2023 Federal Budget Highlights

On March 28, 2023, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget. The budget:

In brief 

  • introduces a refundable investment tax credit for certain clean hydrogen equipment
  • expands the refundable investment tax credit for clean technology equipment to include certain geothermal energy systems
  • announces a public consultation on a refundable investment tax credit for certain clean electricity systems and equipment
  • announces proposed labour requirements that would apply to the clean hydrogen, clean technology and clean electricity investment tax credits
  • introduces a refundable investment tax credit for certain clean technology manufacturing and processing equipment
  • expands the eligible activities and extends the phase out period for the reduced tax rates that apply to zero‑emission technology manufacturing and processing income
  • provides design and implementation details for the 2% tax on the net value of share repurchases by public corporations that was announced in the 2022 Fall Economic Statement
  • announces a consultation on specific proposals to strengthen the general anti-avoidance rule (GAAR)
  • amends the alternative minimum tax (AMT) to better target the AMT to high-income individuals
  • amends the rules introduced by Bill C-208 that facilitate certain intergenerational business transfers, to ensure that they apply only when a genuine intergenerational business transfer occurs
  • introduces rules to define and facilitate the use of Employee Ownership Trusts to acquire and hold shares of a business

This Article discusses these and other tax initiatives proposed in the budget.

In detail:

Business Tax Measures

  • Investment Tax Credit for Clean Hydrogen
  • Clean Technology Investment Tax Credit – Geothermal Energy
  • Investment Tax Credit for Clean Technology Manufacturing
  • Investment Tax Credit for Clean Electricity
  • Investment Tax Credit for Carbon Capture, Utilization, and Storage
  • Labour requirements related to certain investment tax credits
  • Zero-emission technology manufacturers
  • Flow-through shares and Critical Mineral Exploration Tax Credit – Lithium from brines
  • Scientific research and experimental development (SR&ED)
  • Tax on equity repurchases
  • General anti-avoidance rule
  • Dividend received deduction by financial institutions
  • Tax treatment of credit unions

Personal Tax Measures

  • Alternative minimum tax (AMT) for high-income individuals
  • Intergenerational business transfers
  • Employee Ownership Trusts
  • The Grocery Rebate
  • Deduction for tradespeople’s tool expenses
  • Registered Education Savings Plans (RESP)
  • Retirement Compensation Arrangements (RCA)
  • Registered Disability Savings Plans (RDSP)

International Tax Measures

  • International Tax Reform

Sales Tax Measures

  • GST/HST treatment of payment card clearing services

Other Tax Measures

  • Alcohol excise duty
  • Cannabis Taxation
  • Tariff support for developing countries