Budget 2024: Capital Gains Inclusion Rate to Increase

On April 16, 2024 (“Budget Day”), Canada’s Deputy Prime Minister and Minister of Finance tabled Budget 2024: Fairness for Every Generation (“Budget 2024”).

The boldest tax measure in Budget 2024 is the proposed increase to the capital gains inclusion rate from one-half to two-thirds for capital gains realized on or after June 25, 2024, subject to limited annual relief for individuals. The impact of this change will be profound, resulting in a much higher tax on death for individuals and lower after-tax return to investors and stakeholders on standard commercial transactions, and neutralizing the benefit of an attempted capital gains strip transaction. Moreover, the employee stock option deduction, which is designed to achieve capital gains-like treatment on a stock option benefit, will consequently be reduced.

Among the business tax measures proposed by Budget 2024 are strict measures to ensure compliance with requests for information and assistance by the Canada Revenue Agency (the “CRA”) and the introduction of rules to prevent the avoidance of tax debts, with severe monetary penalties for non-compliance. 

Budget 2024 proposes to introduce new rules that foster financial reporting and due diligence by crypto-service providers and broaden the scope for the CRA to issue waivers in respect of withholding for services rendered in Canada by non-residents.

Budget 2024 announces a number of personal tax measures, including an increase to the lifetime capital gains exemption limit to $1.25 million; a new targeted tax exemption known as the Canadian Entrepreneurs’ Incentive; and a $10-million capital gains exemption available to certain individuals on the sale of shares to an Employee Ownership Trust.

CAPITAL GAINS INCLUSION RATE

Budget 2024 proposes to increase the capital gains inclusion rate for capital gains realized on or after June 25, 2024, from one-half to two-thirds except that individuals will still benefit from the one-half inclusion rate in respect of the first $250,000 of capital gain realized in any given year.

The $250,000 annual threshold would apply to capital gains realized by an individual, either directly or though a partnership or trust, net of: (i) current-year capital losses, (ii) capital losses from other years applied to reduce current-year capital gains, and (iii) capital gains sheltered by the lifetime capital gains exemption (“LCGE”), the proposed Employee Ownership Trusts (“EOTs”) exemption or the proposed Canadian Entrepreneurs’ Incentive (“CEI”). The $250,000 annual threshold would be fully available in 2024 (it will not be prorated).

Employees who claim the employee stock option deduction would now only be entitled to a one-third deduction (rather than one-half) of the taxable benefit for taxable benefits in excess of the $250,000 threshold.

Net capital losses realized in years prior to the rate change would continue to be deductible against taxable capital gains realized after the rate change by adjusting the value of such losses to reflect the inclusion rate of the capital gains being offset. Accordingly, a capital loss realized prior to the rate change would fully offset an equivalent capital gain realized after the rate change.

Capital gains on sales of principal residences will remain tax-free. However, capital gains on other capital properties and investment properties (such as cottages and marketable securities) would be subject to the rules described above.

Transitional rules would be required to separately identify capital gains and losses realized (i) before June 25, 2024, and (ii) on or after June 25, 2024. Budget 2024 announces that other consequential amendments would also be made to reflect the new inclusion rate and that additional design details will follow in the coming months.

Taxpayers may wish to consider transactions whereby capital gains may be realized prior to June 25, 2024. It will be important to consider whether such transactions are advisable in the circumstances and the manner in which any such capital gains may be realized.

BUSINESS INCOME TAX MEASURES

Exemption From EIFEL Rules for Purpose-Built Rental Housing

The proposed “excessive interest and financing expenses limitation” (“EIFEL”) rules generally limit a targeted taxpayer’s net interest and financing expenses to 30% of “adjusted taxable income” (i.e., EBITDA computed under the rules in the Income Tax Act (Canada) (the “Tax Act”)).

Budget 2024 proposes to include a new elective exemption from the EIFEL rules for interest and financing expenses, incurred before January 1, 2036, in respect of arm’s-length financing used to build or acquire eligible purpose-built rental housing in Canada.

The eligibility criteria is consistent with the eligibility criteria for the temporary enhancement to the Goods and Services Tax (GST) New Residential Rental Property Rebate and the Accelerated Capital Cost Allowance for Purpose-Built Rental Housing, as included in Budget 2024.

This exemption is available for taxation years that begin on or after October 1, 2023 (i.e., as at the effective date of the EIFEL rules).

Non-Compliance With Information Request

Notice of Non-Compliance

Finance asserts that limits to the CRA’s audit powers impede the effectiveness of the CRA’s compliance and enforcement actions. Accordingly, Budget 2024 proposes amendments to allow the CRA to issue a “notice of non-compliance” where a person has failed to comply with a CRA request or requirement to provide information or documents. The notice of non-compliance would be accompanied by a penalty of $50 for each day it remains outstanding (to a maximum of $25,000) but would be subject to review by the CRA and the Federal Court.

Questioning Under Oath

Budget 2024 proposes to amend the Tax Act to allow the CRA to require that any requested information or documents, or answers to questions, be provided under oath or affirmation, or by affidavit.

Compliance Orders

Finance perceives the use of compliance orders, requiring by order of the Federal Court the provision of information or documents after a failed request for information, as ineffective because, in its view, there is generally no material cost to the non-compliant taxpayer. In response, Budget 2024 proposes to introduce a new penalty that would apply when the CRA obtains a compliance order. The amount of the penalty would be equal to 10% of the aggregate tax payable by the taxpayer in respect of the taxation years to which the compliance order relates if the amount of such tax owing exceeds $50,000.

Budget 2024 also proposes to expand these rules so that they also apply in respect of requirements to provide foreign-based information or documents.

Stopping the Reassessment Limitation Clock

The “stop the clock” rules generally extend the reassessment period, pending disposition of a judicial review of a requirement, notice or compliance order. However, these rules currently do not apply to all situations where a taxpayer does not comply with a requirement or notice issued by the CRA. Accordingly, Budget 2024 proposes to amend the “stop the clock” rules to provide that they consistently apply whenever a taxpayer (or a person not dealing at arm’s length with the taxpayer) seeks a judicial review of any requirement or notice issued to the taxpayer by the CRA in relation to the audit and enforcement process or during any period that a notice of non-compliance is outstanding.

Avoidance of Tax Debts

The Tax Act includes a rule to prevent taxpayers from avoiding payment of their tax liabilities by transferring assets to non-arm’s-length persons for proceeds less than fair market value. New anti-avoidance rules targeting planning designed to circumvent that rule were enacted in 2022, along with a new penalty aimed at planners and promoters of tax debt avoidance schemes. Budget 2024 proposes to introduce supplementary rules to strengthen the existing rules where non-arm’s-length transfers of property have been undertaken for the purpose of avoiding joint and several, or solidary, liability for the tax debtor’s tax liability.

Reportable and Notifiable Transactions Penalty

Budget 2024 proposes to remove the general penalty provision for the failure to file or make a information return, or comply with certain specified rules from the scope of the recently enacted reportable transaction rules and notifiable transaction rules (effective from June 22, 2023) which include specific penalties that render the general penalty provision unnecessary. This amendment would have retroactive effect to June 22, 2023.

Mutual Fund Corporations

Several conditions must be met to qualify as a mutual fund corporation under the Tax Act, including that the corporation be a “public corporation,” implying that it is widely held. However, provided that a class of shares of the corporation is listed on a designated stock exchange, a corporation may satisfy the “public corporation” condition and qualify as a mutual fund corporation where the remaining classes of shares are held within the corporate group and those shares represent all or substantially all of the fair market value of the corporation. In this manner, a corporate group can access the special rules available to mutual fund corporations in an unintended way.

Budget 2024 proposes to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (including a corporate group comprised of any combination of corporations, individuals, trusts and partnerships that do not deal with each other at arm’s length). There will be exceptions aimed at ensuring that this measure does not adversely impact mutual fund corporations that are widely held pooled investment vehicles.

This amendment would apply to taxation years that begin after 2024.

Synthetic Equity Arrangements

Budget 2024 proposes to remove the tax-indifferent investor exception and the exchange traded exception from the anti-avoidance rule that denies the inter-corporate dividend deduction for dividends received on or after January 1, 2025, on shares subject to a synthetic equity arrangement.

Debt Forgiveness Rules Will Apply to Bankrupt Corporations

The debt forgiveness rules in the Tax Act which apply to commercial debt that is settled for less than its principal amount currently do not apply to a debtor that is a bankrupt at the time of settlement. Instead, a separate loss restriction rule applies to extinguish the losses of a bankrupt corporation that has received an absolute order of discharge. Some taxpayers have sought to qualify as a bankrupt corporation with a view to benefiting from this exception while also avoiding the loss restriction rule applicable to bankrupt corporations.

Budget 2024 proposes to eliminate this planning by repealing the exception for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations. This change would subject such corporations to the rules that apply to all other corporations whose commercial debts are forgiven. The bankruptcy exception would remain in place for individuals. While bankrupt corporations would be subject to the normal rules, as insolvent corporations they may qualify for relief from any residual income inclusion provided under the existing deduction for insolvent corporations.

These proposals apply to bankruptcy proceedings that are commenced on or after Budget Day.

Clean Electricity Investment Tax Credit

Announced in Budget 2023, the Clean Electricity investment tax credit is a 15% refundable investment tax credit available to “eligible entities” in respect of the capital cost of “eligible property” incurred in projects that generate, store or transmit clean electricity while complying with certain proposed labour requirements currently before Parliament under Bill C-59. Budget 2024 provides design and implementation details of the tax credit, elaborating on the conditions for the qualification as an eligible entity and eligible property.

This investment tax credit would generally apply to eligible property acquired and available for use on or after Budget Day and before 2035, provided that it has not been used for any purpose prior to acquisition and is not otherwise part of a project that began construction prior to March 28, 2023.

Polymetallic Extraction and Processing

Budget 2024 proposes to expand eligible activities that qualify for the Clean Technology Manufacturing investment tax credit, as announced in Budget 2023, from qualifying mineral activities producing all or substantially all (e.g., 90% or more of the financial value of the output) qualifying materials to qualifying mineral activities that are expected to produce primarily (e.g., 50% or more of the financial value of the output) qualifying materials at mines or well sites.

The changes would apply for property acquired and available for use on or after January 1, 2024.

Accelerated Capital Cost Allowance

Purpose-Built Rental Housing

Budget 2024 proposes to accelerate capital cost allowance (“CCA”) for purpose-built rental buildings from the current rate of 4% to 10% for projects that begin construction on or after Budget Day and before January 1, 2031, and available for use before January 1, 2036.

To be eligible, the property must be a rental housing complex with at least four private apartment units, or 10 private rooms or suites, and in which at least 90% of residential units are held for long-term rental, and may include conversions of existing non-residential real estate into a rental housing complex.

Eligible properties would continue to benefit from the Accelerated Investment Incentive (which suspends the half-year rule for properties put to use before 2028).

Productivity-Enhancing Assets

Budget 2024 proposes to provide immediate expensing for new additions of property in respect of Class 44 assets (patents or the right to use patented information for a limited or unlimited period), Class 46 assets (data network infrastructure equipment and related systems software) and Class 50 assets (general-purpose electronic data-processing equipment and systems software), all subject to certain restrictions related to non-arm’s-length transactions. The current prescribed rates for these CCA classes are 25%, 30% and 55%, respectively.

Property that becomes available for use after 2026 and before 2028 would continue to benefit from the Accelerated Investment Incentive.

Canada Carbon Rebate for Small Businesses

Budget 2024 proposes the new Canada Carbon Rebate for Small Businesses, designed to return a portion of pollution pricing fuel charge proceeds from a province to eligible businesses.

For the 2019-2020 to 2023-2024 fuel charge years, the new tax credit would be available to a Canadian-controlled private corporation (a “CCPC”) that files its 2023 tax return by July 15, 2024. To be eligible for a particular fuel charge year, the corporation must have no more than 499 employees throughout Canada in the calendar year in which the fuel charge year begins. No application needs to be filed; the CRA will automatically determine the tax credit amount for eligible corporations.

INTERNATIONAL INCOME TAX MEASURES

Crypto-Asset Reporting Framework and the Common Reporting Standard

Crypto-Asset Reporting Framework

Crypto-assets (including stablecoins, derivatives issued in the form of a crypto-asset, and certain NFTs) can be transferred or held without interacting with traditional financial intermediaries and escape the reporting obligations imposed on financial institutions under the Common Reporting Standard (“CRS”). To ensure appropriate reporting, the OECD has developed a new framework (the Crypto-Asset Reporting Framework, or “CARF”) that provides for the automatic exchange of tax information in relation to transactions in crypto-assets.

Budget 2024 proposes to implement the CARF by imposing an annual reporting requirement on Canadian resident entities and individuals, or those that carry on business in Canada, and that provide business services effectuating exchange transactions in crypto-assets (excluding central bank digital currencies and specified electronic money products, which are reportable under separate amendments to the CRS) (each a “CASP”).

CASPs would be required to report to the CRA, in respect of each customer and in respect of each crypto-asset, the annual value of exchanges between crypto-assets and fiat currencies, exchanges for other crypto-assets, and transfers of crypto-assets (including where a CASP processes payments on behalf of a merchant in transactions with a value in excess of US$50,000).

CASPs will also be required to obtain and report information on each of their customers, including name, address, date of birth, jurisdiction(s) of residence and taxpayer identification numbers. If a customer is a corporation or other legal entity, the same information would need to be collected and reported in respect of the natural persons who exercise control over the entity.

Common Reporting Standard

Budget 2024 also proposes to broaden the scope of the CRS to include specified electronic money products and central bank digital currencies not covered by the CARF. Additional information reporting will be required for financial accounts and account holders.

Budget 2024 also proposes two additional changes to the CRS:

• Remove Labour-Sponsored Venture Capital Corporations (“LSVCCs”) from the list of non-reporting financial institutions and treat a non-registered account held in an LSVCC as an excluded account provided that annual contributions to the account do not exceed US$50,000.
• Amend the anti-avoidance provision of the CRS to clarify that it applies when a person enters into an arrangement or engages in a practice, if it can reasonably be considered that the primary purpose is to avoid an obligation of any person under the CRS.

These measures would apply to the 2026 and subsequent calendar years with the first exchange of information expected to take place in 2027.

Withholding for Non-Resident Service Providers

Any person who pays a non-resident for services rendered in Canada is required to withhold and remit 15% of the payment to the CRA. This represents a prepayment of tax on behalf of the non-resident. However, many such non-residents do not ultimately owe Canadian tax either because they are exempt from tax on the income under an applicable tax treaty, or the income is exempt income domestically.

Eligible non-resident service providers may apply to the CRA for an advance waiver of the withholding for a specific planned transaction or seek a refund of overpaid tax by filing an income tax return. Finance believes many non-residents forego the waiver or refund process and pass the cost of the withholding tax to the payors (e.g., by way of a gross-up). Budget 2024 proposes to expand the waiver regime by giving the CRA the ability to waive withholding on multiple transactions with a single waiver if, inter alia, the non-resident is not subject to tax in Canada in respect of the payments pursuant to the terms of an applicable income tax treaty, or the income is exempt income from international shipping or from operating an aircraft in international traffic.

This measure would come into force on royal assent of the enacting legislation.

PERSONAL INCOME TAX MEASURES

Lifetime Capital Gains Exemption

The LCGE in 2024 is $1,016,836. Budget 2024 proposes to increase the LCGE to $1,250,000. The increased LCGE would apply to disposition of qualified small business corporation shares and qualified farm or fishing property that occur on or after June 25, 2024, with indexation of the LCGE resuming in 2026.

Canadian Entrepreneurs’ Incentive

Budget 2024 announces the CEI. The CEI would provide for a 50% reduction of the prevailing inclusion rate for capital gains realized on the disposition of qualifying shares by an individual, reducing a two-thirds inclusion rate to one-third and reducing a 50% inclusion rate to 25% on qualifying dispositions.

Lifetime Limit

An individual can claim the LCGE and CEI on qualifying dispositions. However, unlike the LCGE, which is indexed to inflation, the CEI is limited to $2 million of capital gains realized by an individual over their lifetime. The CEI would be phased in over a 10-year period by increments of $200,000 per year starting in 2025.

Qualifying Conditions

A share will be a “qualifying share” if, in addition to meeting the conditions for the LCGE:

• The claimant was a founding investor at the time the corporation was initially capitalized and held the shares for a minimum of five years prior to the disposition.
• At all relevant times, the claimant directly owned shares representing more than 10% of the votes and the fair market value of the corporation.
• For five years prior to the disposition, the claimant must have been actively engaged on a regular, continuous and substantial basis in the business.
• The share does not represent a direct or indirect interest in a professional corporation, a corporation whose principal asset is the reputation or skill of one or more employees, or a corporation that carries on certain types of business, including operating in the financial, insurance, real estate, food and accommodation, arts, recreation or entertainment sector, or providing consulting or personal care services.
• The share must have been obtained for fair market value consideration.

The CEI would apply to dispositions that occur on or after January 1, 2025.

Alternative Minimum Tax

Following on the significant amendments to the Alternative Minimum Tax (“AMT”) proposed in Budget 2023, Budget 2024 has proposed the following further amendments:

• Individuals may claim 80% (instead of the previously proposed 50% under Budget 2023) of the Charitable Donation Tax Credit when calculating the AMT.
• Fully deduct the Guaranteed Income Supplement, social assistance and workers’ compensation payments in computing the AMT base.
• Allow certain disallowed credits under the AMT to be eligible for the AMT carry-forward.
• Fully exempt EOTs and certain trusts established for the benefit of Indigenous groups from the AMT.

Budget 2024 invites comments on the proposed exemptions for Indigenous settlement and community trusts.

Employee Ownership Trust Tax Exemption

Budget 2024 provides further details of the previously announced proposal to introduce a $10-million capital gains exemption on the sale of qualifying shares by an individual to an EOT that occurs between January 1, 2024, and December 31, 2026.

Qualifying Conditions

The $10-million exemption would be available to an individual where the following conditions are met:

• The individual, a personal trust of which the individual is a beneficiary, or a partnership in which the individual is a member, disposes of shares of a corporation that is not a professional corporation.
• The transaction is a “qualifying business transfer” in which the trust acquiring the shares is not already an EOT or a similar trust with employee beneficiaries.
• Throughout the 24 months before the “qualifying business transfer,” the shares were exclusively owned by the individual claiming the exemption, a related person or a partnership in which the individual is a member; and 50% or more of the fair market value of the corporation’s assets were used principally in an active business.
• For at least 24 months before the “qualifying business transfer,” the individual or the individual’s spouse or common-law partner has been actively engaged in the business on a regular and continuous basis.
• Immediately before the “qualifying business transfer,” at least 90% of the beneficiaries of the EOT must be resident in Canada.

The $10-million exemption is not per individual. Multiple individuals disposing of shares of a qualifying business are required to allocate the $10-million exemption amongst themselves.

Disqualifying Events

The exemption will not be available if a disqualifying event occurs within 36 months of the “qualifying business transfer” and will be retroactively denied where already claimed. As a result, Budget 2024 proposes to extend the normal reassessment period by three years for individuals who claim the exemption.

A disqualifying event would occur if: (i) the trust ceases to qualify as an EOT, or (ii) the fair market value of shares held by the EOT as at the beginning of two consecutive taxation years of the corporation cease to be attributable primarily (e.g., 50% or more) to assets used in an active business.

If a disqualifying event occurs more than 36 months after a qualifying business transfer, the EOT would be deemed to realize a capital gain equal to the total amount of exempt capital gains and the EOT would be solely liable for the tax realized on the deemed capital gain.

Additional Considerations

Thirty per cent of the capital gains sheltered by the exemption would be included in the AMT calculation. Budget 2024 also proposes to expand qualifying business transfers to include the sale of shares to a workers co-operative corporation.

Charities and Qualified Donees

Generally, Canadians cannot claim a tax credit for donations to foreign charities. There is an exception whereby a foreign charity can obtain temporary status as a “qualified donee” for 24 months. Budget 2024 proposes to extend the temporary period from 24 months to 36 months. A foreign charity granted this status would be required to submit an annual information return to the CRA, which would be made publicly available.

Budget 2024 proposes to modernize how the CRA provides services and communicates information to charities and other qualified donees, primarily by using electronic communication, and a number of changes to simplify the issuance of official donation receipts.

Home Buyers’ Plan

Budget 2024 proposes to increase the RRSP withdrawal limit under the Home Buyers’ Plan from $35,000 to $60,000. For first withdrawals made between January 1, 2022, and December 31, 2025, Budget 2024 also proposes to temporarily defer the start of the 15-year repayment period from two years to five years following the year in which such withdrawal was made.

Qualified Investments for Registered Plans

Registered plans must limit investments to “qualified investments.” Budget 2024 invites stakeholders to submit comments by July 15, 2024, on how the qualified investment rules for registered plans can be modernized to improve the clarity and coherence of the regime.

Deduction for Tradespeople’s Travel Expenses

Budget 2024 announces that the government will consider amendments to the Tax Act to provide a single, harmonized deduction for tradespeople’s eligible travel and relocation expenses in the construction industry, which may also revisit the current $4,000 limitation on eligible expenses.

Indigenous Child and Family Services Settlement

Budget 2024 proposes to exclude from taxation the income of the trusts established under the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement. The payments received by class members as beneficiaries of these trusts would also be excluded from taxation. This measure would apply to the 2024 and subsequent taxation years.

GST/HST, EXCISE AND OTHER TAX MEASURES

GST/HST Measures

Budget 2024 proposes two new changes to the Excise Tax Act (Canada) (“ETA”):

Extending Enhanced GST Rental Rebate Relief to Not-For-Profit Education Institutions

Budget 2024 proposes to extend the Enhanced (100%) GST Rental Rebate for the construction of new purpose-built rental buildings (i.e., apartments), that is available to developers/builders, to not-for-profit educational institutions (i.e., universities, public colleges and school authorities). The proposed measure applies to student residences that begin construction after September 13, 2023, and before 2031, and that complete construction before 2036.

Moreover, Budget 2024 proposes relaxed rebate conditions for these same not-for-profit institutions, which would allow these entities to claim the Enhanced GST Rental Rebate in respect of any new student residence that they acquire or construct, provided it is primarily for the purpose of providing a place of residence for their students. That is, it would no longer be necessary that the first use of a unit in the student housing project be as a primary place of residence of an individual under a lease for a period of at least 12 months.

GST/HST Exigible on Face Masks and Face Shields

Budget 2024 proposes to repeal the zero-rating of face masks and face shields. Accordingly, effective on or after May 1, 2024, the supply of same will be subject to GST/HST.

Excise Measures

Budget 2024 proposes the following changes to the Excise Act, 2001:

• Excise duty rate increases for various tobacco products and vaping products (for vaping products, the proposed rates differ depending on whether the supply is in a participating jurisdiction or non-participating jurisdiction);
• Inventory tax on certain suppliers of tobacco tax;
• Changes to the prescribed limit on packaged raw leaf tobacco for importation for personal use; and
• Amendments to allow for the sharing of confidential information under the Excise Act, 2001 between the CRA and Health Canada.

Other Tax Measures

Amendments to the First Nations Fuel, Alcohol, Cannabis and Tobacco Sales Tax Framework (“FACT”)

The First Nations Goods and Services Tax Act (“FNGSTA”) provides a legislative framework under which interested Indigenous governments may elect to levy their own broad-based value added tax (referred to as FNGST) that is fully harmonized with the GST or federal component of HST. Budget 2024 proposes to amend the FNGSTA to allow increased flexibility to Indigenous governments, enabling them to enact a value-added sales tax, under their own laws, on FACT products within their reserve or settlement lands. Indigenous governments may elect which FACT product to tax, under a separate FACT sales tax. Products subject to the 5% FACT sales tax are not subject to the GST or the federal component of the HST (5%).

PREVIOUSLY ANNOUNCED MEASURES

Budget 2024 confirms the government’s intention to proceed with the following previously announced tax measures (among other measures), as modified to take into account consultations, deliberations, and legislative developments, since their release:

• Proposals relating to the GST/HST joint venture election rules;
• The application of the enhanced (100%) GST Rental Rebate to qualifying co-operative housing corporations;
• Proposals relating to the Underused Housing Tax;
• Legislative and regulatory amendments to implement the enhanced (100%) GST Rental Rebate for purpose-built rental housing announced on September 14, 2023;
• Employee Ownership Trusts;
• Retirement Compensation Arrangements;
• Strengthening the Intergenerational Business Transfer Framework;
• The Alternative Minimum Tax for High-Income Individuals;
• A Tax on Repurchases of Equity;
• Modernizing the General Anti-Avoidance Rule;
• Global Minimum Tax (Pillar Two);
• Digital Services Tax;
• Technical amendments to GST/HST rules for financial institutions;
• Providing relief in relation to the GST/HST treatment of payment card clearing services;
• Excessive Interest and Financing Expenses Limitations;
• Extending the quarterly duty remittance option to all licensed cannabis producers;
• Revised Luxury Tax draft regulations to provide greater clarity on the tax treatment of luxury items;
• Technical tax amendments to the Income Tax Act and the Income Tax Regulations;
• Legislative amendments to implement changes discussed in the transfer pricing consultation paper released on June 6, 2023;
• Tax measures announced in Budget 2023, including the Dividend Received Deduction by Financial Institutions;
• Legislative proposals released on August 9, 2022, including with respect to Substantive Canadian-Controlled Private Corporations;
• Legislative amendments to implement the Hybrid Mismatch Arrangements rules announced in Budget 2021; and
• Regulatory proposals released in Budget 2021 related to information requirements to support input tax credit claims under the GST/HST.

If you have any questions about Budget 2024, please contact any member of our Tax Group.