The new Liberal government's first budget (Budget 2016) has been the subject of anticipation and speculation, much of it apprehensive. Unusually, Budget 2016 is noteworthy for what it does not contain. Budget 2016 does not introduce changes to increase the tax rate on employee stock option benefits, which formed part of the Liberal government's election platform as discussed in our earlier notes on this topic ( Finance Minister Provides Guidance on Stock Option Grandfathering, Nov. 20, 2015, and Will Tax Treatment for Canadian Stock Options Change? Oct. 29, 2015). Budget 2016 also does not contain any proposal to increase taxes on capital gains realized on the disposition of property, which had been the subject of some speculation.
The following, which are summarized in our full article, are the principal tax changes announced in Budget 2016 of interest to the business community:
- Repeal of eligible capital property regime
- Small business deduction and other changes to small business rules
- Life insurance proceeds and transfer of policies
- Emissions trading regimes
- Matters affecting financial instruments
- Treaty shopping and implementation of OECD anti-BEPS proposals
- Extension of the back-to-back rules
- Cross-border surplus stripping
- Other previously announced measures
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