Finance Minister Jim Flaherty tabled a revised federal budget on June 6, 2011 (Budget 2011). Budget 2011 is Minister Flaherty’s first Budget backed by a Harper majority government and the first federal Budget of a majority Conservative government in nearly twenty years.
As expected, Budget 2011 largely reintroduces the same measures that were proposed by the former minority Conservative government in its March 22, 2011 budget. These measures include:
- the elimination of the tax deferral on income earned through a partnership by a corporation;
- an extension of the dividend stop-loss rules to restrict losses arising on the redemption or repurchase of stock held by certain corporations; and
- the elimination of certain favourable treatment of costs related to oil sands projects.
Budget 2011 also reintroduces a variety of tax credits and allowances aimed at providing tax breaks for families, measures to eliminate income splitting arising from capital gains, and measures to expand certain anti-avoidance provisions in relation to the RRSP and RRIF regimes and the charitable sector. Coming into force provisions generally continue to be as of the previous March 22, 2011 announcement date.
Budget 2011 also indicates funds have been set aside for a potential agreement with Québec regarding harmonization of the Québec sales tax with the GST.
The foregoing measures are summarized in the McCarthy Tétrault Tax Group commentary prepared on March 22, 2011.