Canada launches consultations on proposed Luxury Tax

Taxes help pay for the government programs and services that Canadians depend on. They provide a social safety net on which all Canadians can rely in times of crisis.

The impact of the COVID recession has been very uneven. Some Canadians have lost their jobs or small businesses, while some sectors of the economy have flourished. That’s why it is fair today to ask those Canadians who can afford to buy luxury goods to contribute a little bit more. To that end, the recent budget followed through on the government’s commitment to introduce a tax on select luxury goods.

This proposed Luxury Tax would apply on the sale of new luxury cars and aircraft with a retail sale price over $100,000, and new boats over $250,000. The tax would be calculated at the lesser of 20 per cent of the value above these thresholds ($100,000 for cars and aircraft, $250,000 for boats) or 10 per cent of the full value of the luxury car, boat or aircraft. The tax is proposed to come into force on January 1, 2022.

Today, through the Department of Finance, the Government of Canada is launching consultations with stakeholders on the design of the proposed Luxury Tax.

Full details on the government’s proposed approach can be found in the related background paper. Stakeholders are invited to provide their views on the government’s proposed approach by September 30, 2021. Details on how to participate can be found in the consultation notice, which is linked below.

Source: CRA

The Tax-Free Savings Account

Saving just got a whole lot easier!

The Tax-Free Savings Account (TFSA) program began in 2009. It is a way for individuals who are 18 and older and who have a valid social insurance number to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.  Administrative or other fees in relation to TFSA and any interest or money borrowed to contribute to a TFSA are not tax deductible. 

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Source: CRA

$10 a day child care for families in Saskatchewan

Every child deserves the best possible start in life and all parents should have the ability to build both a family and career. Yet, too many families across Canada lack access to affordable, inclusive, and high-quality child care. The global COVID-19 pandemic has also made it clear that without access to child care, too many parents—especially women—cannot fully participate in the workforce.

In the recent federal budget, the Government of Canada laid out a transformative plan to build a Canada-wide, community-based system of high-quality early learning and child care that provides parents in Canada with, on average, $10 a day regulated child care spaces for children under the age of six. This will make life more affordable for families, create new jobs, get parents back into the workforce, and grow the middle class, while giving every child an equal start in life. 

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, the Honourable Ahmed Hussen, Minister of Families, Children and Social Development, and the Honourable Dustin Duncan, Saskatchewan Minister of Education, announced an agreement that will support an average of $10 a day early learning and child care for Saskatchewan families by the end of 2025-26. By the end of 2022, Saskatchewan families will see a 50 per cent reduction in average parent fees for children under age six in regulated child care.

In addition to significantly reducing the cost of child care, federal funding of close to $1.1 billion over the next five years will lead to the creation of 28,000 new regulated early learning and child care spaces to help ensure Saskatchewan families with children under six years old can access child care spaces that meet their needs. Federal funding will support the expansion of these new child care spaces in not-for-profit child care centres, small child care facilities, and home-based child care.

The agreement will also fund critical services and attract, retain and grow a strong and skilled workforce of early childhood educators, including through the creation of a wage grid that will ensure early child educators are well paid for their work. The agreement also supports future early childhood educators with their studies and provides them with professional development opportunities.

The agreement includes a clear commitment to continue to work collaboratively with Saskatchewan First Nations and Métis Nation communities to ensure Indigenous children have access to affordable, high-quality and culturally appropriate early learning and child care. 

It also supports an early learning and child care system that is fully inclusive of children with disabilities and children needing enhanced or individual supports, and ensures all families have equitable access to high-quality, affordable early learning and child care.

Along with today’s landmark agreement, the governments of Canada and Saskatchewan have also reached an agreement to extend the Canada-Saskatchewan Early Learning and Child Care Agreement. The Government of Canada will provide over $68.5 million over the next four years to increase access to affordable, inclusive and high-quality child care spaces. In addition, the Government of Canada will provide Saskatchewan with a one-time investment of over $17 million in 2021-2022 to support the early childhood workforce.

The Government of Canada will continue to work with provinces, territories, and Indigenous partners across the country to make life more affordable for families, grow the middle class, create jobs, help parents—especially mothers—return to the workforce, and give each and every child the same head start.

Source: canada.ca