Canada

Individual - Significant developments

Last reviewed - 17 June 2020

Canada's individual tax summary reflects most 2020 provincial and territorial budgets; due to the economic uncertainty of the COVID-19 pandemic, Ontario only released an economic and fiscal update, and Newfoundland and Labrador has not yet released its 2020 budget. In addition, the federal government has not released its 2020 budget, and it is uncertain whether a federal budget or economic and fiscal update will be tabled in the coming months.

The summary is based on enacted and proposed legislation and assumes that the proposed legislation will become law. Generally, budget proposals and draft legislation are enacted into law, even with a minority federal government, which is currently the case.

COVID-19 individual tax measures

In response to the COVID-19 pandemic, the federal, provincial and territorial governments implemented various measures to help mitigate the economic impact to Canadian individuals and businesses. Individual tax measures include extending the deadline for:

  • 2019 tax return filings
  • 2019 tax return final payment
  • certain 2020 instalment payments

See Tax returns ad Payments of tax in the Tax administration section for more information. 

Employee stock options

Draft legislative proposals limit the use of the current employee stock option tax regime and move towards aligning the tax treatment of stock options with the United States for employees of large, long-established, mature firms. See Equity compensation in the Income determination section for more information. 

Mutual fund trust redemptions

Draft legislative proposals address deferral and character conversion benefits realised by mutual fund trust unitholders on redemption of their mutual fund trust units, by denying deductions to mutual fund trusts under certain conditions, for taxation years of mutual fund trusts beginning after 18 March 2019. See Capital gains in the Income determination section for more information.