- announce the Canada Recovery Dividend, a one-time 15% tax on banks and life insurers, and propose an additional 1.5% tax on banking and life insurer groups
- address tax planning that is viewed as manipulating Canadian-controlled private corporation (CCPC) status, in the context of investment income taxation; and reduce the foreign tax deductions that CCPCs may claim for foreign accrual property income
- curtail certain ‘aggressive’ tax planning arrangements by financial institutions that result in artificial tax deductions
- amend the application of the general anti-avoidance rule, to ensure that it applies in respect of tax attributes that have not yet become relevant to the computation of tax
- announce a public consultation on the Canadian implementation of OECD model rules that introduce a global minimum tax (Pillar Two) for large multinational enterprises.
The takeaway: The budget does not include changes to corporate income tax rates, and does not provide an update on the expected timing of ‘anti-hybrid’ legislation, although the government is committed to releasing draft rules. This is concerning to taxpayers as the first phase of these rules was to be effective July 1, 2022. Although still waiting for the rules, taxpayers should be prepared for their imminent effective date.