2019 Federal Budget Analysis

In brief

On March 19, 2019, the Federal Minister of Finance, Bill Morneau, presented the Liberal government’s final budget before the 2019 election. This Tax Insights discusses these and other tax initiatives proposed in the budget.

In detail

Business tax measures

Business Investment in Zero-Emission Vehicles

The budget proposes to provide a temporary enhanced first-year capital cost allowance (CCA) rate of 100% for eligible zero-emission vehicles purchased after March 18, 2019 that become available for use before 2028.

Two new CCA classes will be created:

• Class 54 for zero-emission vehicles otherwise included in Class 10 or 10.1 (i.e. passenger vehicles)
• Class 55 for zero-emission vehicles otherwise included in Class 16 (i.e. taxi cabs, vehicles used for short-term rentals, and heavy trucks designed for hauling freight)

In the case of class 54, the amount on which CCA can be claimed will be limited to $55,000 (plus sales taxes) per vehicle. The government will review this $55,000 limit annually to ensure that it remains appropriate.

Qualifying vehicles include vehicles that:

• are fully electric, a plug-in hybrid with a battery capacity of at least 15 kWh or fully powered by hydrogen, and
• have not been used before being acquired by the taxpayer

The budget also proposes to introduce a new federal purchase incentive of up to $5,000 for electric battery or hydrogen fuel cell vehicles under $45,000. Vehicles purchased under the federal purchase incentive will not qualify for the enhanced CCA rules.

The first-year CCA rate is phased out starting in 2024 as follows:

• March 19, 2019 – 2023: 100%
• 2024 – 2025: 75%
• 2026 – 2027: 55%
• 2028 onward: –

Scientific Research and Experimental Development Program

Under the Scientific Research and Experimental Development (SR&ED) tax incentive program, certain Canadian-controlled private corporations (CCPCs) qualify for an enhanced SR&ED tax credit at a rate of 35% available on up to $3 million of qualifying SR&ED expenditures annually. This annual expenditure limit is phased out when:

• prior year’s taxable income for the associated group is between $500,000 to $800,000, or
• taxable capital employed in Canada by the associated group is between $10 million to $50 million

The budget proposes to repeal the use of taxable income as a factor in determining a CCPC’s annual expenditure limit, to provide a more predictable phase-out of the enhanced SR&ED credit rate.

This measure will apply to taxation years that end after March 18, 2019.

Small Business Deduction – Farming and Fishing

In general, income from an active business carried on in Canada by a CCPC is eligible for a reduced rate of taxation under the small business deduction rules. As of 2019, the federal corporate income tax rate on active business income up to $500,000 was 9%.

Specified corporate income does not qualify for the small business deduction.  This includes certain amounts earned by a CCPC from sales to a private corporation in which the CCPC, or certain specified persons, hold a direct or indirect interest.  Income of a CCPC’s farming or fishing business that arises from sales to a farming or fishing cooperative corporation is excluded from specified corporate income, and, as a result is eligible for the small business deduction.

The budget proposes to expand the exclusion to include the income from sales of farming products or fishing catches of a corporation’s farming or fishing business to any arm’s length corporation.

This measure will apply to taxation years that begin after March 21, 2016.

Support for Canadian Journalism

The budget proposes to introduce three tax measures intended to support Canadian journalism:

• starting January 1, 2020, allowing journalism organizations, provided certain conditions are met, to register as a tax-exempt “qualified donee” so that gifts to these organizations can qualify for charitable donation tax credits or deductions to the donor
• starting January 1, 2019, allow a 25% refundable tax credit for qualifying salaries and wages paid to eligible newsroom employees of certain journalism organizations, subject to a cap on these labour costs of $55,000 per eligible employee, and
• provide a new non-refundable tax credit for amounts paid by an individual after 2019 and before 2025 for certain digital news subscriptions with a qualified Canadian journalism organization

The government proposes to establish an independent panel, to recommend eligibility criteria, and a new administrative body to be responsible for recognizing journalism organizations that meet these criteria and various other conditions proposed by the budget. Recognition as a qualified Canadian journalism organization under this process will be necessary for an organization to be eligible for the above measures.

Character Conversion Transactions

In 2013, the government introduced rules intended to prevent fully taxable ordinary income from being recharacterized into more favourably taxed capital gains under a “derivative forward agreement”. These character conversion transaction rules provide an exemption to facilitate certain commercial transactions where the economic return from a purchase or sale agreement is based on the economic performance of the actual property being purchased or sold, rather than an underlying reference property. To prevent potential misuse of this exemption, the budget proposes to amend the definition of derivative forward agreement to provide that the commercial transaction exemption is unavailable if it can reasonably be considered that one of the main purposes of the agreement to purchase a security in the future is for a taxpayer to convert ordinary income into capital gains.

This measure will apply to transactions entered into after March 18, 2019. It will also apply after December 2019 to transactions that were entered into before March 19, 2019, including those that extended or renewed the terms of the agreement after March 18, 2019, subject to certain transitional rules.

Canadian-Belgian Co-productions – Canadian Film or Video Production Tax Credit

Audiovisual co-production treaties and similar instruments allow productions that are the joint projects of producers from two different countries to qualify in both countries as a treaty co-production, for purposes including the Canadian film or video production tax credit. On March 12, 2018, the Government of Canada and the Belgian linguistic communities signed a memorandum of understanding. The budget proposes to add this memorandum of understanding to the list of instruments under which a film or video production may be produced in order to qualify as a treaty co-production. This measure will allow joint projects or producers from Canada and Belgium to qualify for the Canadian film or video production tax credit.

This measure will apply as of March 12, 2018.

Canada Revenue Agency Initiatives

Improving Tax Compliance

Significant investments have been made in recent years to strengthen the Canada Revenue Agency (CRA’s) ability to unravel complex tax schemes, increase collaboration with international partners, and ultimately bring any offenders to justice. The budget proposes to invest an additional $150.8 million over five years, starting in the 2019–20 fiscal year, to allow the CRA to fund new initiatives and extend existing programs, including:

• hiring additional auditors, conducting outreach and building technical expertise to target non-compliance associated with cryptocurrency transactions and the digital economy
• creating a new data quality examination team to ensure proper withholding, remitting and reporting of income earned by non-residents
• extending programs aimed at combatting offshore non-compliance

The budget also proposes to invest $65.8 million over five years to improve the CRA’s information technology systems, including replacing legacy systems, so that the infrastructure used to fight tax evasion and aggressive tax avoidance continues to evolve.

Improving Client Services at the Canada Revenue Agency

As a result of a CRA departmental review, CRA resources will be reallocated internally to improve service delivery for Canadians, including:

• improved digital services — Canadians will be notified promptly as progress is made on their file, and will be able to view this progress online
• timely resolution to taxpayers’ objections — disputes with the CRA will be resolved in a more timely manner
• additional liaison officers — more officers will be able to guide new businesses with the tax assessment process before they file their tax returns

The budget also proposes to invest an additional $50 million over five years, starting in the 2019–20 fiscal year, in two key initiatives:

• hiring additional staff to process personal income tax return adjustments more quickly, reducing frustration for taxpayers
• making permanent a pilot program that provides a dedicated telephone support line for tax service providers staffed with more experienced CRA officers

International Tax Measures

Transfer Pricing

The transfer pricing rules in the Income Tax Act (ITA) apply to cross-border transactions (or series of transactions) between persons who do not deal at arm’s length. Under these rules, when the terms and conditions of such a transaction (or series) do not reflect arm’s length terms and conditions, the CRA may adjust the quantum or nature of amounts relating to the transaction (or series) to reflect arm’s length terms and conditions, for purposes of determining the parties’ tax liabilities under the ITA.

The budget includes two proposals relating to the transfer pricing rules:

• An ordering rule is introduced, which clarifies that adjustments resulting from the transfer pricing rules must be made before applying any other provision of the ITA. This ordering could affect the determination of penalties under the transfer pricing rules. This change does not affect the existing exemption from the transfer pricing rules for certain loans and guarantees provided by Canadian-resident corporations to controlled foreign affiliates.
• Under the existing rules in the ITA, the normal reassessment period is generally extended by three years for reassessments resulting from cross-border transactions between non-arm’s length persons. For the purposes of the transfer pricing rules, a “transaction” is defined to include an arrangement or event. This broader definition of a “transaction” will now be applied to the extended reassessment period test.

The proposed changes apply to taxation years that begin after March 18, 2019.

Foreign Affiliate Dumping

The “foreign affiliate dumping” rules in the ITA generally apply where a corporation resident in Canada (a CRIC) makes an “investment” (as defined in the rules) in a foreign affiliate, and the CRIC is controlled by a non-resident corporation (or by a related group of non-resident corporations). The application of these rules can result in reductions in the paid-up capital of certain shares of the CRIC (or related Canadian corporations) and/or deemed dividends for non-resident withholding tax purposes.

The budget proposals extend the scope of the foreign affiliate dumping rules, to include situations where a CRIC is controlled by:

• a non-resident individual
• a non-resident trust, or
• a group of non-resident corporations, non-resident individuals, and/or non-resident trusts, who do not deal with each other at arm’s length

When determining related status or controlled status for the purposes of these rules, a trust will be deemed to be a corporation, the shares of which are owned by its beneficiaries.

The proposed changes apply to transactions or events occurring after March 18, 2019.

Cross-Border Securities Lending

A securities loan is an arrangement in which one person (the lender) transfers a security to another person (the borrower), who agrees to return an identical security to the lender in the future. The borrower typically provides collateral to the lender. The borrower is obligated to make payments to the lender, as compensation for dividends or interest received on the security over the term of the arrangement. The overall effect of the securities loan is that the lender retains the economic exposure to the borrowed security.

Securities loans that satisfy certain conditions are considered “securities lending arrangements” (SLAs). SLAs are subject to certain special rules in the ITA, including withholding tax rules for cross-border SLAs. Where a Canadian borrower makes a dividend compensation payment to a non-resident lender, if the SLA is “fully collateralized” (generally meaning that the lender holds collateral, consisting of cash or government debt, with a value equal to at least 95% of the value of the borrowed securities, and the borrower is entitled to all or substantially all of the income from this collateral), the payment is treated as a dividend for withholding tax purposes; otherwise, the payment is treated as interest for these purposes.

The budget proposes certain modifications to the withholding tax rules for compensation payments to address planning undertaken by certain non-residents that attempts to avoid the Canadian dividend withholding tax:

• These rules will now apply to compensation payments made under both SLAs and “specified securities lending arrangements” (specified SLAs). Specified SLAs are equity-based financial arrangements that are similar to SLAs.
• All dividend compensation payments made under SLAs and specified SLAs will be treated as dividends for withholding tax purposes, regardless of whether the arrangement is fully collateralized.
• Certain new rules apply for purposes of determining the withholding tax rate available under a tax treaty. The general effect of these rules is to make it more difficult for a lender to access the reduced withholding tax rates that are available under certain treaties where the dividend recipient owns at least 10% of the shares of the dividend payer (in terms of voting rights and fair market value).

These new rules apply to compensation payments made after March 18, 2019, except that for securities loans entered into before March 19, 2019, the measures will apply only to compensation payments made after September 2019.

The budget proposes a relieving measure for dividend compensation payments made in respect of non-Canadian shares after March 18, 2019, to ensure that such payments will be exempt from withholding tax if the related SLA is fully collateralized. The scope of an existing exemption for interest compensation payments is also expanded.

Personal Tax Measures

Employee Stock Options

The budget indicates the government’s intention to limit the use of the current employee stock option tax regime and move towards aligning the tax treatment of stock options with the United States for employees of large, long-established, mature firms. It is proposed that there will be a $200,000 annual cap on employee stock option grants (based on the fair market value of the underlying shares) that may receive the current treatment, for employees of large, long-established mature firms.  Employee stock option benefits for start-ups and rapidly growing Canadian businesses would not be subject to the proposed limit.

Additional details of this measure will be released before the summer of 2019.

Mutual Funds: Allocation to Redeemers Methodology

When a mutual fund trust unitholder redeems its units, the trust often must dispose of investments to fund the redemption, recognizing accrued gains in the trust. Although a “capital gains refund” mechanism is available under the ITA to prevent potential “double taxation” that could result, the mechanism does not always work well. Accordingly, mutual fund trusts often use the “allocation to redeemers methodology” to match the capital gains realized by the mutual fund trust on its investments with the capital gains realized by the redeeming unitholders on their units. This methodology allows a mutual fund trust to allocate capital gains realized by it to a redeeming unitholder and claim a corresponding deduction. The allocated capital gains are included in computing the redeeming unitholder’s income but its redemption proceeds are reduced by that amount.

Deferral

Certain mutual fund trusts have been using the allocation to redeemers methodology to allocate capital gains to redeeming unitholders in excess of the capital gains that would otherwise have been realized by these unitholders on the redemption of their units, resulting in a deferral benefit to remaining unitholders.

The budget proposes to introduce a new rule that would deny a mutual fund trust a deduction on the portion of an allocation made to a unitholder on a redemption of a unit of the mutual fund trust that is greater than the capital gain that would otherwise have been realized by the unitholder on the redemption, if the following conditions are met:

• the allocated amount is a capital gain, and
• the unitholder’s redemption proceeds are reduced by the allocation

This measure will apply to taxation years of mutual fund trusts that begin after March 18, 2019.

Character Conversion

Certain mutual fund trusts have also been using the allocation to redeemers methodology in a way that allows the mutual fund trust to convert the returns on an investment that would have the character of ordinary income to capital gains for their remaining unitholders. This character conversion planning is possible when the redeeming unitholders hold their units on income account but other unitholders hold their units on capital account.

The budget proposes to introduce a new rule that will deny a mutual fund trust a deduction in respect of an allocation made to a unitholder on a redemption, if:

• the allocated amount is ordinary income, and
• the unitholder’s redemption proceeds are reduced by the allocation

This measure will apply to taxation years of mutual fund trusts that begin after March 18, 2019.

Intergenerational Business Transfers

The government recognizes the importance Canadian farmers, fishers and other business owners place on being able to pass their businesses on to their children. The budget confirms that the government will, as previously noted in the 2018 budget, continue its outreach to these groups throughout 2019 to develop new proposals to better accommodate intergenerational transfers of businesses while protecting the integrity and fairness of the tax system.

Canada Training Credit

The budget introduces the Canada Training Credit (CTC), a refundable tax credit for individuals enrolled at eligible educational institutions for up to 50% of eligible tuition and fees associated with training. Starting in 2019, eligible individuals will accumulate $250 each year (to a lifetime maximum of $5,000) in a notional account, which can be used for eligible expenses beginning in 2020.

To accumulate the $250 in respect of a year, an individual must:

• file a tax return for the year
• be at least 25 years old and less than 65 years old at the end of the year
• be resident in Canada throughout the year
• have qualifying earnings of $10,000* or more in the year
• have individual net income for the year not exceeding the top of the third tax bracket for the year* ($147,667 in 2019)

*Earning and income thresholds under the CTC will be subject to annual indexation.

Eligibility of tuition and other fees, and of educational institutions, for the CTC will generally be the same as under the existing rules for the tuition tax credit, except that educational institutions outside of Canada will not qualify. The portion of the tuition fees refunded through the CTC will not qualify as eligible expenses under the tuition tax credit. Any unused balance in the notional CTC account will expire at the end of the year in which an individual turns 65.

Home Buyers’ Plan

The budget increases the Home Buyers’ Plan (HBP) withdrawal limit from $25,000 to $35,000, in respect of withdrawals made after March 19, 2019. It also extends access to the HBP to individuals, for withdrawals made after 2019, who:

• live separate and apart from their spouse or common-law partner at the time of the withdrawal, and
• began to live separate and apart in the year in which the withdrawal is made or any time in the four preceding years, and meet certain other conditions

Change in Use Rules for Multi-unit Residential Properties

For owners of multi-unit residential properties making changes in use of a portion of the property after March 18, 2019, the budget proposes to allow a taxpayer to elect that the deemed disposition that normally arises on a change in use of part of a property not apply.

Additional Types of Annuities Permitted Under Registered Plans

Funds from certain registered plans may be used to purchase an annuity to provide income in retirement, subject to specified conditions. Starting in 2020, the budget permits two additional types of annuities for certain registered plans:

Advanced life deferred annuities (ALDAs)

Subject to satisfying certain requirements, an ALDA will be a life annuity the commencement of which may be deferred until the end of the year in which the annuitant attains 85 years of age (rather than 71 years of age, which is the typical age under current rules).

The value of an ALDA will not be included for the purpose of calculating the minimum amount required to be withdrawn in a year from a registered retirement investment fund (RRIF), a pooled registered pension plan (PRPP) member’s account or a defined contribution registered pension plan (DCRPP) member’s account, after the year in which the ALDA is purchased. An individual will be subject to:

• a lifetime ALDA limit equal to 25% of a specified amount in relation to the value of property in a particular qualifying plan
• a comprehensive lifetime ALDA dollar limit of $150,000 from all qualifying plans (indexed to inflation for taxation years after 2020, rounded to the nearest $10,000)

Variable payment life annuities (VPLAs)

The budget proposes to allow PRPPs and DCRPPs to provide VPLAs to members directly from the plan. A VPLA will require at least 10 participating members and will provide payments that vary based on the investment performance of an underlying annuities fund and on the mortality experience of the participating members.

VPLAs will be required to comply with existing tax rules applicable for PRPPs and DCRPPs. The tax treatment of a VPLA on the death of an annuitant, and penalties for non-compliance with the tax rules for VPLAs, will also mirror those for PRPPs and DCRPPs.

Contributions to a Specified Multi-employer Plan for Older Members

The budget proposes to bring the specified multi-employer plan (SMEP) rules in line with the pension tax provisions that apply to other defined benefit registered pension plans (DBRPP).

In general, the pension tax rules provide that contributions to a defined benefit DBRPP in respect of a member are not made after the member can no longer accrue further pension benefits. Employers with SMEPs are not prevented from making contributions in respect of workers over age 71 or those receiving a pension from the plan, if such contributions are required by the plan. Under the budget proposals, pension benefits may no longer be accrued for a member after the end of the year in which a member attains 71 years of age or if the member has returned to work for the same or similar employer and is receiving a pension from the plan (except under a qualifying phased retirement program).

This measure will apply in respect of SMEP contributions made pursuant to collective bargaining agreements entered into after 2019, in relation to contributions made after the date the agreement is entered into.

Registered Disability Savings Plan

The budget proposes to remove the time limitation on the period that a registered disability savings plan (RDSP) may remain open after a beneficiary becomes ineligible for the disability tax credit (DTC) and to eliminate the requirement for medical certification that the beneficiary is likely to become eligible for the DTC in the future in order for the plan to remain open. 

The assistance holdback amount (the total of the Canadian Disability Savings Grants and Canada Disability Savings Bonds paid into the RDSP in the preceding 10 years less amounts repaid) will be modified depending on the beneficiary’s age.

This measure will apply after 2020*.

*An RDSP issuer will not be required to close an RDSP after March 18, 2019 and before 2021 solely because the RDSP beneficiary is no longer eligible for the DTC.

Tax Measures for Kinship Care Providers

Provincial and territorial kinship care programs (an alternative to foster care or other formal care by the state) often provide financial assistance to care providers to help defray the costs of caring for a child.

For 2009 and subsequent taxation years, the budget proposes to amend the ITA to clarify that:

• an individual who is a kinship care provider can be considered to be the parent of a child in their care and thus eligible for the Canada Workers Benefit if all other eligibility requirements are met, even if they receive financial assistance from a government under a kinship care program
• financial assistance payments received by care providers under a kinship care program are neither taxable, nor included in income for determining entitlement to income-tested benefits and credits

Donations of Cultural Property

Canada provides enhanced tax incentives to encourage donations of cultural property to certain designated institutions and public authorities in Canada. A recent court decision related to the export of cultural property interpreted the “national importance” test as requiring that a cultural property have a direct connection with Canada’s cultural heritage. This decision has raised concerns that certain donations of important works of art that are of outstanding significance but of foreign origin may not qualify for these enhanced tax incentives.

The budget proposes to amend the ITA and the Cultural Property Export and Import Act to remove the requirement that property be of “national importance” to qualify for these enhanced tax incentives for donations of cultural property. This measure will apply in respect of donations made after March 18, 2019.

Medical Expense Tax Credit

The ITA will be amended to reflect the current Cannabis Regulations, so that amounts paid for cannabis products purchased for a patient for medical purposes may be eligible for the medical expense tax credit, for expenses incurred after October 16, 2018.

Pensionable Service under an Individual Pension Plan (IPP)

An IPP is a defined benefit RPP that has fewer than four members, at least one of whom (e.g. a controlling shareholder) is related to an employer that participates in the plan.

In general, when an individual terminates membership in a defined benefit RPP, all or a portion of the commuted value of the member’s accrued benefits can be transferred on a tax deferred basis by either:

• transferring the full commuted value to another defined benefit plan sponsored by another employer, or
• subject to prescribed transfer limits (normally about 50% of the member’s commuted value), transferring to the members registered retirement savings plan (RRSP) or similar registered plan

Some taxpayers have benefited from a tax-deferred transfer of the full commuted value of the IPP by transferring it to an IPP sponsored by a newly incorporated private company controlled by the individual who has terminated employment with the former employer. This transaction allowed 100% of the assets to be transferred to the new IPP instead of the restricted transfer of assets to the individual’s RRSP.  

The budget proposes to address this planning by prohibiting IPPs from providing retirement benefits in respect of past years of employment that were pensionable service under a defined benefit plan of an employer other than the IPP’s participating employer (or its predecessor employer). Assets transferred to an IPP in respect of benefits attributable to employment with a former employer that is not a participating employer (or its predecessor) will be included in the income of the member for tax purposes.

This measure will apply to pensionable service credited under an IPP on or after March 19, 2019.

Carrying on Business in a Tax-Free Savings Account

A tax-free savings account (TFSA) is liable to pay income tax (at the top personal tax rate) on income from a business carried on by the TFSA or from non-qualified investments. The budget proposes that for 2019 and subsequent taxation years, the joint and several liability for tax owing on income from carrying on a business in a TFSA be extended to the TFSA holder; currently, only the trustee of a TFSA (i.e. a financial institution) is jointly and severally liable with the TFSA for the tax. The budget further proposes to limit the trustee’s liability to the amount of property remaining in the TFSA plus distributions made on or after the date that a notice of assessment of tax is sent to the TFSA.

Electronic Delivery of Requirement for Information

To improve efficiency and to reduce administration and compliance costs, starting January 1, 2020, the CRA will be allowed to send requirements for information electronically to banks and credit unions, but only if the bank or credit union notifies the CRA that it consents to this method of service.

Sales and Excise Tax Measures

GST/HST Health Measures

The budget proposes to extend GST/HST relief to:

• Human ova and in vitro embryos — supplies and imports of human ova made after March 19, 2019, and imports of human in vitro embryos made after March 19, 2019 will be zero-rated for GST/HST
• Foot care devices supplied on the order of a podiatrist or chiropodist — licensed podiatrists and chiropodists will be added to the list of practitioners on whose order supplies of foot care devices are zero-rated for GST/HST, for supplies made after March 19, 2019
• Multidisciplinary health care services — the supply of multidisciplinary health services will be exempt from GST/HST, when the services are rendered by a team of health professionals (e.g. doctors, physiotherapists, occupational therapists), whose services are GST/HST-exempt when supplied separately, for supplies made after March 19, 2019; the exemption will apply if all or substantially all (generally 90% or more) of the service is rendered by these health professionals acting within the scope of their profession

Cannabis Products

Currently, all cannabis products (including cannabis oils) are generally subject to an excise duty under the Excise Tax Act that is the higher of a flat rate applied on the quantity of cannabis contained in a final product and a percentage of the dutiable amount of the product as sold by the producer (ad valorem rate).

The budget proposes that effective May 1, 2019, edible cannabis, cannabis extracts (including cannabis oils) and cannabis topicals be subject to excise duties imposed on cannabis licensees at a flat rate applied on the quantity of total tetrahydrocannabinol (THC) contained in a final product. The THC-based duty will be imposed at the time of packaging of a product and become payable when it is delivered to a non-cannabis licensee (e.g. a provincial wholesaler, retailer or individual consumer).

Immigration 

Additional Resources for Improved Client Service and Helping Travellers Visit Canada

The budget proposes to allocate $121.5 million over two years to improving client service through call centre support and additional resources for more efficient and quicker processing of visa and work permit applications. 

Establishing a Permanent Global Talent Stream

In 2016, the government introduced the Global Skills Strategy initiative, which included the Global Talent Stream, a two-year pilot program designed to help companies gain greater access to high-skilled talent by streamlining and expediting the Labour Market Impact Assessment (LMIA) work permit process. The budget proposes that the Global Talent Stream, which was launched in June 2017, become a permanent program so that employers who have either been referred by a designated partner or who are seeking to hire foreign workers in occupations that fall under an ‘in-demand’ occupation list can obtain LMIAs in 2 weeks provided they:

• develop a Labour Market Benefits Plan, and 
• commit to either create jobs or increase investment in the economy through skills enhancement and training  

Previously Announced Measures

The budget confirms that the government will proceed with the following previously announced measures, as modified to take into account consultations and deliberations since their announcement or release:

• income tax measures announced in the November 21, 2018 Fall Economic Statement that: i) provide for the Accelerated Investment Incentive; ii) allow the full cost of machinery and equipment used in the manufacturing and processing of goods, and the full cost of specified clean energy equipment, to be written off immediately; iii) extend the 15% mineral exploration tax credit for an additional five years
• remaining legislative and regulatory proposals released on July 27, 2018 relating to the GST/HST
• income tax measures announced in the 2018 budget to: i) implement enhanced reporting requirements for certain trusts to provide additional information on an annual basis; and ii) facilitate the conversion of Health and Welfare Trusts to  Employee Life and Health Trusts
• measures confirmed in the 2016 budget relating to the GST/HST joint venture election
• income tax measures announced in the 2016 budget: i) expanding tax support for electric vehicle charging stations and electrical energy storage equipment; and ii) on information-reporting requirements for certain dispositions of an interest in a life insurance policy

The budget also reaffirms the government’s commitment to move forward as required with technical amendments to improve the certainty of the tax system.