2009 Federal Budget – Business Tax Prospects

  • Effective January 1, 2009 the small business limit was increased to $500,000 from $400,000. The increase will be prorated for non-calendar year-ends.
  • For eligible new computers and systems software used in Canada, purchased after January 27, 2009 and prior to February 2011, a capital cost allowance (CCA) rate of 100% applies, with no half-year rule.
  • The budget proposes to increase to $350,000 ($500,000 if acquiring real property) the maximum eligible loan amount that a small business can access under the Small Business Financing Program.
  • For manufacturing and processing equipment, the 50% straight-line CCA rate has been extended for purchases of eligible equipment in 2010 and 2011. The half-year rule will apply such that the full write off may be claimed over three taxation years.
  • The budget proposed to freeze the Employment Insurance (EI) rates at $1.73 per $100 of insurable earnings for both 2009 and 2010.
  • The EI program offers benefits to qualifying workers willing to enter into worksharing agreements. For 2009 and 2010, the budget proposes to extend work-sharing agreements by 14 weeks to a maximum of 52 weeks. The budget increases all regular EI benefit entitlements by five weeks to a maximum of 50 weeks for 2009 and 2010.

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