2022 Budget highlights for retail: Small business tax rate, credit card fees

Last Thursday, the federal government released its 2022 Budget. Outside of some of the larger items on dental care and military spending, there were some notable items for retailers, including:

• Small business tax rate: Proposal to phase out access to the small business tax rate more gradually – when taxable capital reaches $50 million, rather than at $15 million.
• Credit card fees: Re-committed to lowering the cost of credit card fees in a way that benefits small businesses and protects existing reward points for consumers;
• Temporary Foreign Workers: $29.3 million investment over three years to introduce a Trusted Employer Model which will reduce red tape for highest standard repeat employers – with exceptional living conditions, protections, and wages in high-demand fields. Further details on this program will be announced in the coming year;
• Employment program for those with disabilities: Budget 2022 also proposes to provide $272.6 million over five years to support the implementation of an employment strategy for persons with disabilities through the Opportunities Fund. This will help to address labour market shortages through increased participation by persons with disabilities and make workplaces more inclusive and accessible;
• Cannabis tax framework changes: Allow licensed cannabis producers to remit excise duties quarterly rather than monthly, the allowance of Canada Revenue Agency (CRA) to approve certain contracts for service arrangements between two licensed cannabis producers, to amend penalty provisions, and to exempt holders of a Health Canada issued Research Licence or Cannabis Drug Licence from the requirement to be licensed under the excise duty regime;
• Canada Growth Fund: Establishment of the Canada Growth Fund to attract substantial private sector investment and reach national economic goals, such as reducing emissions, bolstering the economy with growth of low-carbon industries, and supporting the restructuring of critical supply chains;
• Low-alcohol beer: The budget will eliminate excise duty on low-alcohol beer, effective on July 1, 2022;
• Excise duty on vaping products: Introduction of federal excise duty on vaping products, including solid or liquid vaping substances. Budget 2022 proposes to allow for a transition period for retailers by allowing sales of unstamped products, that are in inventory as of October 1, 2022, up until January 1, 2023;
• Accelerated tax deductions: Expanded to include air-source heat pumps for business investments in clean energy equipment.