The 2023 Federal Budget has been released, and it contains significant changes that will impact individuals and businesses across Canada. As always, it’s important to understand the implications of these changes and how they may affect your financial planning.
One of the key changes in the 2023 Federal Budget is the introduction of a new luxury tax on high-end vehicles, boats, and aircraft. This tax will apply to vehicles with a purchase price of over $100,000, boats with a purchase price of over $250,000, and aircraft with a purchase price of over $10 million. The tax will be calculated at a rate of 10% of the amount above these thresholds. This new tax is expected to raise approximately $605 million in revenue over the next five years.
Another significant change in the budget is the increase in the Basic Personal Amount (BPA) for federal income tax purposes. The BPA is the amount of income that an individual can earn before they have to pay federal income tax. For the 2023 tax year, the BPA will increase to $13,990, up from $12,960 in 2022. This means that individuals will be able to earn more income before they have to start paying federal income tax.
The budget also contains several changes that will affect businesses. One of these changes is the introduction of a new tax credit for businesses that hire apprentices. This tax credit will provide up to $5,000 per apprentice per year, and will be available to businesses that hire apprentices in designated Red Seal trades. The goal of this tax credit is to encourage businesses to hire and train apprentices, which will help to address the skilled labour shortage in many industries.
Another change that will impact businesses is the extension of the Canada Emergency Wage Subsidy (CEWS) until June 30, 2023. The CEWS provides eligible employers with a subsidy to help cover the wages of their employees. The subsidy rate varies depending on the revenue decline of the business, with a maximum subsidy rate of 75% for businesses that have experienced a revenue decline of 70% or more.
Overall, the 2023 Federal Budget contains several changes that will impact individuals and businesses across Canada. It’s important to understand these changes and how they may affect your financial planning. If you have any questions or concerns, be sure to consult with a qualified financial professional who can provide guidance on how to navigate these changes and optimize your financial plan.
