Canada’s Bill C-69, Budget Implementation Act, 2024, No. 1, was presented to the House of Commons of Canada’s Parliament on Thursday, 2 May, 2024.
Bill C-69 enacts the provisions outlined in the Notice of Ways and Means Motion (NWMM) presented on 30 April, 2024. This includes specific tax initiatives introduced in the 2024 federal budget and the 2023 autumn economic statement.
Additionally, it incorporates several tax measures including the implementation of the Pillar 2 Global Minimum Tax Act (GMTA) in Canada, which was detailed in draft legislation published on 20 December, 2023, and 4 August, 2023.
The bill also introduces technical modifications to the investment tax credit (ITC) for carbon capture, utilisation, and storage, as well as the clean technology ITC. However, it excludes the proposed changes to the capital gains inclusion rate that were outlined in the 2024 federal budget.
Some other notable tax measures from the 2024 federal budget include:
Carbon rebates for small businesses
A new refundable tax credit has been introduced that reimburses a portion of fuel charges proceeding to qualifying businesses.
Mandatory disclosure rules
Failure to submit an information return for a reportable or notifiable transaction will no longer be penalised under section 238 of the Income Tax Act, effective from 22 June, 2023.
Pillar Two Global Minimum Tax (GMTA)
Canada enacted the global minimum tax under Pillar Two of the Organisation for Economic Co-operation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) Inclusive Framework, which was agreed on 8 October, 2021.
This includes the introduction of the Pillar two income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to ensure a minimum corporate tax of 15% for large multinational (MNE) groups with annual consolidated revenue of at least EUR 750 million in at least two of the preceding four fiscal years.
Alternative Minimum Tax (AMT)
The legislative proposals released on 4 August, 2023, introduce additional modifications to the alternative minimum tax (AMT) calculation.
Other amendments
Technical amendments have been proposed to the following:
- The Eligible Dividend System, including the definition of “eligible refundable dividend tax on hand” as outlined in subsection 129(4) of the Act.
- The employee stock options regulations, particularly in situations where non-arm’s-length relationships exist between mutual fund trusts and corporations.
- The introduction of a new exemption from the taxable treatment of exchanges of mutual fund corporation switch fund shares.
Technical amendments have also been made concerning:
- medical expense tax credit,
- multigenerational home renovation tax credit,
- qualifying trust annuity,
- shareholder benefits,
- RRSP refunds of premiums,
- transfers between RRSPs or registered retirement income funds (RRIFs),
- interest rate hedging arrangements, etc.
