Federal Budget 2012 – Tax Analysis and Budget Documents


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By FMC’s Tax team in cooperation with CCH

On March 29, Canada’s Finance Minister Jim Flaherty tabled the 2012 federal budget, which was met with, as expected, detractors and supporters of the announced spending and tax measures. The Department of Finance’s focus was, obviously, on reducing spending for the foreseeable future, and the only surprise was that the spending reductions were not as extensive as many had anticipated.

Fraser Milner Casgrain LLP (FMC) worked in collaboration with CCH to produce editorial commentary on the content and potential effects of the 2012 federal budget for clients and those in the business and legal community. Some of the significant topics relating to corporate and business tax changes include:

  • Expanding eligibility of clean energy equipment for capital cost allowance
  • Reducing or eliminating some existing tax credits (such as the tax credit for mineral exploration and overseas employment)
  • Changing the rates and qualifying expenditures for the SR&ED program
  • Denying paragraph 88(1)(d) “bumps” for partnership interests
  • Amending thin capitalization, transfer pricing and foreign affiliate rules
  • Allowing split- and late-designations for eligible dividends
  • Enhancing transparency and accountability for charities, and including gifts to foreign charitable organizations
  • Changing the provisions regarding group sickness/accident insurance plans, retirement compensation arrangements and employee profit sharing plans

For further information or to read FMC and CCH’s commentary, download the complete analysis from FMC’s website.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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