The federal government has introduced several changes to taxation and tax benefits for this year — and experts tell CBC News the tax changes related to housing are the ones to watch.
The FHSA allows certain homebuyers to save up to $40,000 toward a home purchase, with a maximum annual contribution of $8,000 over five years. Contributions to the FHSA are tax-deductible and withdrawals to purchase a home are tax-free.
Hugh Woolley, a Vancouver-based chartered professional accountant, said it’s important to note that the FHSA isn’t just for first-time homebuyers. Those looking to buy a home who haven’t owned one for four years or more are also eligible.
“So this can also be for people who are re-entering the housing market, who’ve been out of the housing market for a number of years,” Woolley said.
Another new tax benefit related to housing is the Multigenerational Home Renovation Tax Credit.
The refundable tax credit will provide up to $7,500 “in support for constructing a secondary suite for a senior or an adult with a disability to live with family members,” Finance Canada said in an email.
Eligible families can claim 15 per cent of a maximum $50,000 in home renovation and construction costs to build a secondary housing suite.
New taxes on home-flipping, vacant housing
The government brought in a new rule in Budget 2022 which has effectively increased taxes on home-flipping.
The change means the government will assume anyone who sells a home after possessing it for less than 12 months will be considered to be flipping the property. Profits from the sale would be considered business income, not a capital gain.
Dan Rogozynski, co-director of the University of Waterloo’s masters of accounting program, said the government hopes the measures will help slow rising housing prices in Canada.
“They don’t like this flipping, because what happens is it creates demand, it inflates prices,” Rogozynski said.
But the change comes with a number of exceptions, such as selling a home because of a death or divorce.
Woolley said home-flippers will likely look for ways to get around paying the tax.
“I think there’s going to be a lot of people who do sell within a year [and] are still going to be able to come up with some reason as to why these rules don’t apply to them,” he said.
The government is also introducing an Underused Housing Tax (UHT).
“The UHT is a national, annual one per cent tax on the value of vacant and underused residential property in Canada owned directly or indirectly by non-resident, non-Canadians,” Finance Canada said in an email.
Any non-resident or non-Canadian who owns an underused or vacant residential property in Canada as of December 31, 2022 will have to file a UHT return for the property by April 30, 2023.
There are a number of exceptions to the UHT. They include exceptions for seasonal properties and properties made inaccessible by a hazard.
New taxes on home-flipping and vacant property are meant to increase the number of available housing units. (Richard Buchan/The Canadian Press)
Woolley said the range of exemptions to the UHT is notable.
“I think that one of the dangers in these rules is the more exemptions you provide, the more the tax planners and the clever, crafty people are going to say, ‘Well, this is the way you get around these rules,'” Woolley said.
Rogozynski said it’s likely the tax will increase in the next few years.
“I can’t see why over time that rate wouldn’t go up from 1 per cent, to 2 per cent, to 3 per cent, because they’re nameless, faceless foreigners. They don’t vote,” he said.
Other changes
The federal government indexes personal income tax brackets and many tax benefits to inflation. They’ll increase by 6.3 per cent this year, says the Canada Revenue Agency.
Rogozynski said it’s a far higher jump than usual.
“This is triple what you would normally see across the last 40 years,” he said.
“So pretty well everybody who is in Canada working now probably has never seen such an indexation factor going on.”
The Basic Personal Amount, the amount of income exempt from tax, has increased to $15,000 this year, up from 14,398 in 2022.
Rogozynski said that, overall, tax changes this year are modest.
“There may be a recession [in 2023]. That’s not the time to introduce a bunch of big new increases,” he said.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
