Finance Canada Releases Draft Legislation for Tax Measures Including Investment Tax Credits, a Global Minimum Tax, EIFEL Rules, and more.

Today the Department of Finance Canada released draft legislative proposals for several tax measures included in Budget 2023 and launched consultations to solicit feedback.

Legislative proposals were released for the following tax measures:  

• The Carbon Capture, Utilization and Storage (CCUS) Investment Tax Credit. 
• The Clean Technology Investment Tax Credit. 
• Labour Requirements Related to Certain Investment Tax Credits. 
• Enhancing the Reduced Tax Rates for Zero-Emission Technology Manufacturers.  
• Flow-Through Shares and the Critical Mineral Exploration Tax Credit – Lithium from Brines. 
• Global Minimum Tax (Pillar Two). 
• Technical amendments to Goods and Services Tax / Harmonized Sales Tax (GST/HST) rules for financial institutions; and,  
• Excessive Interest and Financing Expenses Limitations (EIFEL).  

The government’s press release indicates that draft legislation for the Clean Hydrogen Investment Tax Credit will be released as soon as possible, expected in the Fall.

The full set of draft legislative proposals and explanatory documents can be found here.  

NEXT STEPS

The consultation period will be open from now until September 8, 2023, except for feedback on the proposed Global Minimum Tax which will remain open until September 29, 2023.  

It is expected that legislative proposals for the tax measures being consulted will be included in the Budget Implementation Act II (BIA II), which the government will introduce in Parliament once the fall session commences in late-September. The government will aim to have BIA II passed through both the House and the Senate and into law before the end of the year.  

The government has asked for feedback from all relevant and interested stakeholders, including organizations, industry, associations, and Indigenous groups, and is asking for submissions to be emailed to the general inbox of consultation-legislation@fin.gc.ca. We are of course happy to help with the preparation of submissions as well as dissemination to decision-makers and influencers within government.