Canada Federal Budget Tax Updates 2024
Overview
On April 16, 2024, the Federal government presented its 2024 Budget “Fairness for every generation” in the House of Commons. This comprehensive summary highlights the key changes that will influence Canada’s tax environment in the coming years.
Personal Income Tax Measures
| Taxable income | Rate |
| $55,867 or less | 15.00 % |
| More than $55,867 but not more than $111,733 | 20.50 % |
| More than $111,733 but not more than $173,205 | 26.00 % |
| More than $173,205 but not more than $246,752 | 29.00 % |
| More than $246,752 | 33.00 % |
Capital Gains Inclusion Rate
Currently, half of a capital gain is included in a taxpayer’s income, known as the capital gains inclusion rate, which also applies to capital losses.
The 2024 federal Budget proposes to increase the capital gains inclusion rate from 50% to 66.66% for corporations and trusts, and from 50% to 66.66% on the portion of capital gains exceeding $250,000 for individuals, for gains realized on or after June 25, 2024.
The $250,000 threshold would apply to capital gains net of any current-year capital losses, capital losses from previous years used to reduce current-year gains and gains eligible for the Lifetime Capital Gains Exemption, proposed Employee Ownership Trust Exemption, or proposed Canadian Entrepreneurs’ Incentive.
Taxpayers eligible to the employee stock option deduction would receive a one-third deduction of the taxable benefit, reflecting the new inclusion rate, up to a combined limit of $250,000 for both options and capital gains.
Net capital losses from previous years would remain deductible against current-year gains, adjusted for the inclusion rate change, to ensures losses realized before the rate change offset equivalent gains afterward.
For tax years spanning before and after June 25, 2024, transitional rules would apply. However, the $250,000 threshold for individuals will not be prorated and will apply solely to net gains post-change.
Amendments reflecting the new inclusion rate will be detailed further in the coming months.
Canadian Entrepreneurs’ Incentive
The 2024 Budget introduces the Canadian Entrepreneurs’ Incentive, aimed at reducing the tax rate on capital gains from the sale of qualifying shares by eligible individuals. Under this initiative, the capital gains inclusion rate would be halved (i.e. 33.33% of qualifying disposition), applicable to up to $2 million in lifetime capital gains per individual.
The implementation of the lifetime limit would occur gradually, increasing by $200,000 annually starting from January 1, 2025, until reaching $2 million by January 1, 2034. With the proposed two-thirds capital gains inclusion rate, qualifying dispositions would be subject to a one-third inclusion rate, in addition to any available capital gains exemption.
Qualifying disposition requires a disposition of a qualifying share, which meets certain conditions, including:
- The share must be a a share of a small business corporation owned directly by the claimant.
- Throughout the 24-month period immediately before the disposition, the share was a share of a Canadian-Controlled Private Corporation (“CCPC”) and more than 50% of the fair market value of the assets of the corporation were used principally in an active business carried on primarily in Canada by the CCPC or a related corporation or certain shares or debts of connected corporations that respect this condition.
- The eligible taxpayer must be a founding investor having held the share for a minimum of five years prior to disposition.
- Throughout the share detention period, the founder investor must have directly owned shares amounting to more than 10 per cent of the fair market value of the corporation and giving the individual more than 10 per cent of the voting right.
- The taxpayer must have been actively engaged on a regular, continuous, and substantial basis in the activities of the business throughout the five-year period ending immediately before the disposition.
- The share must have been obtained for fair market value consideration.
- The share must not represent a direct or indirect interest in a professional corporation, a corporation whose principal asset is the reputation or skill of one or more employees, or a corporation operating in the financial, insurance, real estate, food and accommodation, arts, recreation, or entertainment sector; or providing consulting or personal care services.
This measure would come into effect for dispositions occurring on or after January 1, 2025.
Lifetime Capital Gains Exemption
The tax system grants individuals a lifetime exemption from income tax on capital gains realized from the sale of qualified small business corporation shares and eligible farm or fishing property. This exemption, known as the Lifetime Capital Gains Exemption (LCGE), amounts to $1,016,836 in 2024 and is adjusted annually to account for inflation.
The Budget increases the LCGE to up to $1.25 million. This proposed change would apply to dispositions occurring on or after June 25, 2024. Indexation of the LCGE would resume in 2026.
Home Buyers’ Plan
The 2024 Federal Budget increases the withdrawal limit from registered retirement savings plans (RRSPs) under the Home Buyers’ Plan (HBP) from $35,000 to $60,000. The measure, which would also be applicable in respect with withdrawals made for the benefit of a disabled individual, applies to withdrawals made after Budget Day 2024 and subsequent years.
The Budget also announced temporary repayment relief by deferring the start of the 15-year repayment period by an extra three years for participants making their first withdrawal between January 1, 2022, and December 31, 2025. Consequently, the repayment period would commence five years after the initial withdrawal.
Employee Ownership Trust Tax Exemption
The Budget provides further details for Employee Ownership Trusts (“EOT”), specifically, on the exemption of the first $10 million in capital gains realized on the sale of a qualifying business to an EOT, as initially proposed in the 2023 Fall Economic Statement (such proposals, which were tabled as part of Bill C-59, are currently under review by Parliament).
Budget 2024 adds precisions around the “Qualifying conditions” required for the exemption to be available to an individual (other than a trust). Such conditions would include, among other, active engagement in the business (minimum period of 24 months before a qualifying transfer of business), residency requirements for beneficiaries of the EOT (i.e. 90% or more of the EOT beneficiaries need to be Canadian residents after the qualifying business transfer), requirement regarding the type of business (i.e. professional corporation would be an excluded type of business) and the use of its assets (more than 50% of the corporation’s assets must be used in an active business for a minimum period of 24 months prior to the transfer).
Additionally, the Budget specifies that any “Disqualifying events” that would occur within 36 months of the sale could void the exemption (i.e. potential retroactive denial of capital gains exemption). An example of such an event would be, if an EOT loses its status as an EOT or if less than 50% of the fair market value of the qualifying business’ shares is attributable to assets used principally in an active business at the beginning of two consecutive taxation years of the corporation.
As the total maximum capital gains exemption related to a qualifying business transfer to an EOT could not exceed $10 million, each individual taxpayers involved in the qualifying share disposition to an EOT would need to allocate between themselves the total $10 million exemption available.
Furthermore, Budget 2024 proposes to expand qualifying business transfers to include sales to worker cooperative corporation, offering similar exemptions and benefits.
In addition, capital gains exempted under the proposed OET rules, would be subject to an inclusion, for the individual transferor taxpayer, at a rate of 30% under the Alternative Minimum Tax computation described below.
The normal reassessment period that would be applicable to taxpayers claiming this capital gains exemption is proposed to be extended by three years under the 2024 Budget.
These measures would be effective for qualifying share dispositions between January 1, 2024, and December 31, 2026.
Alternative Minimum Tax
The Alternative Minimum Tax (AMT) is a parallel tax calculation which is used essentially to target high income individuals or certain trusts benefiting from preferential tax incentives. This substitute taxable income computation allows fewer tax credits, deductions, and exemptions compared to ordinary personal income tax rules. Taxpayers are required to pay either the regular tax or the AMT, whichever is higher. AMT paid in one taxation year may be carried forward for up to seven years to reduce ordinary tax payable of a subsequent year, as long as the AMT in that subsequent year is less than regular tax payable.
Amendments to the Income Tax Act were introduced as part of Budget 2023 to modify the AMT calculation. The Budget 2024 announces further changes to the AMT calculation (i.e. increasing the Charitable donations tax credit claimable under the AMT from 50% to 80%, complete deduction of Guaranteed Income Supplement, exempting EOT from AMT, etc.) and introduces several other technical amendments.
The amendments to the AMT described above would be effective for taxation years beginning on or after January 1, 2024.
Mineral Exploration Tax Credit
Flow-through shares enable resource companies to transfer, tax expenses related to Canadian exploration activities, to investors, who can then deduct those expenses from their taxable income. The Mineral Exploration Tax Credit further incentivizes investment in mining flow-through shares by providing a credit equal to 15% of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors, to support junior mining companies engaged in grassroots mineral exploration.
Originally set to expire on March 31, 2024, the government proposes to extend the Mineral Exploration Tax Credit eligibility for one year, applicable to flow-through share agreements entered into on or before March 31, 2025.
Volunteer Firefighters and Search and Rescue Volunteers Tax Credits
Effective in 2024, the Budget doubles the Volunteer Firefighters Tax Credit and the Search and Rescue Volunteers Tax Credit from $3,000 to $6,000, allowing individuals who have volunteered at least 200 hours as firefighters or search and rescue volunteers to claim a 15% non-refundable tax credit. This enhanced tax incentive which could represent up to $900 of reduction in taxes and would be applicable to 2024 and any subsequent tax year.
Canada Child Benefit (CCB)
Currently, the Canada Child Benefit (CCB) payments cease to be paid the month following a child’s death, potentially leading to overpayments if the CRA isn’t notified by the recipient, which then would result in CRA clawing back, in the following months, any CCB overpayment. The budget announces amendments to the CCB program to extend eligibility for the CCB in respect of a deceased child for six months following their death. This extension also applies to the Child Disability Benefit.
The measure would be effective for deaths occurring after 2024.
Disability Supports Deduction
The Budget introduces an expansion of the list of expenses recognized under the Disability Supports Deduction, which allows individuals with impairments in physical or mental functions to deduct additional expenses that facilitate their ability to earn income or attend school, including the costs of ergonomic work chairs, bed positioning devices, mobile computer carts, alternative input devices, digital pen devices, navigation devices for low vision and memory or organizational aids. Additionally, expenses for service animals, defined under the Medical Expense Tax Credit rules, would be recognized under the Disability Supports Deduction. However, taxpayers eligible to both incentives would need to select which of the Disability Supports Deduction or the Medical Expense Tax Credit they would opt for.
These changes would apply from the 2024 taxation year onwards.
Qualified Investments for Registered Plans
The Budget addresses the complexity of qualified investment rules for registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs), tax-free savings accounts (TFSAs), and other registered plans and the Canadian government seeks feedback from stakeholders (comments to be received by July 15th, 2024) on modernizing these rules to enhance clarity and coherence. Specific areas under review include harmonizing rules for investments in small businesses across all registered plans, reassessing the qualification of certain annuities, evaluating conditions for pooled investment products, promoting Canadian-based investments and considering the eligibility of crypto-backed assets as qualified investments.
Deduction for Tradespeople’s Travel Expenses
The Budget announces the intention to change the Income Tax Act, aiming to establish a unified deduction for travel expenses of eligible tradespeople and apprentices in the construction industry.
Business Income Tax Measures
No changes were proposed to the corporate tax rates as part of the 2024 Federal budget. The Federal corporate income tax rates in Canada for 2024 are as follows:
| Federal tax rate | Federal Tax Rate |
| General Corporate Income Tax Rate | 15.0 % |
| Small Business Tax Rate on the first 500,000 of taxable income | 9.00 % |
Accelerated Capital Cost Allowance
The Budget introduces an accelerated Capital Cost Allowance (CCA) aimed at stimulating investment in purpose-built rental housing and productivity-enhancing assets.
Purpose-Built Rental Housing
For new eligible purpose-built rental projects that begin construction between Budget Day and January 1, 2031 (while being available for use before January 1st, 2036), a CCA rate of 10% will be available, compared to the current 4% rate. Eligible properties must meet specific criteria, including having at least four private apartment units or 10 private rooms, with at least 90% of such held for long-term rental. Additionally, conversions of non-residential real estate into residential complexes may qualify. This measure which excludes renovation of existing residential complexes (except for any additions to existing structure), aligns with the temporary enhancement to the new GST Residential Rental Property Rebate.
Productivity-Enhancing Assets
The 2024 Budget proposals also include immediate expensing for certain productivity-enhancing assets such as patents, data network infrastructure equipment, and electronic data-processing equipment acquired on or after Budget Day and before January 1, 2027. This enhanced allowance offers a 100% first-year deduction (when property becomes available for use), promoting investment in innovation and technology.
The Accelerated Investment Incentive, which suspends the half-year rule for eligible property placed in use before 2028, will continue to apply to the above CCA classes property acquisition incentives.
Interest Deductibility Limits – Purpose-Built Rental Housing
The Budget proposes to expand the existing exemption for interest and financing expenses under the EIFEL rules to include arm’s length financing used for eligible purpose-built rental housing projects in Canada.
This elective exemption applies to expenses incurred before January 1, 2036. Eligible housing projects must meet specific criteria outlined in the GST New Residential Rental Property Rebate and the proposed accelerated Capital Cost Allowance for Purpose-Built Rental Housing. The change takes effect for taxation years beginning on or after October 1, 2023, aligning with broader EIFEL legislative proposals (included in Bill C-59 currently under Parliament’s review).
Clean Electricity Investment Tax Credit
The Budget introduced a refundable Clean Electricity investment tax credit, set at 15% of eligible property’s capital cost, with further details provided in the 2023 Fall Economic Statement. The Budget 2024 outlines the eligibility criteria and implementation specifics for this tax credit.
Eligible Entities
Eligible entities include taxable Canadian corporations, provincial/territorial Crown corporations, municipalities-owned corporations, Indigenous community-owned corporations, and pension investment corporations.
Eligible Property
Eligible property includes equipment for electricity generation from renewable sources (solar, wind, water, etc.), nuclear fission, geothermal energy, specified waste materials, electricity storage, natural gas with carbon capture, and interprovincial/territorial electrical transmission infrastructure. Labour requirements apply to qualify for the full 15% credit, with a reduced credit available of 5% if the requirements are not met.
Compliance and Recovery
The tax credit is subject to compliance and potential repayment obligations, especially concerning emissions intensity verification and continuous reporting for natural gas energy systems.
Only one (no doubling up) of the following credits would be available for eligible corporations’ investing in each credit’s respective eligible properties:
- Clean Electricity Investment Tax Credit (“ITC”).
- Clean Technology ITC.
- Clean Electricity ITC.
- Carbon Capture, Utilization and Storage ITC.
- Clean Hydrogen ITC.
- Clean Technology Manufacturing ITC.
- Electric Vehicle Supply Chain (ITC).
However, it would still be possible for an eligible corporation to fully benefit from both the Clean Electricity ITC and the Atlantic ITC in respect of the same expense, should it be eligible for both credits.
The credit applies to property acquired and available for use on or after Budget Day and before 2035, with exceptions for ongoing projects and modifications for designated jurisdictions.
Polymetallic Extraction and Processing
The Budget 2024 announces adjustments to the Clean Technology Manufacturing ITC that was introduced in the Budget 2023 to better support businesses engaged in producing multiple types of qualifying materials, including critical minerals.
Eligible activities now cover mineral extraction, processing, and recycling, with a focus on key minerals like copper, nickel, cobalt, lithium, graphite, and rare earth elements. The proposed changes clarify the use of qualifying materials as the output metric and introduce a “primarily” test for property used in qualifying mineral activities, requiring that at least 50% of the output’s financial value comes from qualifying materials.
Additionally, a recapture and Safe Harbour rule are proposed to address potential changes in property use and mineral price volatility. These changes aim to encourage investment in clean technologies while considering potential environmental impacts such as habitat disruption and increased emissions.
The above proposed changes would be applicable for property acquired and available for use on or after January 1st, 2024
Canada Carbon Rebate for Small Businesses
The Budget introduces the Canada Carbon Rebate for Small Businesses, aimed at returning a portion of the fuel charge proceeds to eligible small and medium-sized businesses in provinces where the federal backstop pollution pricing fuel charge applies (Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador).
The rebate is designed to provide automatic, refundable tax credits directly to eligible businesses based on the number of employees they have in each province. The CRA will automatically calculate and disburse the credit to eligible businesses (i.e. Canadian Controlled Private Corporations, employing 499 employees or less and which file a return by July 15th, 2024).
Non-Compliance with Information Requests
The Budget 2024 proposes amendments to enhance the information gathering provisions in the Income Tax Act, aiming to improve compliance and enforcement by the CRA, including:
- The introduction of a new type of notice referred to as a “notice of non-compliance” intended for a person that has not complied with a requirement or notice to provide assistance or information issued by the CRA.
- A Taxpayer receiving such “notice of non-compliance” could face penalties of $50 per the number of days the notice has been outstanding, up to a maximum of $25,000.
- Allowing CRA to include in a requirement or notice that any required information (oral or written) or documents be provided under oath or affirmation.
- The possibility to impose, in certain cases, a penalty when the CRA obtains a compliance order from a Court against a taxpayer equal to 10% of the aggregate tax payable by the taxpayer in respect of the taxation year or years to which the compliance order relates (provided the tax owing in respect of one of the taxation year the order relates to exceeds $50,000).
- Amendment to the “stop the clock” rules so that they apply when a taxpayer seeks judicial review of any requirement or notice issued to the taxpayer by the CRA.
- Similar amendments to other tax statutes administered by the CRA.
These amendments, which are to come into force on royal asset of the enacting legislation, are designed to ensure more effective tax audits, facilitate timelier tax collection, and enhance enforcement measures.
Avoidance of Tax Debts
The Income Tax Act includes an anti-avoidance provision aimed at preventing taxpayers from escaping their tax obligations by transferring assets to non-arm’s length persons. This rule makes the transferee jointly and severally or solidarily liable with the transferor for the tax debts, in cases where the transferred property’s value is exceeding the consideration given. Despite existing rules, some taxpayers persist in circumventing this provision, often with costly and time-consuming challenges for the government. To address this, Budget 2024 proposes a supplementary rule to reinforce the tax debt anti-avoidance provision.
The rule will apply when:
- There has been a transfer of property from a tax debtor to another person.
- as part of the same transaction or series of transactions, there has been a separate transfer of property from a person other than the tax debtor to a transferee that does not deal at arm’s length with the tax debtor; and
- one of the purposes of the transaction or series is to avoid joint and several, or solidary, liability.
Where the above conditions are met, the property transferred by the tax debtor would be deemed to have been transferred to the transferee for the purposes of the tax debt avoidance rule and the penalty related to tax debt avoidance planning would be applicable. Such penalty would equal the lesser of 50% of the attempted tax avoidance amount and $100,000 (plus any amount to be received by related persons as part as such planning).
Additionally, any taxpayers who participate in tax debt avoidance planning will be jointly and severally, or solidarily liable for the full amount of the avoided tax debt, including any portion that has effectively been retained by the planner.
Similar amendments would apply to other federal statutes.
These measures would take effect for transactions occurring on or after Budget Day.
Reportable and Notifiable Transactions Penalty
The Income Tax Act includes general provisions which impose penalties for failing to file returns or comply with rules, with fines up to $25,000 and possible imprisonment (up to one year).
The Budget 2024 proposes to remove such penalty for not filing an information return regarding reportable or notifiable transactions under mandatory disclosure rules, the reason being that such rules are already subject to specific penalty provisions rendering the general penalty provisions unnecessary. This change is retroactive to June 22, 2023.
Mutual Fund Corporations
A mutual fund corporation, organized under the Income Tax Act, enjoys special tax treatment, including conduit treatment for investors’ capital gains and certain exemptions. Budget 2024 introduces changes to the Income Tax Act to limit planning where a corporate group use a mutual fund corporation to benefit from the special rules available to these corporations in an unintended manner. Those changes would apply to taxation years that begin after 2024.
Synthetic Equity Arrangements
The Budget includes a proposal for the removal of the “tax-indifferent investor” exception (including the exchange traded exception) from the anti-avoidance rule applicable to certain dividends received in a context of a synthetic equity arrangements (where the economic exposure of a share is transferred to another party). This measure would apply to dividends received on or after January 1, 2025.
Manipulation of Bankrupt Status
Budget 2024 proposes modifications to the Income Tax Act, specifically the repeal of the exception to the application of the debt forgiveness rules for bankrupt corporations as well as the loss restriction rule applicable to bankrupt corporations. Following Budget Day, Bankrupt corporations will be subject to the general rules that apply to other corporations whose commercial debts are forgiven. The bankruptcy exception will remain in place for individuals.
These proposals would apply to bankruptcy proceedings that are commenced on or after Budget Day.
International Tax measures
Withholding for Non-Resident Service Providers
The current tax legislation requires withholding of 15% on payments made to non-residents for services, such non-residents would have performed in Canada. This requirement serves as prepayment for potential Canadian taxes on income earned by those non-residents while carrying on a business in Canada. However, many non-residents do not actually owe any Canadian tax based upon the benefits conferred by any relevant tax treaty or tax exemptions granted by such treaties for certain services. Non-residents can seek waivers or refunds, but many simply choose to pass the withholding cost to their clients (generally Canadian payors).
The Budget 2024 introduces legislative authority enabling CRA to waive the withholding requirement in the following cases :
- the non-resident would not be subject to Canadian income tax in respect of the payments because of a tax treaty between its country of residence and Canada; or
- the income from providing the services is exempt income from international shipping or from operating an aircraft in international traffic.
This measure would come into force on royal assent of the enacting legislation.
International Tax Reform
The budget reiterates Canada’s commitment to the OECD/G20 Inclusive Framework’s two-pillar plan for international tax reform.
Pillar One addresses challenges posed by the digital economy by reallocating taxing rights between countries for multinational enterprises (MNEs) with significant revenue and profit margins, with a focus on market countries where users and customers are located. While Canada remains committed to Pillar One, it has already move forward with the Digital Services Tax beginning in 2024, covering revenues from January 1, 2022, and on.
Pillar Two introduces a 15% global minimum tax targeting MNEs with substantial global revenues. MNEs must compute their effective tax rate in each operating country, with a top-up tax imposed if the rate falls below 15%. Canada is progressing with the implementation of the enacting legislation for Pillar Two.
Crypto-Asset Reporting Framework and the Common Reporting Standard
Since the implementation of the Common Reporting Standard (CRS), financial markets have been in constant evolution and we have witnessed the emergence of crypto assets, which are sometimes not covered by the CRS. The OECD has thus developed a new framework, referred to as the Crypto-Asset Reporting Framework (CARF) to facilitate exchange of tax information in relation to transactions in crypto-assets.
The Budget 2024 announced implementation of the CARF in Canada, including new annual reporting requirements in the Income Tax Act for crypto-asset service providers. The Budget also introduces the implementation of amendments to the CRS endorsed by the OECD in connection with the CARF, to broaden its scope and ensure effective coordination between the CRS and the CARF.
These measures would apply to the 2026 and subsequent calendar years.
Sales Tax measures
Extending GST Relief to Student Residences
In response to the temporary removal of GST from new purpose-built rental housing projects announced on September 14, 2023, the 2024 Budget introduces amendments to the Excise Tax Act to allow universities, public colleges, and school authorities to apply regular GST/HST rules to new student housing projects, enabling them to claim the Enhanced (100%) GST Rental Rebate.
Additionally, rebate conditions for not-for-profit entities are relaxed, enabling them to claim the rebate for student residences primarily intended for student housing purposes.
These measures apply to student residences which construction started after September 13, 2023 and before 2031, and that completed before 2036.
GST/HST on Face Masks and Face Shields
The Budget announces the repeal of the temporary zero-rating provision for the supply of certain face masks or respirators and certain face shields under the GST/HST, that were originally enacted due to the COVID-19 pandemic. This measure would apply to supplies made on or after May 1, 2024.
Tobacco and Vaping Product Taxation
The Budget introduces several amendments related to tobacco and vaping products:
Tobacco products
The tobacco excise duty rates are increased by $4 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates for other tobacco products. The Budget 2024 also introduces an inventory tax on cigarettes ($0.02 per cigarette subject to certain exception). This measure will come to effect on the day after Budget Day.
A new prescribed limit up to 2500 grams of packaged raw leaf tobacco will apply for importation for personal use as well as a new definition of “packaged” for raw leaf tobacco to ensure the proper enforcement of the new limit for importation, and to better reflect current business practices.
The above importation limit measure would come into effect on the first day of the month following royal assent to the enabling legislation.
Vaping Products
The Budget announces the increase of the Vaping Product Excise Duty rates that will apply in addition to the duty imposed in respect of participating jurisdictions under the coordinated vaping product taxation framework. This measure would come into force on July 1, 2024; i.e., the same day as the effective date for the introduction of the coordinated vaping product taxation regime for Ontario, Quebec, the Northwest Territories, and Nunavut. The current excise duty rate of $1, for the below respective quantities, would be increased to:
- For non-participating jurisdictions, the proposed excise duty rates on July 1st, 2024, will be $1.12 per 2 ml or fraction thereof for the first 10 ml of vaping substance in the vaping device or immediate container, and $1.12 per 10 ml or fraction thereof for amounts over the first 10 ml.
- For participating jurisdictions, the proposed excise duty rates on July 1st, 2024, will be $2.24 per 2 ml or fraction thereof for the first 10 ml of vaping substance in the vaping device or immediate container and $2.24 per 10 ml or fraction thereof for amounts over the first 10 ml.
Other Tax Measures
Charities and Qualified Donees
The Budget introduces amendments to the Income Tax Act and Income Tax Regulations aiming to enhance the functionality of rules concerning registered charities and other qualified donees.
Notably, it proposes extending the duration of status as a qualified donee for foreign charities from 24 to 36 months, while mandating these charities to submit annual information returns to the CRA (which would include information on receipts issued to Canadian donors). The information included in the required annual returns would be made publicly available.
Additionally, the 2024 Budget suggests amendments to help simplify and modernize the way in which the CRA provides services and communicates information relating to registered charities and other qualified donees, allowing digital communication of official notices to charities that opt for electronic correspondence, and removing the requirement for publication of registration revocations in the Canada Gazette.
Further, it proposes simplifications in the issuance of official donation receipts by eliminating certain requirements and permitting electronic issuance, subject to specific conditions.
These measures would come into effect based on various timelines, with extensions and new reporting requirements for foreign charities applying to those registered after Budget Day, and other changes taking effect upon royal assent of enabling legislation.
Fuel, Alcohol, Cannabis, and Tobacco Sales Tax Framework
Budget 2024 proposes amendments to the First Nations Goods and Services Tax Act, granting Indigenous governments more flexibility when seeking tax jurisdiction on their lands. The amendments would allow Indigenous governments to adopt a value-added sales tax, under their own laws, specifically targeting fuel, alcohol, cannabis, tobacco, and vaping products, within their reserves or settlement lands.
Previously Announced Measures
Budget 2024 confirms the implementation of various tax measures previously announced and modified to consider consultations, deliberations, and legislative developments, since their release.
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