Federal Budget 2010 - A Corporate Tax Practitioner’s Perspective

The 2010 Federal Budget ("Budget 2010") is themed around the Government "Leading the Way on Jobs and Growth" with the fiscal highlight being continued stimulus in 2010-2011 followed by a commitment to rapidly declining deficits in the medium term.

The Government is clear that its medium term deficit reduction is not coming from new taxes. Internationally competitive business tax rates, including already scheduled reductions, remain a key component of the desired "Canadian Economic Advantage". Indeed, as discussed in more detail below, the tax advantage is being extended into the tariff area as the budget proposes to make Canada a tariff-free zone for manufacturers by eliminating all remaining tariffs on machinery and equipment and goods imported for further manufacturing in Canada.