The first Canadian budget in two years is to hit the parliament on Monday.
PM Justin Trudeau and his Liberal Party will present the new Canadian budget on Monday. The budget, which won’t include a wealth tax, supposedly proposes a sales tax for e-commerce warehouses and online platforms. Moreover, there will also be a digital services tax for internet giants and a luxury tax.
While there were talks from the government to put forward a wealth tax, Liberals chose to scrap this plan. “The government is not moving forward with a wealth tax right now”, a source told Reuters. “We will be taking meaningful steps to close loopholes and tackle tax evasion, and ask those who are doing well right now to pay just a little bit more.”
Even though the government appeared strong this year, they will still need support from at least one opposition group to pass the budget. The inclusion of a luxury tax on new cars and private aircraft valued above $100,000 was central in the debate. This luxury tax would come into force next year. Meanwhile, the sales tax will start in July, and the Web companies tax from January 2022.
But that’s not all. Given the new booming data for the housing market, the government is to propose a tax on vacant residential properties, if the owner is a non-resident. This housing tax would also start from January 1, 2022. The budget will also propose to limit multinationals arrangements to safeguard Canadian taxation. And while small businesses will be exempt, the Canadian government is also looking to limit excessive interest expenses deducted from profit.
Previously, the government also announced a $100 billion stimulus package over three years to jump-start economic recovery. From this, the government is setting aside $12 billion in the budget to extend pandemic support measures. We will continue to cover Canadian budget news in the upcoming week.