Government of Canada Moves Quickly on Seniors’ Tax Relief and Other Outstanding MeasuresNovember 28, 2008
- Notice of Ways and Means Motion to implement certain provisions of the budget tabled in Parliament on February 26, 2008, to implement certain provisions of the economic and fiscal statement tabled in Parliament on November 27, 2008 and to implement other fiscal and economic measures
The Honourable Jim Flaherty, Minister of Finance, acted today to implement the one-time tax relief for holders of Registered Retirement Income Funds (RRIFs) that was announced in the Government’s 2008 Economic and Fiscal Statement. The measure, along with several initiatives outstanding from the 2008 budget and a number of other separately announced tax changes, is included in a Notice of Ways and Means Motion tabled today in the House of Commons.
“Many seniors are understandably concerned about the impact of the recent sharp decline in financial markets on their retirement savings,” said Minister Flaherty. “These are exceptional circumstances, and our Government is acting quickly and decisively to allow Canadian seniors to keep more of their savings in their RRIFs for 2008.”
The RRIF measure reduces by 25 per cent the minimum amount that a senior must withdraw from his or her RRIF in 2008. If more than the new reduced minimum amount has already been withdrawn, the excess (up to the original minimum amount) can be re-contributed and a deduction may be claimed on this amount for 2008. Similar rules will apply to variable benefit money purchase Registered Pension Plans.
Most of the outstanding 2008 budget measures and other tax changes included in today’s Motion were released in July 2008 in draft form for consultation (see News Release2008-054). Highlights include measures that:
- Clarify the application of the excess corporate holdings rules for private foundations;
- Reduce the paper burden on businesses by allowing a larger number of government entities to share Business Number-related information in connection with government programs and services;
- Facilitate the conversion of specified investment flow through (SIFT) entities (often referred to as “income trusts”) into corporations;
- Improve the existing SIFT taxation rules;
- Extend the general treatment of capital gains and losses on an acquisition of control of a corporation to gains and losses that result from fluctuations in foreign exchange rates in respect of debt denominated in foreign currency;
- Allow an enhanced carry-forward for certain investment tax credits; and
- Update technical aspects of the law to take into account financial institution accounting changes.
References in the Motion to “announcement date” are to be read as references to today’s date.
Complete explanatory notes for all of the measures will be released shortly.