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Representing the tax and accounting intelligence of specialists from Dentons, Minden Gross, PwC, Thorsteinssons, and Wolters Kluwer, no other single reference is better qualified to keep you fully informed. Canadian Income Tax Act with Regulations, provides valuable cross-references, comprehensive editorial notes, and a breadth of related third-party references, all selected by experienced tax specialists.
The Full Text of the Income Tax Act and Regulations
Since the Income War Tax Act first came into force over a century ago, the size and complexity of the legislation have grown exponentially. Over the past months, numerous new amendments and proposals continued this trend. Canadian Income Tax Act with Regulations, Annotated contains all of the latest legislative developments since the Autumn Edition, including:
Federal Budget 2022
Many new tax measures were announced in Federal Budget 2022. The legislation for these changes is included throughout this edition. These measures include the following:
Tax-Free First Home Savings Account
Home Buyers’ Tax Credit
Multigenerational Home Renovation Tax Credit
Home Accessibility Tax Credit
Residential Property Flipping Rule
Labour Mobility Deduction for Tradespeople
Medical Expense Tax Credit for Surrogacy and Other Expenses
Annual Disbursement Quota for Registered Charities
Amendments to the Children’s Special Allowances Act and to the Income Tax Act
Borrowing by Defined Benefit Pension Plans
Reporting Requirements for RRSPs and RRIFs
Canada Recovery Dividend and Additional Tax on Banks and Life Insurers
Investment Tax Credit for Carbon Capture, Utilization, and Storage
Clean Technology Tax Incentives – Air-Source Heat Pumps
Critical Mineral Exploration Tax Credit
Flow-Through Shares for Oil, Gas, and Coal Activities
Small Business Deduction
International Financial Reporting Standards for Insurance Contracts (IFRS 17)
Hedging and Short Selling by Canadian Financial Institutions
Application of the General Anti-Avoidance Rule to Tax Attributes
Exchange of Tax Information on Digital Economy Platform Sellers
Interest Coupon Stripping
SOR/2022-42, Regulations Amending the Income Tax Regulations (Enhanced CPP Contributions)
S. 100(3) of the Income Tax Regulations were amended to update the calculations outlined in the Regulations to correspond with tax deductions under the ITA that came into force in 2019. This ensures that the amount of the employee’s additional CPP and/or QPP contributions are correctly taken into account by the employer when calculating the individual’s base income for purposes of deducting or withholding income taxes.
Legislative Proposals Relating to the Select Luxury Items Tax Act (March 11, 2022)
These draft legislative proposals, which contain consequential amendments to the Income Tax Act, would implement the tax on the sale of new luxury cars, boats, and aircraft first introduced in Budget 2021.
SOR/2022-11, Regulations Amending the Income Tax Regulations (COVID-19 — Twenty-Fourth and Twenty-Fifth Qualifying Periods)
Effective February 1, 2022, SOR/2022-11 amends s. 8901.2 to allow businesses subject to capacity-limiting public health orders in the Omicron wave of the COVID-19 pandemic to access the LLP, and to support a broader set of businesses that are impacted.
Legislative Proposals Relating to Income Tax Act and Other Legislation (February 4, 2022)
The Department of Finance released new legislative proposals that include the following previously-announced measures:
Allow for the immediate expensing of up to $1.5 million of eligible investments by Canadian-controlled private corporations, sole proprietors and certain partnerships to help businesses invest in new technologies and move forward with capital projects;
Reduce—by 50 per cent—the general corporate and small business income tax rates for businesses that manufacture zero-emission technologies;
Expand access to the accelerated capital cost allowance for certain clean energy equipment and implement certain restrictions;
Improve access to the Disability Tax Credit;
Include postdoctoral fellowship income in “earned income” for Registered Retirement Savings Plan (RRSP) purposes;
Enhance Canada’s income tax mandatory disclosure rules;
Increase flexibility for plan administrators of defined contribution pension plans to correct for both under-contributions and over-contributions;
Improve the fairness of certain taxes applicable to Registered Investments;
Improve administration of, and compliance with, electronic filing and certification of tax and information returns;
Temporarily extend certain timelines for the Canadian Film or Video Production Tax Credit (CPTC) and the Film or Video Production Services Tax Credit (PSTC);
Combat the avoidance of tax debts through complex transactions that attempt to circumvent the tax debt collection avoidance rule;
Ensure that the Canada Revenue Agency (CRA) has the authority it needs to conduct audits and undertake other compliance activities;
Limit the amount of interest and other financing expenses that businesses may deduct for income tax purposes based on a proportion of earnings;
SOR/2021-240, Regulations Amending the Income Tax Regulations (COVID-19 — Twenty-Second Qualifying Period)
Amends Regulation 8901.2 to move the COVID-19 subsidy programs from a broad-based support structure to more targeted measures, and to enhance the subsidy under the Canada Hiring Recovery Program.
Bill C-2, An Act to provide further support in response to COVID-19 (S.C. 2021, c. 26)
Bill C-2 was first introduced on November 24, 2021, and received Royal Assent on December 17, 2021. Part 1 of the Bill amends the Income Tax Act and Regulations to extend subsidies under the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy (CERS), and the Canada Recovery Hiring Program until May 7, 2022, as part of the response to the COVID-19 pandemic. Part 1 also allows the government to extend the subsidies by regulation but no later than July 2, 2022.
Bill C-8, Economic and Fiscal Update Implementation Act, 2021 (December 15, 2021)
Bill C-8 proposes to implement the Small Businesses Air Quality Improvement Tax Credit and the Farmers Fuel Charge Refundable Tax Credit, expand the Eligible Educator School Supply Tax Credit, and amend the Northern Residents Deduction.
Legislative Proposals Relating to the Income Tax Act (December 3, 2021)
This legislation proposes to modify how the refundable Climate Action Incentive tax credit would be delivered to individuals. Currently, it is claimed by filing a tax return. However, under the proposals, the credit would be paid directly to individuals on a quarterly basis, beginning July 2022.
Bill S-212, An Act to amend the Criminal Records Act, to make consequential amendments to other Acts and to repeal a regulation (November 24, 2021) (Private Member’s Bill)
Bill S-212 (previously issued as Bill S-208, September 30, 2020) is a Private Member’s Bill which makes a consequential amendment to s. (a)(ii) of the definition “ineligible individual” in s. 149.1(1) of the Income Tax Act.
Bill S-216, Effective and Accountable Charities Act (November 24, 2021) (Private Member’s Bill)
Bill S-216 (previously issued as Bill S-222, February 8, 2021) is a Private Member’s Bill, which proposes amendments to the Income Tax Act to permit charities to provide their resources to a person who is not a qualified donee, provided that they take reasonable steps to ensure those resources are used exclusively for a charitable purpose.
SOR/2021-206, Regulations Amending the Income Tax Regulations (COVID-19—Prior Reference Periods for Wage Subsidy, Rent Subsidy and Hiring Program and Subsidies Extension)
Effective August 12, 2021, section 8901.2 of the Income Tax Regulations has been amended to make the calculation of revenue decline more flexible for businesses that were not carrying on their business or ordinary activities on March 1, 2019. The CEWS, CERS, and Lockdown Support are also extended by one period, and the maximum subsidy rates for both programs for the 20th qualifying period (August 29, 2021, to September 25, 2021) have been increased.
SOR/2021-82, Regulations Amending the Income Tax Regulations (Non-application of Presumption – Declaration of Female Parent)
Effective July 1, 2021, SOR/2021-82 amends s. 6301(1)(a) of the Income Tax Regulations to allow a female parent to waive the CCB in right of a gender-neutral parent.
Editorial notes with explanations, tips, and traps
The Multilateral Instrument, which modifies the terms of tax treaties between Canada and agreeing countries
Full text of the Canada-U.S. Tax Treaty, with detailed editorial notes by Dentons Canada LLP
Full text of the Canada-U.K. Tax Treaty
Key references to additional resources, including:
Cross references to related sections of the Act and Regulations
Income tax folios, bulletins, circulars, technical interpretations, forms, guides, comfort letters, and news releases
Canadian Tax Foundation, STEP Canada, and Wolters Kluwer newsletter articles
Case annotations summarizing key court decisions
Numerous quick reference charts, including:
2022 and 2021 tax rates and credits tables from PricewaterhouseCoopers LLP
Tables of automobile, mileage, interest, exchange, and capital cost allowance rates
Tax integration tables from PricewaterhouseCoopers LLP
Summary tables of deadlines, offences, and penalties, and a tax calendar
Editorial Board — As of April 2022
Trust the tax and accounting intelligence from the top firms in Canada:
Joseph Frankovic LL.B., LL.M., Ph.D., CFA
Member of the Ontario Bar and the adjunct faculty of Osgoode Hall Law School
Dentons Canada LLP
Paige Donnelly J.D., MBA, CFA
Mark Jadd LL.B.
Earl I. Miller LL.B.
Larry Nevsky LL.B., CPA, CA
Tony Schweitzer LL.B., LL.M.
Yves St-Cyr LL.L.
Mark Woltersdorf LL.B., FCPA, FCA
Jacob Yau J.D.
Minden Gross LLP
Matthew Getzler J.D., MBA
Michael Goldberg B. Comm. Hons., LL.B.
Joan Jung LL.B.
Samantha Prasad B.A., LL.B.
Catherine Hibbard CPA, CA
Ruby Lim CPA, CA
Colin Mowatt CPA, CA
Michael Colborne LL.B., LL.M.
Michael McLaren B.Sc., LL.B.
Wolters Kluwer Canada Limited
Robert Boucher CPA, CA
Jennifer Corris B.Math
Mark Ho CPA (Australia)
Harry Hoogkamp CPA, CMA, CBV
Cameron Mancell CFP®
Roderick McBey GJM, BA, LL.B., TEP
Robert Spenceley M.A., LL.B.
Peter Tomlinson B.A., LL.B.