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The Deputy Prime Minister and federal Minister of Finance, Chrystia Freeland, presented the 2021 federal Economic and Fiscal Update (economic statement) on 14 December 2021.

The economic statement does not change corporate or personal income tax rates, but does:

  • introduce a 25% refundable tax credit for small businesses that incur expenses for air quality improvements in qualifying locations between 1 September 2021 and 31 December 2022
  • provide a refundable tax credit for eligible farming businesses in federal carbon pricing backstop jurisdictions
  • extend the simplified rules for deducting home office expenses to the 2021 and 2022 taxation years, and increase the maximum annual deductible amount
  • confirm the government’s intention to enact a digital services tax
  • provide further details on the proposed underused housing tax, which is to be effective for the 2022 calendar year.

This Tax Insights discusses these and other tax initiatives proposed in the economic statement.