On December 21, 2020, the department of Finance announced not only the 2021 automobile limits, but also changes to the Automobile standby charge due to COVID-19.
Standby charge changes
In light of the impact COVID-19 lockdowns and public health measures have had on how employees use their employer-provided vehicles, the government is also proposing temporary adjustments to the automobile standby charge. For the 2020 and 2021 taxation year, it is proposed that employees be allowed to use their 2019 automobile usage to determine eligibility for the reduced standby charge. Only employees with an automobile provided by the same employer as in 2019 would be eligible for this option. For more information, please refer to the related backgrounder.
Tax-exempt allowance
The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes will remain at 59 cents per kilometre for the first 5,000 kilometres driven, and 53 cents per kilometre for each additional kilometre. For the Northwest Territories, Nunavut and Yukon the allowance is 4 cents higher, and will remain at 63 cents per kilometre for the first 5,000 kilometres driven, and 57 cents per kilometre for each additional kilometre.
Deduction Limits
The claims relating to CCA, interest on automobile loans, and leasing costs remain the same.