2022 Changes - Auto Costs, CEBA Loan and Ontario 2 New Programs!
Welcome to 2022 and hope you had a Happy New Year!
Auto Cost Rule Changes January 1, 2022
The Department of Finance Canada announced the automobile income tax deduction limits and expense benefit rates that will apply in 2022.
The following changes to limits and rates will be taking effect as of January 1, 2022:
The ceiling for capital cost allowances (CCA) for zero-emission passenger vehicles will be increased from $55,000 to $59,000, before tax, in respect of vehicles (new and used) acquired on or after January 1, 2022.
The ceiling for CCA for passenger vehicles will be increased from $30,000 to $34,000, before tax, in respect of vehicles (new and used) acquired on or after January 1, 2022.
Deductible leasing costs will be increased from $800 to $900 per month, before tax, for new leases entered into.
The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes in the provinces will increase by two cents to 61 cents per kilometre for the first 5,000 kilometres driven, and 55 cents for each additional kilometre. For the territories, the limit will also increase by two cents to 65 cents per kilometre for the first 5,000 kilometres driven, and 59 cents for each additional kilometre.
The general prescribed rate used to determine the taxable benefit of employees relating to the personal portion of automobile expenses paid by their employers will be increased by two cents to 29 cents per kilometre. For people who are employed principally in selling or leasing automobiles, the rate used to determine the employee’s taxable benefit will be increased by two cents to 26 cents per kilometre.
These changes reflect recent increases in the Consumer Price Index (CPI). The maximum allowable interest deduction for new automobile loans will remain at $300 per month for 2022 as it continues to be appropriate to prevailing interest rates.
CEBA Loan - Extension 1 year and Repayable December 31, 2023
The Deputy Prime Minister and Minister of Finance, announced January 12, 2022 that the repayment deadline for CEBA loans to qualify for partial loan forgiveness is being extended from December 31, 2022, to December 31, 2023, for all eligible borrowers in good standing.
This extension will support short-term economic recovery and offer greater repayment flexibility to small businesses and not-for-profit organizations, many of which are facing continued challenges due to the pandemic. Repayment on or before the new deadline of December 31, 2023, will result in loan forgiveness of up to a third of the value of the loans (meaning up to $20,000).
Outstanding loans would subsequently convert to two-year term loans with interest of 5 per cent per annum commencing on January 1, 2024, with the loans fully due by December 31, 2025.
The government is also announcing that the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund is extended to December 31, 2023.
Ontario COVID-19 Small Business Relief Grant- $10,000
The government is announcing an Ontario COVID-19 Small Business Relief Grant for small businesses that are subject to closure under the modified Step Two of Roadmap to Reopen.
What you'll get
Eligible businesses that are part of the list below which were subject to closures as a result of the province's move to the modified Step Two of the Roadmap to Reopen will receive a grant of $10,000.
To receive the grant, a small business identified from the eligible list below must:
be required to close due to public health orders that took effect 12:01 a.m. on January 5, 2022
have fewer than 100 employees as of December 31, 2021
be an active business as of January 14, 2022
Eligible businesses that previously qualified for the Ontario Small Business Support Grant will be pre-screened to verify eligibility and may need to provide some additional information but will not need to apply for the new program.
Newly established and newly eligible small businesses will need to apply once the application portal opens in the coming weeks. Small businesses that qualify can expect to receive their payment in early February.
Eligible small businesses include:
restaurants and bars
facilities for indoor sports and recreational fitness activities (including fitness centres and gyms)
performing arts and cinemas
museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions
performing arts venues and cinemas, museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions
meeting or event spaces
tour and guide services
conference centres and convention centres
driving instruction for individuals
before- and after- school programs
Ontario Business Costs Rebate Program: applications now open
We are introducing the new Ontario Business Costs Rebate Program to support businesses that are most impacted by provincial public health measures in response to the Omicron variant of COVID-19covid 19.
What you'll get
Eligible businesses that are required to close or reduce capacity will receive rebate payments for a portion of the property tax and energy costs they incur while subject to these measures. Eligible businesses required to reduce capacity to 50 per cent, such as smaller retail stores, will receive a rebate payment equivalent to 50 per cent of their costs, while businesses required to close for indoor activities, such as restaurants and gyms, will receive a rebate payment equivalent to 100 per cent of their costs. Payments to eligible businesses will be retroactive to December 19, 2021 when public health measures were first effective.
Eligible businesses include:
restaurants and bars
personal care services (hair or body)
retailers (non-grocery, less than 50,000 sq ft)
small grocery stores (less than 5,000 sq ft)
gyms and other indoor sports and recreational facilities
places of worship
indoor meeting and event spaces
indoor concert venues, theatres and cinemas
casinos, bingo halls and other gaming establishments
indoor portion of horse and car racing tracks
indoor museums, galleries, aquariums, zoos, science centres, landmarks, historic sites, botanical gardens and similar attractions
indoor clubhouses at outdoor recreational amenities
indoor business associated with tour and guide services
steam rooms and saunas
bathhouses and sex clubs
indoor teaching and instruction centres
indoor driving instruction centres
day camps and overnight camps for children
before- and after-school programs
pet and veterinary services
Further details can be found in the program guide. Learn more here.
How to apply
Online applications for this program are now open. Apply now here.
For questions contact ServiceOntario at:
NOTICE TO READERS
This update has been prepared for educational purposes only on January 21, 2022.
Peter Wiesner CPA, Licensed Public Accountant nor anyone involved in the preparation or distribution of this tax planning tips any contractual, tortuous or other form of liability for its contents or for any consequences arising from its use.
Please contact Peter Wiesner CPA at 905-898-3355 before implementing any tax strategies or indirect advice resulting from this information.
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