Today, the Department of Finance is releasing for consultation, draft legislative proposals to implement a range of previously announced tax measures, as well as other technical amendments to Canada's tax system.
The Government of Canada is committed to maintaining a tax system that is fair, effective, and competitive. The proposed changes aim to clarify and improve tax rules, close gaps to prevent tax avoidance, and ensure existing measures work as intended.
They would also promote investment, productivity, and clean growth, while making the tax system easier to administer and understand. Together, these measures support the government's broader efforts to build a stronger, more competitive Canadian economy.
The government invites stakeholders to provide feedback on these draft legislative proposals to ensure they are effective, fair, and aligned with policy objectives.
The proposed tax measures include:
- Amendments to the Disability Tax Credit (DTC) to streamline the application process for individuals with certain long-lasting medical conditions and expand the list of medical practitioners who can certify eligibility for the DTC.
- Amendments to confirm the taxable status of the Red Seal Completion Bonus, which would increase apprenticeship completion rates by providing a one-time $5,000 bonus to apprentices obtaining certification in a Red Seal trade.
- Amendments to the Investment Tax Credit for Carbon Capture, Utilization, and Storage (CCUS) so that the storage of CO2 through enhanced oil recovery be made eligible for the purposes of the CCUS investment tax credit, at half the credit rates available for dedicated geological storage.
- Amendments to reinstate the accelerated capital cost allowances for eligible liquefied natural gas (LNG) equipment and related buildings for low-carbon LNG facilities.
- Amendments to ensure that the investment income of a foreign affiliate on assets backing Canadian insurance risk be considered foreign accrual property income and therefore subject to taxation in Canada.
- Amendments to allow for simplified transfer pricing documentation in four scenarios involving: small taxpayers and partnerships, small transfers of tangible property, small intragroup services transactions, and small loans.
- A second package of amendments to address hybrid mismatch arrangements, implementing recommendations of the report under Action 2 of the OECD/G20 Base Erosion and Profit Shifting project, titled Neutralising the Effects of Hybrid Mismatch Arrangements.
- Amendments to establish a Goods and Services Tax/Harmonized Sales Tax (GST/HST) reverse charge mechanism for certain supplies in the telecommunications sector to help prevent carousel fraud and improve the overall fairness of the Canadian tax system.
- Amendments to the Agriculture and Fishing Property (GST/HST) Regulations to add agricultural quotas supplied by lease, licence or similar arrangement as prescribed property that is zero-rated under the GST/HST.
- Amendments to the Federal Book Rebate (GST/HST) Regulations to permit Wonderful World of Books, a registered charity operating in British Columbia, to claim the federal printed book rebate for GST paid on printed books and certain audio recordings in the course of promoting literacy.
- Other technical amendments to tax statutes and related regulations such as the Income Tax Act, the Excise Tax Act, the Income Tax Regulations and the Global Minimum Tax Act to ensure Canada's tax laws align with their underlying policy objectives.
Details on all the above draft legislative proposals can be found under Related documents below.
