At the beginning of January, finance announced a one-cent decrease for the personal use benefit rates used to compute certain employee taxable benefits for 2021.

What does that mean for commuters?

The rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers has been decreased to 27 cents per kilometre (from 28 cents/kilometre), as of January 1, 2021.

The rate used to determine the taxable benefit of an employee who is employed principally in selling or leasing vehicles has also decreased to 24 cents per kilometre (from 25 cents/kilometre) for 2021.

Finance also proposed temporary adjustments to allow employees with employer-provided vehicles to use 2019 usage to determine eligibility for the reduced standby charge and optional operating cost-benefit calculation for 2020 and 2021, in light of the COVID-19 pandemic. All other limits remain unchanged from their 2020 amounts:

  • Income tax deduction limits on tax-exempt allowances paid by employers to employees who use their personal vehicles for business purposes in 2021.
  • The ceiling on the capital cost of both non-zero-emission passenger vehicles and eligible zero-emission passenger vehicles, for CCA purposes in 2021.
  • The maximum allowable interest deduction for amounts borrowed to purchase an automobile in 2021.
  • The limit on the deductible leasing costs for leases entered into in 2021.