Fall Economic Update 2022 – A 5 Minute Summary of the Relevant Provisions for Physicians

Overall Analysis:

New details were scarce in the 2022 Fall Economic Statement; for the most part, the Honorable Chrystia Freeland provided more detail on the 2022 Budget Proposals.

 In summary, the provisions most relevant for physicians were as follows:

1. PROPOSAL: Permanent elimination of interest on Canada Student Loans, beginning April 1, 2023. Due to Covid-19 the government waived interest on student loans for two years, this proposal would eliminate interest permanently. This includes student loans that are currently being repaid.

2. The GST credit will be doubled for the next six months. Payments of increased GST credit begin today, November 4^th, 2022.

3. Rural physicians will be eligible for a maximum debt forgiveness of $60,000 (previously $40,000), effective April 1, 2023.

The following provisions are effective 2023 and remain largely unchanged from the 2022 Budget:

1. The First Home Savings Account (FHSA) will allow Canadians to save up to $40,000 for a down payment for their first home, tax-free. The specific start date of the program has yet to be announced.

For more information on this program, visit:  https://bokhaut.ca/fhsaupdates/

2. The First-Time Home Buyers’ Tax Credit will be doubled, increasing the total tax savings to up to $1,500.

3. The Multigenerational Home Renovation Tax Credit will be introduced, providing up to $7,500 in support for constructing a suite for a family member who is a senior or an adult with a disability.

4. Profits on homes purchased and held for less than 12 months will be fully taxable (in lieu of capital gains treatment) and will not be eligible for the Principal Residence Exemption. This provision is intended to target house flipping. However, there may be exceptions for certain life events.

 We expect further details on these programs to be announced in the Spring 2023 Federal Budget.

* This article was prepared on November 4, 2022. Content is for informational purposes only and is not intended to be used as professional advice. Each taxpayer’s circumstances are unique. Bokhaut CPA makes no representation as to the accuracy and completeness of the information in this article and will not be liable for any errors or omissions in this information.