Budget Implementation Act, 2023, No. 1 (S.C. 2023, c. 26)

• Published date: 27 October 2023
• Date: 22 June 2023
• Gazette Issue: 1 - [object Object]
• Section: Part III - Acts of Parliament

S.C. 2023, c. 26

Assented to 2023-06-22

An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023

RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023”.

SUMMARY

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by

• (a) enabling the Canada Revenue Agency (CRA) to use electronic certification of tax and information returns and requiring taxpayers to file electronically in certain circumstances;

• (b) doubling the maximum deduction for tradespeople’s tools from $500 to $1,000;

• (c) providing that any gain on the disposition of a right to acquire Canadian housing property within a one-year period of its acquisition is treated as business income;

• (d) excluding from a taxpayer’s income certain benefits for Canadian Forces members, veterans and their spouses or common-law partners;

• (e) exempting from taxation any income earned by the Band Class Settlement Trust in accordance with section 24.05 of the Settlement Agreement entered into on January 18, 2023 relating to the attendance of day scholars at residential schools;

• (f) providing an additional payment of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit equal to double the amount of the regular January 2023 payment;

• (g) providing for automatic, quarterly advance payments of the Canada Workers Benefit;

• (h) allowing divorced and separated spouses to open joint Registered Educational Savings Plans and increasing educational assistance amounts under those plans;

• (i) extending, by ‚three years, the ability of a qualifying family member to be the plan holder of an individual’s Registered Disability Savings Plan and expanding the definition of “qualifying family member” to include a sister or a brother of the individual;

• (j) allowing defined contribution registered pension plans to correct contribution errors and requiring that the contributions or refunds are reported to the CRA for the purpose of correcting the RRSP deduction limit;

• (k) modifying reporting requirements in respect of reportable transactions, introducing reporting requirements for notifiable transactions and providing reporting requirements with respect to uncertain tax treatments, as well as extending the reassessment periods applicable to those transactions and creating or modifying penalties for non-compliance with those requirements;

• (l) allowing the CRA to share taxpayer information for the purposes of the Canadian Dental Care Plan;

• (m) expanding the definition of “dividend rental arrangement” to include “specified hedging transactions” carried out in whole or in part by registered securities dealers;

• (n) implementing the Model Reporting Rules for Digital Platforms developed by the Organisation for Economic Co-operation and Development;

• (o) requiring annual reporting by financial institutions of the fair market value of registered retirement savings plans and registered retirement income funds;

• (p) expanding the permissible borrowing by defined benefit pension plans; and

• (q) implementing a number of technical amendments to correct mistakes or inconsistencies and to better align the law with its intended policy objectives.

It also makes related and consequential amendments to the Excise Tax Act, the Tax Rebate Discounting Act, the Air Travellers Security Charge Act, the Excise Act, 2001, Part 1 of the Greenhouse Gas Pollution Pricing Act and the Electronic Filing and Provision of Information (GST/HST) Regulations.

Part 2 implements certain measures in respect of the Excise Tax Act and a related text by

• (a) clarifying that the international transportation of money benefits from Goods and Services Tax/Harmonized Sales Tax (GST/HST) relief and other special rules in the same manner as a service of internationally transporting other kinds of freight;

• (b) permitting a pension entity, in specific circumstances, to claim the pension entity rebate or an input tax credit, or to make the pension entity rebate election, after the end of the two-year limitation period;

• (c) specifying that cryptoasset mining is generally not considered a supply for GST/HST purposes; and

• (d) ensuring that payment card clearing services are excluded from the definition “financial service” under the GST/HST legislation.

Part 3 amends the Excise Act, the Excise Act, 2001 and the Air Travellers Security Charge Act in order to implement two measures.

Division 1 of Part 3 amends the Excise Act and the Excise Act, 2001 in order to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1, 2023.

Division 2 of Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement after April 2024 and for which any payment is made after April 2024.

Part 4 enacts and amends several Acts in order to implement various measures.

Division 1 of Part 4 amends the Bank Act to strengthen the regime for dealing with complaints against banks and authorized foreign banks by, among other things, providing for the designation of a not-for-profit body corporate to be the sole external complaints body. It also makes consequential amendments to the Financial Consumer Agency of Canada Act and related amendments to the Financial Consumer Protection Framework Regulations.

Division 2 of Part 4 amends the Pension Benefits Standards Act, 1985 to, among other things, provide for variable life benefits under a defined contribution provision of a pension plan and amends the Pooled Registered Pension Plans Act to, among other things, provide for variable life payments under pooled registered pension plans. It also makes a consequential amendment to the Canadian Human Rights Act.

Division 3 of Part 4 contains measures that are related to money laundering and to digital assets and other measures.

Subdivision A of Division 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,

• (a) require persons or entities referred to in section 5 of that Act to report to the Financial Transactions and Reports Analysis Centre of Canada information that is related to a disclosure made under the Special Economic Measures Act or the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law);

• (b) strengthen the registration framework for persons or entities referred in paragraphs 5(h) and (h.1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which are often referred to as money services businesses;

• (c) create two new offences relating to persons or entities who engage in activities for which they are not registered under that Act and the structuring of financial transactions undertaken to avoid reporting obligations under that Act, as well as a new offence relating to reprisals by employers against employees who fulfill obligations under that Act;

• (d) facilitate the sharing, between the Minister of Finance, the Office of the Superintendent of Financial Institutions and the Financial Transactions and Reports Analysis Centre of Canada, of information that relates to their respective mandates; and

• (e) authorize the Minister of Finance to issue directives to persons and entities referred in section 5 of that Act in respect of risks relating to the financing of threats to the security of Canada.

Subdivision A also amends the Budget Implementation Act, 2021, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Subdivision B of Division 3 amends the Criminal Code to provide for a new warrant authorizing a peace officer or other person named in the warrant to search for and seize digital assets, including virtual currency, as well as to expand the list of offences on the basis of which an examination of information obtained by the Minister of National Revenue under various tax statutes may be authorized. The subdivision also makes related amendments to other Acts.

Division 4 of Part 4 amends the Customs Tariff to extend the expiry date of the General Preferential Tariff and Least Developed Country Tariff to December 31, 2034 and to create a new General Preferential Tariff Plus tariff treatment that will expire on the same date. The Division also aligns direct shipment requirements for tariff treatments under that Act with those that apply to free trade agreements.

Division 5 of Part 4 amends the Customs Tariff to remove Belarus and Russia from the List of Countries entitled to Most-Favoured-Nation tariff treatment.

Division 6 of Part 4 allows the Bank of Canada to apply, despite sections 27 and 27.1 of the Bank of Canada Act, any of its ascertained surplus to its retained earnings until its retained earnings are equal to zero or the ascertained surplus applied to its retained earnings is equal to the losses it incurred from the purchase of securities as part of the Government of Canada Bond Purchase Program.

Division 7 of Part 4 enacts the Canada Innovation Corporation Act. That Act continues the Canada Innovation Corporation, which was established under another Act, as a parent Crown corporation, sets out the Corporation’s purpose to maximize business investment in research and development across all sectors of the economy and in all regions of Canada to promote innovation-driven economic growth and includes transitional provisions. The Division also makes consequential and related amendments to other Acts.

Division 8 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.

Division 9 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to renew the authority to make Equalization and Territorial Formula Financing...