The 66-page NWMM (and 43-page Explanatory Notes) sets out selected measures announced in the 2017 budget as draft legislation. It contains most of the budget's personal tax measures and GST/HST changes. Notably, however, most of the budget's corporate tax measures have not been included in the draft legislation.
The NWMM does not include any new information on the 2017 federal budget's proposed review of tax planning for private corporations.
The NWMM was tabled as Bill C-44 on April 11, 2017. Since Bill C-44 received first reading on April 11, 2017, the corporate tax measures that it introduces are considered to be substantively enacted for purposes of IFRS and ASPE as of this date (as Canada has a majority Liberal government).
Included in the NWMM
Corporate tax measures
2017 federal budget corporate tax measures within the NWMM include:
- The elimination of the additional deduction for corporations regarding gifts of medicine to charities
- The elimination of the investment tax credit for the creation of child care spaces
- The elimination of a tax exemption for farming and fishing property insurers
- Measures concerning the electronic distribution of T4 information slips.
Personal tax measures
The 2017 federal budget personal measures in the NWMM include:
- Elimination of the public transit tax credit
- Introduction of a new Canada Caregiver Credit to replace the existing caregiver credit, infirm dependant credit and family caregiver tax credit
- An extension of the eligibility criteria for the 15% tuition tax credit
- An extension of the mineral exploration tax credit for flow-through share investors
- The elimination of the deduction for eligible home relocation loans
- Measures allowing certain fertility expenses to qualify for the medical expense tax credit
- Measure to authorize nurse practitioners to certify eligibility for the disability tax credit
- Changes to Members of Legislative Assemblies' and municipal officers' expense allowances
- A measure to amend the Budget Implementation Act, 2016, No. 1 to delay the repeal of the National Child Benefit supplement reference in the Canada Child Benefit rules until July 1, 2018.
The GST/HST measures in the NWMM include:
- Changes to the definition of taxi business to include ride sharing services
- Repeal of the GST/HST rebate available to non-residents for tour package accommodations
- Restoring GST/HST zero-rated treatment of Naloxone
- Increases to the excise duty rates on alcohol products and adjustments to these rates based on the Canadian Consumer Price Index
- Elimination of the 10.5% tobacco manufacturers' surtax
- Adjusts the excise duty rates on tobacco products
- Proposed changes to the Special Import Measures Act.
Not included in the NWMM
The NWMM does not contain the following corporate measures that were included in the 2017 budget:
- Changes to the meaning of factual control
- Introduction of an elective mark-to-market regime for derivatives held on income account
- Introduction of a new anti-avoidance rule to target straddle transactions that allow taxpayers to selectively realize gains and losses on derivatives
- Extension of the ability to reorganize on a tax-deferred basis to switch fund corporations and segregated funds in certain circumstances
- Changes to the investment in specified clean energy generation and conservation equipment under capital cost allowance regime
- The reclassification of expenses renounced to flow-through share investors
- The reclassification of expenditures related to drilling or completing a discovery well as Canadian Development Expenses
- Elimination of the ability to elect to use billed-basis accounting
- The proposed consultation on income tax deferral available on deferred cash purchase tickets for deliveries of listed grains
- Extension of the base erosion rules to foreign branches of life insurers.
Regarding personal tax measures, the NWMM does not include the new anti-avoidance rules for registered plans, which were included in the 2017 federal budget and the proposed changes to the ecological gifts program.
A Customs measure that was proposed in the 2017 federal budget but not contained in the NWMM, refers to proposed changes to the rules of origin for "least developed" countries under Canada's tariff regime.
The NWMM [PDF 600KB] and Explanatory Notes [373KB] are available on the Department of Finance website.
For more information, contact your KPMG adviser.
Information is current to April 11, 2017. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500