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The 2024 Canadian Federal Budget: Key Tax Updates

On April 16, 2024, the Federal government presented its 2024 Budget titled “Fairness for every generation” in the House of Commons. This budget introduces several significant tax changes that will affect individuals and businesses across Canada. If you’re looking for “taxes near me” or “tax preparation near me,” this comprehensive summary will help you understand the key updates and how they might impact your tax filings. Let’s dive into the main points of the new budget.

Personal Income Tax Measures

Firstly, there are no changes proposed to the Federal individual tax rates as part of the 2024 Federal budget. Here are the income tax rates for 2024 based on taxable income:

  • $55,867 or less: 15.00%
  • More than $55,867 but not more than $111,733: 20.50%
  • More than $111,733 but not more than $173,205: 26.00%
  • More than $173,205 but not more than $246,752: 29.00%
  • More than $246,752: 33.00%

Capital Gains Inclusion Rate

A notable change in the 2024 budget is the increase in the capital gains inclusion rate. Currently, 50% of a capital gain is included in a taxpayer’s income. The new budget proposes to increase this rate to 66.66% for corporations and trusts. For individuals, this increase applies to the portion of capital gains exceeding $250,000, effective from June 25, 2024.

For those searching for “tax filing near me” or “tax professional near me,” understanding these changes is crucial. The $250,000 threshold applies to capital gains net of any current-year capital losses, past capital losses used to reduce current-year gains, and gains eligible for the Lifetime Capital Gains Exemption, the proposed Employee Ownership Trust Exemption, or the proposed Canadian Entrepreneurs’ Incentive.

Net Capital Losses and Transitional Rules

Net capital losses from previous years remain deductible against current-year gains, adjusted for the inclusion rate change. This ensures that losses realized before the rate change can offset equivalent gains afterward. Transitional rules will apply for tax years spanning before and after June 25, 2024, although the $250,000 threshold for individuals will not be prorated and will apply solely to net gains post-change.

Canadian Entrepreneurs’ Incentive

The 2024 budget introduces the Canadian Entrepreneurs’ Incentive, aimed at reducing the tax rate on capital gains from the sale of qualifying shares by eligible individuals. Under this initiative, the capital gains inclusion rate would be halved to 33.33% for qualifying dispositions, applicable to up to $2 million in lifetime capital gains per individual.

For those eligible, this incentive gradually increases the lifetime limit by $200,000 annually starting from January 1, 2025, reaching $2 million by January 1, 2034. This measure benefits founders of small businesses, as long as they meet specific conditions such as holding shares for a minimum of five years and being actively engaged in the business.

Lifetime Capital Gains Exemption (LCGE)

The tax system grants individuals a lifetime exemption from income tax on capital gains realized from the sale of qualified small business corporation shares and eligible farm or fishing property. Known as the Lifetime Capital Gains Exemption (LCGE), this exemption amounts to $1,016,836 in 2024 and is adjusted annually for inflation.

The 2024 budget proposes to increase the LCGE to up to $1.25 million for dispositions occurring on or after June 25, 2024. Indexation of the LCGE would resume in 2026.

Home Buyers’ Plan (HBP)

One of the most impactful changes in the 2024 Federal Budget is the increase in the withdrawal limit from registered retirement savings plans (RRSPs) under the Home Buyers’ Plan (HBP). The withdrawal limit has been raised from $35,000 to $60,000, effective for withdrawals made after Budget Day 2024. This increase also applies to withdrawals made for the benefit of a disabled individual. Additionally, the budget introduces temporary repayment relief, deferring the start of the 15-year repayment period by an extra three years for participants making their first withdrawal between January 1, 2022, and December 31, 2025. Consequently, the repayment period will commence five years after the initial withdrawal, offering significant financial flexibility to new home buyers.

Employee Ownership Trust Tax Exemption

The Budget provides clarity on the Employee Ownership Trusts (EOT), specifically detailing the exemption of the first $10 million in capital gains realized on the sale of a qualifying business to an EOT. The new measures include qualifying conditions such as active engagement in the business for a minimum of 24 months before the transfer, residency requirements for beneficiaries, and the use of assets in active business operations. Disqualifying events occurring within 36 months of the sale could void the exemption. This provision is designed to encourage business owners to consider selling their companies to employee ownership trusts, fostering a more equitable business environment.

Alternative Minimum Tax (AMT)

Significant amendments to the Alternative Minimum Tax (AMT) have been introduced, aimed at ensuring high-income individuals pay their fair share of taxes. The changes include increasing the Charitable donations tax credit claimable under the AMT from 50% to 80% and exempting Employee Ownership Trusts from AMT. These amendments, effective for taxation years beginning on or after January 1, 2024, will provide a more balanced approach to taxation and reduce the burden on low to middle-income taxpayers.

Mineral Exploration Tax Credit

The Mineral Exploration Tax Credit, which supports junior mining companies engaged in grassroots mineral exploration, has been extended for an additional year. This extension applies to flow-through share agreements entered into on or before March 31, 2025. This measure continues to incentivize investment in mining activities, promoting economic growth in the resource sector.

Volunteer Firefighters and Search and Rescue Volunteers Tax Credits

The Budget doubles the Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit from $3,000 to $6,000, effective in 2024. This increase allows individuals who volunteer at least 200 hours annually as firefighters or search and rescue volunteers to claim a 15% non-refundable tax credit. This enhanced incentive acknowledges the vital contributions of these volunteers and provides financial relief.

Canada Child Benefit (CCB)

The Canada Child Benefit (CCB) program will now extend eligibility for payments in respect of a deceased child for six months following their death, effective for deaths occurring after 2024. This amendment ensures continued financial support for families during difficult times, mitigating the financial impact of losing a child.

Disability Supports Deduction

The Disability Supports Deduction has been expanded to include additional expenses that facilitate earning income or attending school, such as ergonomic work chairs, bed positioning devices, and digital pen devices. These changes, effective from the 2024 taxation year onwards, provide greater support for individuals with disabilities, helping them to integrate better into educational and professional environments.

Qualified Investments for Registered Plans

The Budget seeks feedback from stakeholders on modernizing the rules for qualified investments for registered plans like RRSPs, RRIFs, and TFSAs. The proposed changes aim to harmonize rules across all registered plans, reassess the qualification of certain annuities, and consider the eligibility of crypto-backed assets as qualified investments. This modernization effort aims to enhance clarity and coherence, promoting a more streamlined investment environment.

Deduction for Tradespeople’s Travel Expenses

A new unified deduction for travel expenses of eligible tradespeople and apprentices in the construction industry is proposed. This change aims to simplify the tax code and provide consistent support for tradespeople across the country.

Business Income Tax Measures

The Budget introduces an accelerated Capital Cost Allowance (CCA) for investments in purpose-built rental housing and productivity-enhancing assets. A CCA rate of 10% will be available for new eligible purpose-built rental projects beginning construction between Budget Day and January 1, 2031. Additionally, immediate expensing for certain productivity-enhancing assets acquired before January 1, 2027, is introduced, promoting investment in innovation and technology.

Clean Electricity Investment Tax Credit

A refundable Clean Electricity Investment Tax Credit set at 15% of eligible property’s capital cost has been introduced, effective for property acquired and available for use on or after Budget Day and before 2035. This credit supports investments in renewable energy sources and technologies, promoting cleaner energy production.

Finding the Right Tax Services Near You

Understanding and adapting to these changes can be complex. If you’re searching for “tax company near me,” “tax accountants Milton,” “tax return accountant near me,” or “tax services near me,” it’s essential to consult with professionals who are up-to-date with these new regulations. A reliable tax professional can provide expert guidance tailored to your specific situation, ensuring you maximize your benefits under the new tax laws.

Why Choose WK Tax Services?

At WK Tax Services, we specialize in providing comprehensive tax preparation and filing services. Our team of experienced tax accountants in Milton is equipped to help you navigate these changes and optimize your tax strategy. Whether you need assistance with personal income tax, capital gains, or business tax planning, we are here to support you every step of the way.


The 2024 Federal Budget introduces numerous changes aimed at enhancing financial flexibility, supporting economic growth, and promoting fairness in the tax system. From significant increases in the Home Buyers’ Plan withdrawal limit to detailed provisions for Employee Ownership Trusts and expansions in tax credits for volunteers and individuals with disabilities, the Budget offers a comprehensive set of measures to benefit a wide range of Canadians. For detailed advice on how these changes may impact your personal or business finances, WKTAX Services is here to help. Contact us for tailored tax planning and compliance services to navigate the new fiscal landscape effectively.