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December 2, 2020

Canadian Government presents Federal Fall Economic Statement 2020

Our strategy is clear: We will do whatever it takes to help Canadians through this crisis. We will invest in every necessary public health measure. We will support Canadians and Canadian businesses, in a deliberate, prudent and thoughtful way. And we will ensure the Canadian economy that emerges from this pandemic is more robust, inclusive and sustainable than the one that preceded it, with a stronger, more resilient middle class.”

Deputy Prime Minister and Finance Minister Chrystia Freeland

2020 Fall Economic Statement

On 30 November 2020, Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland tabled Supporting Canadians and Fighting COVID-19: Fall Economic Statement 2020. The Fall Economic Statement (FES) contains several tax measures affecting individuals and corporations. As set out in Table A, the Minister anticipates a deficit of CA$381.6b1 for 2020–21 and projects deficits for each of the next five years.

Table A: Projections of federal budgetary deficit

Changes to the Fiscal Outlook since the 2019 Economic and Fiscal Update (EFU 2019):







Economic and Fiscal Snapshot (EFS) 2020 budgetary balance2



Economic and fiscal developments since EFU 2019



Re-estimates of COVID measures included in EFS 2020



Revised budgetary balance before policy actions and investments



Policy actions since EFS 2020


Investments in the FES 2020


Final budgetary balance (i.e., deficit)



Budgetary balance before planned stimulus (percent of GDP)



Federal debt before planned stimulus (percent of GDP)



Note: Numbers may not add due to rounding.

Several income tax measures, and the accompanying legislative amendments, are proposed in the FES, including measures with respect to:

  • Amendments to the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy (including the related lockdown support)
  • Employee stock options
  • The Canada Child Benefit
  • Registered disability savings plans
  • Patronage dividends paid in shares in respect of agricultural cooperatives

Also, several sales tax measures, and the accompanying legislative amendments, are proposed in the FES, including measures with respect to:

  • Goods and Services Tax/Harmonized Sales Tax (GST/HST) application in relation to e-commerce supplies
  • GST/HST on cross-border digital products and services
  • GST/HST on goods supplied through fulfilment warehouses
  • GST/HST on platform-based short-term accommodations
  • GST/HST relief on face masks and face shields

The Government also outlined other measures to improve tax fairness and strengthen compliance by:

  • Introducing a domestic unilateral tax on corporations providing digital services, which would apply from 1 January 2022, until a coordinated multilateral approach (developed by international partners and led by the Organisation for Economic Co-operation and Development) is introduced
  • Targeting the unproductive use of Canadian housing by foreign nonresident owners
  • Funding new initiatives and extending existing programs targeting international tax evasion
  • Initiating consultations to modernize Canada’s anti-avoidance rules
  • Simplifying the home office expense deduction

Additional information and insight with respect to these proposals will be discussed shortly in greater detail in upcoming EY Global Tax Alerts.

For more information on these measures, see Supporting Canadians and Fighting COVID-19.


1. Currency references in this Alert are to the CA$.

2. The EFS was delivered on 8 July 2020. See EY Global Tax Alert, Canada: Federal Government delivers its 2020 Economic and Fiscal Snapshot, dated 9 July 2020.


For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (Canada), Toronto
Ernst & Young LLP (Canada), Montréal
Ernst & Young LLP (Canada), Calgary
Ernst & Young LLP (Canada), Vancouver
Ernst & Young LLP (United States), Canadian Tax Desk, New York



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