Fiscal update confirms feds’ plans to proceed with various tax and estate proposals

The federal government stated its intent to proceed with several outstanding tax and estate-planning proposals in its 2022 fall economic statement released Thursday, though it didn’t provide new details on the measures.

Many of those measures were addressed in draft legislation released in August and are slated to take effect in 2023 or for the 2023 tax year. These include the launch of the Tax-Free First Home Savings Account (FHSA), additional reporting requirements for RRSPs and RRIFs, the surtax on bank and insurers, and enhanced reporting requirements for trusts.

The comment period on the August draft legislation ended Sept. 30. The economic statement didn’t provide further details on the proposals, stating only that it “confirms the government’s previously announced intention to proceed” with them.

The government had also pledged in the 2022 federal budget to release details in the fall fiscal update on its proposed review of the existing alternative minimum tax regime. However, the update only affirmed the government’s intention to proceed with a new regime, stating that details would instead appear in the 2023 federal budget.

The investment and tax community is still awaiting information on several outstanding proposals, such as the allocation to redeemers methodology for ETFs (last addressed in draft legislation released in February) and Bill C-208 (last addressed in the 2022 federal budget).

Cryptocurrency consultation

The financial statement said consultations are launching right away on digital currencies “including cryptocurrencies, stablecoins and central bank digital currencies.”

Canada’s fiscal framework needs to keep pace with the rise of the currencies and how the digitization of money is “transforming financial systems in Canada and around the world,” the document said.

And the government is also seeking to understand the challenges digital currency poses to democratic institutions, with some types of crypto being used to avoid global sanctions and fund illegal activities.

The new consultations follow a legislative review announced in last spring’s budget. They also follow attacks on new Conservative Leader Pierre Poilievre for his suggestion during the Tory leadership campaign that cryptocurrencies could help Canadians “opt out” of inflation — an assertion that Liberals have ridiculed after the value of cryptocurrencies plummeted earlier this year.

In a separate process, the Bank of Canada has studied the potential for a central bank digital currency. It has said it doesn’t anticipate the need for it right now but wants to be prepared if that changes in the future.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.