2022 Federal Budget
The federal government released their 2022 federal budget on the 7th day of April, 2022. Since the Liberal and NDP agreement, this is the first budget that has been released. In order to provide assistance for Canadians during periods of economic uncertainty, the budget houses some new spending initiatives.
Highlights of the 2022 Federal Budget
The 2022 federal budget that was recently released and here are some the highlights as they may relate to you as a consumer and as a Canadian citizen.
Tax-Free First Home Savings Account
The 2022 Federal Budget initiates an FHSA, which stands for the Tax-Free First Home Savings Account. In order for individuals to save for their first home, the FHSA is a registered account that does exactly that. As a Canadian is making contributions to their FHSA, these contributions would be deductible while any income earned within the FHSA would not be subject to taxes. Additionally, a withdrawal from the FSHA done for the purpose of purchasing a home would not be taxable.
Home Buyers’ Plan
In addition to the FHSA, the 2022 Federal Budget sees the Home Buyers’ Plan, which essentially allows an individual to take up to $35,000 from their RRSP in order to purchase a home. The perk here is that they will not have to pay any tax on this amount. Within 15 years of withdrawing this amount (starting year 2, following the year the withdrawal took place) the total amount borrowed must be repaid towards an RRSP.
It’s important for individuals to know that they will not be able to make a withdrawal through the HBP as well as the FHSA. They may only choose one of the options in respect to the same home.
2022 Federal Budget Considers Anti-Money Laundering
The Budget 2022 plans to build legislative changes to strengthen the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, Criminal Code, and other legislation in order to improve authorities’ detection, deterrence, investigation, and prosecution of financial crimes as well as ensure that the government has adequate tools necessary to maintain financial integrity and economic security.
Strengthening Sanctions
Additionally, in the 2022 Federal Budget, the government plans to submit legislation that would define the authority of the Minister of Foreign Affairs to seize and dispose of assets belonging to sanctioned persons and organizations.
Measure That Have Been Announced in the Past
The government’s Budget reaffirms its intention to continue with the following previously announced tax and related initiatives, as modified in response to public input and debate since their publication:
- Legislative bills published on February 4, 2022, for electronic filing and certification of tax and information returns, postdoctoral fellowship income verification, and correcting plan mistakes
- Increase of OAS
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May 24, 2022