Weekly tax highlights - October 6, 2011
October 6, 2011
Harmonization of the QST regime
On September 30, 2011, the Prime Minister of Canada and the Premier of Quebec announced that they had signed a memorandum of agreement concerning the harmonization of the Quebec sales tax (QST) and the federal goods and services tax (GST). More than 19 years after a value-added tax system was put in place, Quebec is obtaining $2.2 billion in financial compensation from the federal government. In contrast to the other provinces, the harmonization agreement does not involve the implementation of a single harmonized sales tax (HST). The Act with respect to the Quebec sales tax will continue to apply, with amendments that will take effect according to the terms of the agreement. Thus, the GST and QST will always appear separately on merchants’ invoices. The planned date for implementing the amended QST is January 1, 2013. Read more in Deloitte’s latest issue of Canadian Indirect Tax News.
Minister of Finance introduces Bill C-13 to implement 2011 Budget
On October 4, 2011, the Minister of Finance, Jim Flaherty, introduced in the House of Commons the “Keeping Canada's Economy and Jobs Growing Act” which received first reading as Bill C-13. This bill implements the majority of tax measures from the 2011 Budget and reflects the public feedback that was requested when the draft legislation was released on August 16, 2011. The bill also contains other measures that were referred to in the 2011 Budget as previously announced measures. A summary of the bill can be found in the accompanying news release.
The Fiscal Monitor – budgetary deficit of $7.1 billion for the period of April to July 2011
In the September 2011 edition of The Fiscal Monitor, the Department of Finance provided an overview of the budgetary deficit for the first four months (April to July) of the 2011-2012 fiscal year. The deficit in July was $1.6 billion. Thus, the total deficit for the four month period was $7.1 billion, compared to a deficit of $7.7 billion reported in the same period last year. For the four months combined, revenues increased by $2.4 billion, or 3.2%, to $78.0 billion. Total program expenses in that period were $74.1 billion, up $1.0 billion, or 1.4%, from the prior year.
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