Canada: 2022 federal budget passes third reading

Canada's first budget implementation bill, which includes several tax measures from the 2022 budget, passed its third reading in the House of Commons.

Bill C-19 also includes several outstanding 2021 federal budget measures including:

• Immediate expensing of certain capital property for Canadian-controlled private corporations (CCPCs), sole proprietors and certain partnerships
• Corporate income tax rate reductions for zero-emission technology manufacturing
• Changes to capital cost allowance (CCA) for clean energy equipment
• A new luxury tax on certain new aircrafts and motor vehicles priced over $100,000* and certain boats priced over $250,000
• Temporary extension to the period for incurring eligible expenses and other deadlines under film or video production tax credits

Prior to passing third reading, several measures in Bill C-19 were amended. Specifically, the amendments include changes to the coming-into-force provision for the proposed luxury tax on certain aircraft and changes to some of the indirect tax measures in the bill. The amendments also clarify that the proposed two-year ban on foreign purchases of Canadian residential property will now come into force on 1 January 2023.

Note that Bill C-19 does not include corporate tax changes proposed in the 2022 federal budget, such as the "substantive CCPC" rules, the one-time 15% Canada Recovery Dividend on bank and life insurer groups or the additional 1.5% tax on the taxable income for members of bank and life insurer groups (as determined for the purposes of the dividend).

Read a June 2022 report prepared by the KPMG member firm in Canada

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