2009 Federal Budget – Business Tax Prospects

By admin on March 2, 2009 Comment Bubble Leave a comment

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.