The end of 2023 was busy on many fronts, but what was actually achieved?

It’s a good question to ask the federal government, which released draft legislation and tabled a bill to implement several tax proposals during Parliament’s fall sitting. None of those proposals, however, passed into law.

Further, Prime Minister Justin Trudeau has not issued new mandate letters since 2021 for most of his cabinet ministers despite a shuffle in July. (Updated letters were issued to two ministers with non-financial portfolios in November.)

With the House of Commons not sitting until Jan. 29, we review the state of the government’s major tax and estate-planning promises since our last update.

Proposals in Bill C-59

In November, the federal government tabled Bill C-59 to implement measures from the 2023 federal budget and fall economic statement, but MPs left Ottawa in December with the bill at second reading.

The bill contains legislation to implement the following key proposals:

  • Changes to intergenerational wealth transfers that occur on or after Jan. 1, 2024. Two updates were made to the August draft legislation:
    • Parents looking to sell their business to their children no longer need to control the company immediately before the sale.
    • Business owners who sold all or part of their business to their child under the current rules, enacted under Bill C-208 in 2021, won’t be prevented from using the new framework to sell the rest of their business, or another business, to their child.
  • Changes to the general anti-avoidance rule (GAAR), which were largely unchanged from August. However, the penalty will now be calculated as 25% of the additional tax owing by a taxpayer as a result of the GAAR’s application. This is slightly harsher than the August calculation since it includes the value of refundable tax credits lost when GAAR was applied.
  • The 2% share buyback tax that will apply as of Jan. 1, 2024, to the annual net value of equity repurchases by public corporations and certain public trusts and partnerships.
  • Making planning that results in non-CCPC status a reportable transaction so the Canada Revenue Agency (CRA) can assess whether or not the corporation is a “substantive CCPC.”
  • Permitting a qualifying family member to be a successor-holder of an RDSP following the death of that plan’s last remaining holder who was also a qualifying family member.
  • Changes to the tax treatment of dividends on Canadian shares for financial institutions, a move that could increase fees for investment products.
  • Employee ownership trusts, with an improved tax incentive.
  • Tax changes to retirement compensation arrangements.

Notable proposals not in C-59

Proposals passed into law

As mentioned, no major income tax proposals passed into law during the fall session of Parliament. However, Bill C-56, which received royal assent in December, included a GST rebate on construction of rental housing.

Proposals with no major updates since our last check-in

  • The Liberals promised in their 2019 election platform to raise the CPP and QPP survivor’s benefit by 25%, and the matter is being studied as part of the 2022-2024 Triennial Review of the CPP.
  • The Aging at Home Benefit was first proposed in the Liberals’ 2021 election platform. The National Seniors Council launched a consultation regarding how to support aging at home, and presented its report to the Minister of Labour and Seniors and the Minister of Health on Sept. 29, 2023, the council told Investment Executive. The report is currently being reviewed.
  • As stated in the 2023 federal budget, the CRA will pilot a new automatic filing service intended to help vulnerable Canadians receive benefits beginning in 2024. A spokesperson for the CRA confirmed in December that it intends to move forward, but did not indicate whether the pilot project would be ready in time for the 2023 tax filing season.
  • These promises from the 2019 election platform were mentioned in Finance Minister Chrystia Freeland’s 2021 mandate letter, but no progress has been announced since:
    • make the Canada Caregiver Credit refundable
    • implement a Career Extension Tax Credit for working seniors
  • Increasing the guaranteed income supplement by $500 for single seniors and by $750 for couples, beginning at age 65, was included in the mandate letter for Seniors Minister Kamal Khera, but no progress has been announced since.
  • Nothing has been announced with regards to these 2019 election promises:
    • increasing the Canada Child Benefit by 15% for kids younger than one year old;
    • making EI maternity and parental benefits tax-exempt
    • doubling the child disability benefit