Flaherty Tables Canada Budget Measures

by Mike Godfrey, Tax-News.com, Washington

29 March 2007

Jim Flaherty, Minister of Finance, has tabled a Notice of Ways and Means Motion in the House of Commons to implement certain tax relief measures proposed last week in Budget 2007 and in the months before the budget.

"Canadians pay too much tax," explained Minister Flaherty, continuing: "Budget 2007 builds on the significant tax relief in our first budget to help Canadian families and businesses get ahead and stay ahead. We are reducing taxes by more than $40 billion over this and the next two fiscal years and we will continue to look at new ways to ease the tax burden of hard-working Canadians."

Included in the measures are a 0.5% reduction in the general corporate income tax rate, effective January 1, 2011, and the introduction of a tax on distributions from certain publicly-traded income trusts and limited partnerships, generally effective beginning in 2011 for previously existing trusts and partnerships, and in 2007 for new trusts and partnerships.

Other measures include a $2,000 child tax credit that will provide up to $310 per child of tax relief, an increase in the age credit amount by $1,000 to $5,066, the introduction of pension income splitting, and the doubling of the value of goods that may be imported duty- and tax-free by returning Canadian residents after a 48-hour absence from Canada to $400.

In addition, the budget establishes a federal Foreign Convention and Tour Incentive Program to attract foreign conventions and tour groups, through a goods and services tax/harmonized sales tax rebate.

The budget also expands the list of qualified investments that can be held by RRSPs and other registered plans to include most investment-grade debt and publicly-listed securities.

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