31 Oct 2013

Amid the kerfuffle of the Duffy-Wallin-Brazeau Senate scandal, Jim Flaherty announced this week the federal government is ahead of schedule in eliminating the national debt.

The federal finance minister tabled documents Tuesday showingOttawa’s deficit for the 2012-13 fiscal year was $18.9 billion, not the $25.9 billion he projected in the March budget.

“It will be less next year,” Flaherty said. “We have another 18 months to go until the budget in 2015 … but Canadians can be assured their federal government is on track fiscally and we will balance the budget in 2015.”

Flaherty also introduced legislation that will spur job creation, close tax loopholes and further crack down on tax evasion.

The Economic Action Plan 2013 Act, No. 2 is a followup to the spring budget, implementing key measures to help create jobs, stimulate economic growth and secure Canada’s long-term prosperity.

Small business in the spotlight

The second part of the EAP includes some news that’s already been announced. Flaherty revealed in September a three-year freeze on Employment Insurance rates.

That move is expected to reduce overall payments next year by $660 million.

The legislation also offers:

  • Extension and expansion of the Hiring Credit for Small Business, benefiting about 560,000 employers across Canada
  • Increase and index of the Lifetime Capital Gains Exemption, making investing in small business more rewarding
  • Expansion of the accelerated capital cost allowance to further encourage investments in clean energy generation

The legislation introduces administrative monetary penalties and criminal offences designed to deter the use, possession, sale and development of electronic “suppression of sales” software that falsifies records for the purpose of tax evasion.

In an effort to close tax loopholes, the act includes efforts that relate to character conversion transactions, synthetic dispositions and leveraged life-insurance arrangements. The intent is to make everyone pay his “fair share” of tax.

Flaherty noted Canada is not immune to the economic challenges experienced by other members of the G-7. The legislation is, then, a government effort to create jobs and grow the Canadian economy.

“In the face of continued global economic uncertainty, it is essential that we remain squarely focused on keeping Canada’s economy strong,” said Flaherty. “That’s why our Government will continue to support the drivers of economic growth and job creation, while keeping taxes low and returning to a balanced budget by 2015.”

Here to help

A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.

Fill out our contact form or give us a call at 403-226-8297.