Tax Flash Bulletin
Federal Economic and Fiscal Update 2021
On December 14, 2021, Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented Canada’s Economic and Fiscal Update 2021. New tax measures in the form of draft legislation accompanied the update documents. We have summarized highlights of the personal and small business tax measures.
Individuals
Personal Tax Rates
There were no proposed changes to individual income tax rates for 2021 or 2022. The Canada Revenue Agency (CRA) released the federal 2022 tax brackets and personal amounts earlier this month at an index rate of 2.4%. The fiscal update did not include any changes to capital gains inclusion rates.
| 2021 Taxable Income | 2022 Taxable Income | Tax Rates |
|---|---|---|
| $0 to $49,020 |
$0 to $50,197 | 15% |
| $49,020 to $98,040 |
$50,197 to $100,392 | 20.5% |
| $98,040 to $151,978 |
$100,392 to $155,625 |
26% |
| $151,978 to $216,511 | $155,625 to $ 221,708 | 29% |
| Over $216,511 |
Over $221,708 |
33% |
Extension of the Simplified Home Office Expense Deduction
The update extended the simplified home office expense deduction into the 2021 and 2022 tax years. When introduced as a temporary measure for 2020, the flat rate deduction maximum was $400 per taxpayer working from home. The government will increase the temporary flat rate to $500 for the 2021 and 2022 personal taxation years to reflect full calendar years since the pandemic began.