Government consults Canadians on Budget 2024 measures to deliver fairness for every generation

August 12, 2024 - Ottawa, Ontario - Department of Finance Canada

Budget 2024 is part of the federal government’s plan to deliver generational fairness by unlocking the door to a good middle class life for younger Canadians and drive economic growth for workers in a way that lifts up all Canadians.

Today, the federal government is moving forward with consultations to advance key budget priorities to build more homes, boost economic growth, improve tax fairness, and ensure Canada’s financial sector works for all Canadians.

The Department of Finance Canada is consulting on budget priorities including:

Measures to Build More Homes

• Removing the GST for co-operative housing built for the long-term rental market;
• Incentivizing more rental housing construction through a new 10 per cent Accelerated Capital Cost Allowance, for projects beginning construction on or after April 16, 2024, and before January 1, 2031, and completed by January 1, 2036; and,
• Modifying mortgage insurance rules to make it easier for Canadians to add secondary suites to their homes.

Measures to Boost Economic Growth

• Encouraging entrepreneurship by creating the Canadian Entrepreneurs’ Incentive to reduce the inclusion rate to one-third on a lifetime maximum of $2 million in eligible capital gains;
• Delivering the Clean Electricity investment tax credit;
• Expanding eligibility for the Clean Technology investment tax credit and the Clean Electricity investment tax credit to support the use of waste biomass to generate heat and electricity;
• Further supporting investments in critical minerals through updates to the Clean Technology Manufacturing investment tax credit; and,
• Helping Canadian businesses invest in innovation and productivity enhancing assets, such as IT infrastructure, with a new Accelerated Capital Cost Allowance, available for investments made by January 1, 2027.

Measures to Improve Tax Fairness

• Increasing the capital gains inclusion rate from one-half to two-thirds on capital gains realized annually above $250,000 for Canadians and on all capital gains realized by corporations and most types of trusts, as of June 25, 2024;
• Increasing the Lifetime Capital Gains Exemption from $1 million to $1.25 million, as of June 25, 2024;
• Helping employees become owners by exempting from taxation the first $10 million in capital gains realized on the sale of a business to an eligible Employee Ownership Trust or Worker Co-operative;
• Ensuring that large, multinational corporations pay their fair share, by introducing the Undertaxed Profits Rule, which implements a minimum effective tax rate of 15 per cent on their profits wherever they do business;
• Providing exemptions from the Excessive Interest and Financing Expenses Limitation rules for purpose-built rental housing providers and regulated utility providers serving Canadians;
• Amending the Alternative Minimum Tax rules to further incentivize investment in Canada’s mining sector by allowing Canadians to fully claim resource expense deductions – a measure that would support good jobs and ensure Canada’s mining sector can continue to thrive;
• Ensuring Canadians who rent a home are not held responsible for their non-resident landlords’ unpaid taxes; and,
• Clarifying bare trust reporting rules to significantly reduce the number of Canadians with bare trusts who would have to file, and ease the related administrative burden.

Measures to Ensure Canada’s Financial Sector Works for All Canadians

• Providing Canadians with safe and secure access to innovative financial tools, such as reporting on-time rent payments to improve credit scores, by establishing Canada’s Consumer-Driven Banking Framework;
• Protecting Canadians from predatory lenders by strengthening the Criminal Code; and,
• Advancing the next phase of the financial institutions’ statutes review.

Share Your Feedback

The government invites all interested Canadians and stakeholders to email their comments to consultation-legislation@fin.gc.ca by September 11, 2024, unless otherwise indicated below.

The Capital Gains Inclusion Rate and Lifetime Capital Gains Exemption consultation will remain open until September 3, 2024. These measures build upon the Ways and Means Motion tabled on June 10, 2024, as well as the accompanying backgrounder entitled “Capital Gains Inclusion Rate” published on the same day.

Submissions on the following measures should be sent to the respective address:

• Secondary Suites: consultation-housing-logement@fin.gc.ca
• Canada’s Consumer-Driven Banking Framework: obbo@fin.gc.ca
• Protecting Canadians from Predatory Lending: consultationconsumeraffairs.consultationconsommation@fin.gc.ca
• Financial Institutions’ Statutes Review: legreview-examenleg@fin.gc.ca

References to “Announcement Date” in all draft proposals and explanatory notes refer to today’s release date.