More than two years after the last federal budget, Canada's
Finance Minister presented the 2021 budget (Budget 2021) on April
19, 2021 (Budget Day). Some commentators speculated that Budget
2021 might include increases in the capital gains inclusion rate,
restrictions on the principal residence exemption or a new wealth
tax. While there were some important business tax changes, none of
those measures was included in Budget 2021.
Consistent with the governing Liberals' 2019 election
platform, a new measure is proposed to restrict the deductibility
of interest under an Organisation for Economic Co-Operation and
Development (OECD) inspired "earnings-stripping" rule
starting in 2023. Another new international tax measure targets
so-called "hybrid mismatch arrangements" starting July 1,
2022. The government also provided more detail on the proposed
digital services tax first announced in the November 30, 2020 Fall
Economic Statement (FES) (see our Blakes Bulletin: Fall
