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In its regularly scheduled interest rate announcement made on September 8, the Bank of Canada (the “Bank”) indicated that, in its view, no change to current rates was needed. Accordingly, the Bank Rate remains at 0.5%.

In its announcement, the Bank noted that the rate of inflation remains, as expected, above 3% and that the factors contributing to that rate include base-year effects, gasoline prices, and pandemic-related supply bottlenecks. While the Bank expects such factors to be transitory, it will nonetheless continue to monitor them closely.

The Bank also reiterated its commitment to holding interest rates at current levels until its 2% inflation target is sustainably achieved. The Bank expects that rate to be achieved during the second half of 2022.

The press release announcing the Bank's decision can be found on its website at https://www.bankofcanada.ca/2021/09/fad-press-release-2021-09-08/. The next scheduled interest rate announcement from the Bank will take place on October 27, 2021.

Each year, on pre-announced dates, the Bank of Canada releases its decision on any changes to current interest rates. The Bank recently issued a listing of the dates on which such interest rate announcements will take place during 2022, and those dates are as follows.

• Wednesday, January 26
• Wednesday, March 2
• Wednesday, April 13
• Wednesday, June 1
• Wednesday, July 13
• Wednesday, September 7
• Wednesday, October 26
• Wednesday, December 7

There are three remaining scheduled interest rate announcement dates during 2021, and those dates are September 8, October 27, and December 8.

The press release outlining the interest rate announcement dates is available on the Bank's website at https://www.bankofcanada.ca/2021/07/bank-canada-publishes-its-2022-schedule-policy-interest-rate-announcements-release-monetary-policy-report-other-major-publications/.

The benefit year for many federal tax credits, including the GST/HST tax credit, runs from July 1 to June 30 of the following year. Each year, credit amounts change, as do the income thresholds which determine, in part, eligibility for the credit.

The Canada Revenue Agency (CRA) has issued its guide to the GST/HST credit for the current (July 1, 2021 to June 30, 2022) benefit year. That guide, which includes information on related provincial and territorial credits, can be found on the CRA's website at rc4210-21e.pdf (canada.ca).

In July of this year, the federal government announced that the Canada Emergency Wage Subsidy (CEWS) program would be extended to be available to employers until October 2021.

The Canada Revenue Agency (CRA) has issued a warning to employers who may be eligible for the CEWS of the existence of tax scams relating to applications for the benefit. Such scams artificially inflate or falsify eligibility criteria for the CEWS in order to increase the value of the subsidy, and the promoters of the scam then receive a flat fee or a percentage of the return.

The CRA warning, which can be found on its website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2021/businesses-watch-out-for-canada-emergency-wage-subsidy-tax-schemes.html, notes that employers can make amendments or corrections to CEWS applications, even after such applications are filed.

This year's federal Budget included a proposal for a “luxury tax” which would apply, at varying rates, to sales of specified goods over a prescribed price threshold. The proposal indicated that the luxury tax would be imposed beginning January 1, 2022.

The federal government has announced that a consultation process is being held with respect to the design of the proposed luxury tax. That process will end on September 30, 2021 and interested stakeholders can make representations to the federal government in several ways.

Details of the consultation process, including a backgrounder on the proposed luxury tax and information on how make a submission, can be found on the Finance Canada website at https://www.canada.ca/en/department-finance/news/2021/08/government-of-canada-launches-consultations-on-proposed-luxury-tax.html.

The Canadian tax system provides credits and incentives for taxpayers who carry out qualifying scientific research and experimental development (SR&ED) work. When claims are made for such credit and incentives, an issue that frequently arises is whether the activities undertaken actually qualify as SR&ED.

The Canada Revenue Agency recently issued a guideline document to assist taxpayers in determining whether the work they are carrying out does or does not qualify for purposes of SR&ED credits and incentives. That guideline document can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/policies-procedures-guidelines/guidelines-eligibility-work-sred-tax-incentives.html.

In the document, the CRA notes that there has been no change to the definition of SR&ED. The new guidelines have been issued to provide simplified explanations of the program requirements, clear breakdowns of what constitutes eligible work, and links to further guidance on both what can be claimed and how such claims need to be supported.

The most recent release of Statistics Canada's Consumer Price Index shows that the rate of inflation for the month of July, as measured on a year-over-year basis, stood at 3.7%. The comparable rate for the month of June was 3.1%.

During July, prices rose across 6 of the 8 major index components, with the cost of shelter being the largest contributor to inflation. While the cost of gasoline continued to increase, it did so a at slower rate than recorded during the month of June 2021.

Details of the inflation picture for the month, by province and by index component, can be found in the August release of the Consumer Price Index, available on the StatsCan website at The Daily — Consumer Price Index, July 2021 (statcan.gc.ca).

The prescribed leasing interest rate mandated by the Canada Revenue Agency (CRA) must be calculated using bond yield information found on the Bank of Canada website. That calculation shows that the prescribed interest leasing rate for the month of September 2021 will be 2.64%.

The CRA's instructions on how to calculate the prescribed leasing interest rate, which includes a link to the necessary bond yield information can be found at https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses/leasing-costs/prescribed-interest-rates.html.

Individual taxpayers who pay income tax by instalments must make the third instalment payment of the year on or before Wednesday September 15, 2021.

Such taxpayers should receive an Instalment Reminder from the Canada Revenue Agency (CRA) during the month of August. Information on the options open to such taxpayers with respect to the amount of any instalment payment, and how such payments may be made, can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/payments-cra/individual-payments/income-tax-instalments.html.

The most recent release of Statistics Canada's Consumer Price Index shows that the rate of inflation for the month of June, as measured on a year-over-year basis, reached 3.1%. That rate was slightly lower than the year-over-year rate of 3.6% recorded for May 2021.

The largest contributors to inflation during June were the costs of shelter and transportation. When the cost of gasoline is excluded, the year-over-year rate of inflation for June is 2.2%.

More details of the inflation picture for the month, by province and index component, can be found in the July release of the Consumer Price Index, available on the StatsCan website at https://www150.statcan.gc.ca/n1/daily-quotidien/210728/dq210728a-eng.htm?HPA=1&indid=3665-1&indgeo=0.