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• 2024 – Provinces and territories
• 2023 – Federal
• 2023 – Provinces and territories

2024 – Provinces and territories

British Columbia

[2024-02-22 Budget]

British Columbia film and television tax credit – Effective June 1, 2024, animation productions will be excluded from the regional and distant location tax credits.

British Columbia mining exploration tax credit – Effective February 23, 2024, oil and gas exploration expenses will be excluded from the mining exploration tax credit.

British Columbia production services tax credit – Effective June 1, 2024, animation productions will be excluded from the regional and distant location tax credits.

British Columbia shipbuilding and ship repair industry tax credit – The credit is extended for two years to the end of 2026.

British Columbia training tax credit – The credit is extended for three years to the end of 2027.

Manitoba

[2024-04-02 Budget]

Manitoba cultural industries printing tax credit – The credit is extended for one year to December 31, 2025.

Manitoba data processing investment tax credits – These credits are eliminated effective for the 2025 tax year.

Manitoba interactive digital media tax credit – Expenses for eligible projects are to be claimed in the tax year in which they were incurred. A sub-category of qualifying corporations is established for Manitoba video game companies. Qualifying corporations in the new sub-category would be exempt from having to apply for a certificate of eligibility (pre-approval) before project work starts.

Manitoba rental housing construction tax credit – Effective for the 2024 tax year, a new tax credit is announced that will provide $8,500 for the construction of new market-rate rental units and $13,500 for units classified and maintained as affordable units for a period of least 10 years. Construction must start on or after January 1, 2024. This tax credit will be fully refundable for non-profit organizations. For other businesses, $8,500 will be fully refundable on all units, with an additional $5,000 non-refundable credit available over 10 years for affordable units.

Newfoundland and Labrador

[2024-03-21 Budget]

Newfoundland and Labrador – Provincial corporation tax – Effective January 1, 2024, the lower rate of income tax is decreased from 3% to 2.5%.

Nova Scotia

[2024-02-29 Budget]

Nova Scotia digital animation tax credit – The credit is extended for five years to December 31, 2030.

Nova Scotia digital media tax credit – The credit is extended for five years to December 31, 2030.

Nova Scotia innovation equity tax credit – The credit is extended for five years to March 1, 2029. 

Nova Scotia venture capital tax credit – The credit is extended for five years to March 30, 2029.

Ontario

[2024-03-26 Budget]

Ontario computer animation and special effects (OCASE) tax credit – For productions for which computer animation or special effects work begins after March 25, 2024, a qualifying corporation will no longer have to also qualify for either the Ontario film and television tax credit or the Ontario production services tax credit. Instead, it will have to incur a minimum of $25,000 in Ontario labour expenditures for each film or television production for which the OCASE credit is claimed. This minimum labour expenditure threshold will have to be incurred either:

• in the tax year of the claim, or 
• cumulatively between the tax year of the claim and the previous tax year

Once the minimum labour expenditure threshold is reached, expenditures related to that production in any subsequent tax year will also be eligible. Certain types of productions will be excluded from eligibility, such as instructional, music and gaming videos.

Ontario film and television tax credit – The government confirmed that it will review the Ontario film and television tax credit regional bonus to ensure it effectively supports film and television production across the province.

Saskatchewan

[2024-03-20 Budget]

Saskatchewan – Provincial corporation tax – The lower tax rate of income tax of 1% is extended until June 30, 2025. It was set to return to 2% on July 1, 2024.

2023 – Federal

[2023-11-21 Fall Economic Statement]

Canadian journalism labour tax credit

The 2023 Fall Economic Statement proposes to increase the cap on labour expenditures per eligible newsroom employee from $55,000 to $85,000. It also proposes to temporarily increase the tax credit rate from 25% to 35% for a period of four years. As a result, organizations would be able to claim up to $29,750 in eligible labour costs per eligible newsroom employee per year. These changes would apply to qualifying labour expenditures incurred after 2022. The rate would return to 25% for expenditures incurred after 2026. Transitional rules would apply to prorate these changes if an organization's tax year does not follow a calendar year.

Clean electricity investment tax credit

The 2023 Fall Economic Statement proposes to expand eligibility for the credit to include systems that produce electricity or both electricity and heat from waste biomass.

Clean technology investment tax credit

The 2023 Fall Economic Statement proposes to expand eligibility for the credit to include systems that produce electricity, heat, or both electricity and heat from waste biomass. This would be available to businesses investing in eligible property that is acquired and becomes available for use on or after November 21, 2023.

Dividend received deduction by financial institutions

Budget 2023 proposed to deny the dividend received deduction for dividends received after 2023 by financial institutions on shares that are mark-to-market property or tracking property. The 2023 Fall Economic Statement proposes an exception to this measure for dividends received on taxable preferred shares (as defined in the Income Tax Act).

Excessive interest and financing limitation (EIFEL) rules

[2023-08-04 Draft Legislative Proposals]

In general terms, the proposed EIFEL rules limit the amount of net interest and financing expenses that may be deducted in computing a taxpayer's income to no more than a fixed ratio of earnings before interest, taxes, depreciation and amortization. Generally, the proposed EIFEL rules apply directly to taxpayers that are corporations or trusts. They also apply indirectly to partnerships, as interest and financing expenses and revenues of a partnership are attributed to members that are corporations or trusts, in proportion to their interests in the partnership.

The proposed EIFEL rules generally apply to tax years starting on or after October 1, 2023.

[2023-03-28 Budget]

Clean economy investment tax credits

Budget 2023 proposed the creation of new investment tax credits, some previously announced in the Fall Economic Statement 2022, along with modifications to the carbon capture, utilization, and storage investment tax credit (CCUS ITC).

Interactions with other federal tax credits

Businesses will be able to claim only one of the following clean economy ITCs if a particular property is eligible for more than one of the credits:

• clean electricity ITC 
• clean hydrogen ITC
  
• clean technology ITC 
• clean technology manufacturing ITC
• carbon capture, utilization and storage ITC

However, multiple tax credits could be available for the same project, if the project includes different types of eligible property.

Businesses will be able to fully benefit from both the clean economy ITCs (other than the CCUS ITC) and the Atlantic investment tax credit.

Labour requirements related to certain investment tax credits

To achieve the maximum tax credit rates for all ITCs (other than the clean technology manufacturing ITC), businesses will have to meet certain labour requirements – prevailing wage requirements and apprenticeship requirements. Otherwise, the credit rate will be reduced by 10 percentage points.

Exemptions will apply for acquisitions of off-road zero-emission vehicles and acquisitions and installations of low-carbon heat equipment.

Clean electricity ITC

A new 15% refundable tax credit, the clean electricity investment tax credit has been proposed, to support eligible entities that make eligible investments to accelerate the supply and transmission of clean electricity. The credit would be available as of the day of the federal budget 2024, for projects that did not begin construction before March 28, 2023. The credit would not be available after 2034. The Department of Finance will engage with provinces, territories, and other relevant parties to develop the design and implementation details of the credit.

Clean hydrogen ITC

A new refundable tax credit, the clean hydrogen investment tax credit, has been proposed to support investments in clean hydrogen production. The credit is equal to between 15% and 40% of the cost of purchasing and installing eligible property used in the eligible project, depending on the carbon intensity (CI) of the production process. Processes with the lowest carbon intensity [measured as kilograms of carbon dioxide equivalent (CO2eq) per kilogram of hydrogen produced] would earn the highest rate. The credit would not apply when the carbon intensity is 4.0 kg or more. The credit would apply to property that is acquired and that becomes available for use after March 27, 2023. It would be reduced by half for property that becomes available for use in 2034 and would not apply after 2034.

Clean technology ITC

A new refundable clean technology investment tax credit has been introduced. The credit is equal to 30% of the capital cost of eligible clean technology property that is acquired and that becomes available for use after March 27, 2023, and before 2034. The rate will be reduced to 15% in 2034 and nil after 2034. Qualifying equipment includes certain zero-emission power generation technologies (including concentrated solar energy equipment and small modular nuclear reactors), storage equipment for zero-emission energy and non-road zero-emission vehicles. Geothermal energy systems are also generally included, unless they are used for geothermal energy projects that will co-produce oil, gas or other fossil fuels.

Clean technology manufacturing ITC

A refundable investment tax credit for clean technology manufacturing and processing, and critical mineral extraction and processing has been proposed. The clean technology manufacturing investment tax credit would be equal to 30% of the capital cost of eligible property associated with eligible activities. Eligible property would generally include machinery and equipment, including certain industrial vehicles, used in manufacturing, processing, or critical mineral extraction, as well as related control systems. The credit would not be available for property used in the production of battery cells or modules if such production benefits from direct support through a Special Contribution Agreement with the Government of Canada.

The credit would apply to property that is acquired and that becomes available for use after 2023. It would be gradually phased out starting with property that becomes available for use in 2032 as follows: 30% in 2024 to 2031, 20% in 2032, 10% in 2033, and 5% in 2034. The credit would no longer be in effect for property that becomes available for use after 2034.

CCUS ITC

New design details were added to the credit regarding:

• the expansion of eligible equipment
• the addition of British Columbia as an eligible jurisdiction
• the validation of concrete storage requirement
• the treatment of refurbishment costs
• the recovery of refurbishment investment tax credits
• the reporting of knowledge sharing and climate risk disclosure

These measures apply to eligible expenses incurred after 2021 and before 2041.

Dividend received deduction by financial institution

The dividend received deduction will be denied for dividends received after 2023 by financial institutions on shares that are mark-to-market property or tracking property. It was later announced that, as an exception, this measure will not apply to dividends received on taxable preferred shares (as defined in the Income Tax Act).

Flow-through shares and critical mineral exploration tax credit – Lithium from brines

Eligible expenses related to lithium from brines made on or after March 28, 2023, qualify as Canadian exploration expenses and Canadian development expenses. The eligibility to the critical mineral exploration tax credit is expanded to include this mineral resource.

General anti-avoidance rule (GAAR)

The GAAR rule will be amended by:

• introducing a preamble namely to address interpretative issues
• lowering the avoidance transaction standard
• introducing an economic substance rule
• introducing a 25% penalty
• extending the reassessment period by three years

Income tax treatment of credit unions

The definition of credit union under the Income Tax Act is modified. Under the previous legislation, a credit union that did not earn all or substantially all (generally 90% or more) of its revenues from sources specified in the definition could have been excluded from the definition. This condition is removed effective January 1, 2016.

Part II.2 tax on repurchases of equity

For transactions that occur after 2023, a corporate-level 2% tax has been introduced that will apply on the net value of all types of share repurchases by:

• a corporation resident in Canada (other than a mutual fund corporation) whose shares are listed on a designated stock exchange at any time in the tax year
• a trust whose units are listed on a designated stock exchange at any time in the tax year and that is one of the following:
  • a real estate investment trust
  • a specified investment flow-through (SIFT) trust
• a partnership where the partnership unit is listed on a designated stock exchange at any time in the tax year and that is a SIFT partnership
• publicly traded entities that would be SIFT trusts or SIFT partnerships if their assets were located in Canada

The tax will not apply to an entity described above in a tax year if the total fair market value of equity that is redeemed, acquired, or cancelled in that tax year (prorated for short tax years) is less than $1 million. The tax will apply for repurchases and issuances of equity that occur after 2023.

Rate reduction for zero-emission technology manufacturers

The rate reduction for zero-emission technology manufacturers has been extended by three years. The reduced rates will be 4.5% until 2031, 5.625% in 2032, 6.75% in 2033, and 7.875% in 2034 for income eligible for the small business deduction. For other eligible income, the reduced rates will be 7.5% until 2031, 9.375% in 2032, 11.25% in 2033, and 13.125% in 2034. These new measures will be fully phased out for tax years starting after 2034.

For tax years starting after 2023, eligible activities that qualify for the reduced tax rates will be expanded to include the following nuclear manufacturing and processing activities: 

• manufacturing of nuclear energy equipment
• processing or recycling of nuclear fuels and heavy water
• manufacturing of nuclear fuel rods

Underused housing tax (UHT)

[2023-03-27 News release]

Although the deadline for filing the UHT return and paying the UHT payable is still April 30, 2023, no penalties or interest will be applied for UHT returns and payments that the CRA receives before November 1, 2023.

Zero-emission passenger vehicles

[2022-12-16 News release]

For zero-emission passenger vehicles (new and used) acquired on or after January 1, 2023, the prescribed amount is increased from $59,000 to $61,000, before sales tax. The previous increase was from $55,000 to $59,000, effective January 1, 2022.

Mandatory disclosure rules

[2022-11-03 News release]

In order to fully assess the feedback received as part of the public consultation on mandatory disclosure rules launched August 9, 2022, the government intends to delay the coming into force date of the reporting requirements for reportable transactions and notifiable transactions until the date on which a bill implementing these changes receives royal assent. The coming into force date for uncertain tax treatments would remain the same as described in August (that is, tax years beginning after 2022, with penalties only applying after royal assent). For more information, see Mandatory disclosure rules – Overview.

2023 – Provinces and territories

Atlantic provinces – Carbon taxation

New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island are subject to the federal carbon backstop for carbon taxation since July 1, 2023.

British Columbia

[2023-02-28 Budget]

British Columbia farmers' food donation tax credit – This credit, which was set to end December 31, 2023, has been extended three years to December 31, 2026.

British Columbia interactive digital media tax credit – This credit, which was set to end August 31, 2023, has been extended five years to August 31, 2028.

Manitoba

[2023-03-07 Budget]

Manitoba green energy equipment tax credit – This credit, which was set to end June 30, 2023, is now permanent.

Manitoba interactive digital media tax credit – Effective April 1, 2023, the eligible expenditures are expanded to allow for more flexible forms of employee compensation and incentives as eligible labour expenditures for this credit. This does not include labour expenditures such as bonuses tied to profits or revenues, stock options or signing bonuses, which are still not eligible. 

New Brunswick

[2023-03-21 Budget]

New Brunswick – Carbon taxation – The province has opted to adopt the federal carbon backstop for carbon taxation effective July 1, 2023. Previously, the province had applied its own approach to carbon taxation.

Newfoundland and Labrador

[2023-04-20 Regulation 31/23]

Newfoundland and Labrador all-spend film and video production tax credit – Effective April 7, 2022, a new all-spend film and video production tax credit has been introduced. The 40% tax credit applies to total eligible production costs, with a maximum credit of $10 million for an eligible production in a tax year.

Nova Scotia

[2023-02-22 Regulation 44/2023]

Nova Scotia capital investment tax credit – Effective October 1, 2022, the maximum aggregate amount of tax credits that can be claimed by a corporation for an approved project is increased from $30 million to $100 million.

Ontario

[2023-03-23 Budget]

Ontario film and television tax credit – Productions supported by Ontario tax credits must now provide on-screen acknowledgement of this support in their end credits. The eligibility for the credit was extended to professional film and television productions that are distributed exclusively online if eligibility requirements are met.

Ontario made manufacturing investment tax credit – A new 10% refundable corporation income tax credit has been introduced for qualifying investments of up to $20 million a tax year made by eligible corporations, for a maximum credit of $2 million a year. This applies to investments made after March 22, 2023, or before for buildings meeting specific criteria. Qualifying investments are expenditures for certain capital property included in capital cost allowance class 1 or 53. Eligible corporations are Canadian-controlled private corporations that have a permanent establishment in Ontario. 

Ontario production services tax credit – Productions supported by Ontario tax credits must now provide on-screen acknowledgement of this support in their end credits. The eligibility for the credit was extended to professional film and television productions that are distributed exclusively online if eligibility requirements are met. Effective November 15, 2022, expenditures for leasing real property in Ontario for on-location filming no longer must meet the "ordinarily engaged in" requirement for eligible tangible property expenditures. Expenditures must be reasonable in the circumstances and paid to an arm's length party. The maximum eligible expenditures for leasing real property for on-location filming is 5% of the production's qualifying production expenditures, net of these location costs.

Ontario small business deduction – Ontario paralleled the federal change in the small business deduction phase-out, first announced in the 2022 federal budget. The deduction will not be reduced to nil until a Canadian-controlled private corporation and its associated corporations have a combined taxable capital of $50 million. This change is effective for tax years starting after April 6, 2022. 

Yukon

[Yukon Carbon Price Rebate Amendments Act (2022) – Royal assent 2022-10-24]

Yukon carbon rebate – Starting in 2023, the Yukon business carbon price rebate also includes the mining business carbon price rebate.