equal to their annual tuition fees. It is assumed that the bill will be effective August 1, 2022, the start of the 2022-23 loan year. The PBO estimates the proposed tuition grant for persons with a Disability Tax Credit certificate will generate a 5-year total cost of $402 million. This includes a gross cost of $591 million and a cost recovery of $189 million.
• Mobility tax deduction for tradespersons and indentured apprentices
  Apr 5, 2022 • LEG-2223-002-S
  Bill C-222 proposes to allow tradespersons and indentured apprentices to deduct, for income tax purposes, the costs associated with travelling when employed in a construction activity at a job site that is located at least 80 kilometers away from their ordinary place of residence. This act is to apply to the 2022 tax year and any subsequent taxation years. The PBO estimates that it will cost $117 million in 2022-2023 to allow tradespersons and indentured apprentices to deduct costs from travelling when employed in a construction activity at a job site that is located at least 80 kilometers from their ordinary place of residence.