TEI Participates in Canadian Pre-Budget Consultations.

• Date: 01 November 2020
• Author: McLeish, Watson M.

On August 10,2020, TEI submitted written recommendations to the Canadian House of Commons Standing Committee on Finance as part of its pre-budget consultations in advance of the 2021 federal budget. Thanks to the leadership of Kurtis L. Bond, chair of TEl's Canadian Income Tax Committee, this submission marked TEl's official return to direct engagement in the federal tax legislative process on Parliament Hill. TEl's recommendations, which are reprinted below, aim to build on the tax measures included in the federal government's COVID-19 Economic Response Plan to restart the Canadian economy as it recovers from the COVID-19 pandemic. TEl's recommendations were prepared under the aegis of the Institute's Canadian Income Tax Committee and its legal staff liaison.

Recommendations

* Recommendation 1: That the government amend the Income Tax Act (1) to allow for 100 percent deduction of capital expenditures in the year incurred and suspend the "available for use" limitation on deductibility.

* Recommendation 2: That the government amend the Act to extend the general carryback period for non-capital losses by five years.

* Recommendation 3: That the government amend the Act to defer the Minister of National Revenue's ability to collect disputed tax amounts from large corporations until an assessment is confirmed by the Canada Revenue Agency's Appeals Branch.

Tax Executives Institute ("TEI") is pleased to participate in this year's pre-budget consultations and submits the following recommendations for building on the tax measures included in the federal government's COVID-19 Economic Response Plan to restart the Canadian economy, as it recovers from the COVID-19 pandemic. TEI commends the government's response to the COVID-19 crisis thus far and, in particular, the speed with which the government has implemented significant and unprecedented economic relief measures, including the Canada Emergency Response Benefit ("CERB") and the Canada Emergency Wage Subsidy ("CEWS").

The government's focus to date has appropriately been on promoting public safety and providing individuals and businesses with the near-term economic support they need to survive the pandemic. As that focus begins to shift toward ensuring the long-term, sustainable recovery of the Canadian economy, however, new priorities emerge. Lawmakers must pursue responsive policies that not only consider how Canadian businesses can efficiently access liquidity, without unnecessarily increasing corporate debt, but also instill confidence in the country's fiscal and regulatory environment such that businesses feel comfortable proceeding with projects and investing now to stimulate the necessary economic activity in Canada. Accordingly, TEI respectfully urges the government to adopt the recommendations set forth herein. In our view, the timely adoption of these recommendations will facilitate a more expeditious and sustainable long-term recovery in a fiscally efficient and responsible manner.

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