Budget 2025 Implementation Act, No. 1 (S.C. 2026, c. 3)
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Assented to 2026-03-26
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
C.R.C., c. 945Income Tax Regulations
98 (1) Subparagraph (j.1)(i) of the definition remuneration in subsection 100(1) of the Income Tax Regulations is replaced by the following:
(i) the particular payment is in respect of the minimum amount (determined in accordance with subsection 146.3(1), (1.6) or (1.7) of the Act, as the case may be) under the fund for a year, or
(2) Subsection (1) comes into force on January 1, 2027.
99 (1) Paragraph 103(6)(d.1) of the Regulations is replaced by the following:
(d.1) a payment made during the lifetime of an annuitant referred to in the definition annuitant in subsection 146.3(1) of the Act under a registered retirement income fund of that annuitant, other than a payment to the extent that it is in respect of the minimum amount (determined in accordance with subsection 146.3(1), (1.6) or (1.7) of the Act, as the case may be) under the fund for a year,
(2) Subsection (1) comes into force on January 1, 2027.
100 (1) The portion of subsection 204.2(1) of the Regulations before paragraph (b) is replaced by the following:
204.2 (1) Every trust, other than a trust described in any of paragraphs 150(1.2)(a) to (q) of the Act, that is required to file a return of income under subsection 150(1) of the Act, shall provide information that includes the name, address, date of birth (in the case of an individual other than a trust), jurisdiction of residence and TIN (as defined in subsection 270(1) of the Act) for each person or partnership who, in the year,
(a) is a trustee, beneficiary (subject to subsection (2)) or settlor of the trust; or
(2) The portion of subsection 204.2(1) of the Regulations before paragraph (a), as amended by subsection (1), is replaced by the following:
204.2 (1) Every trust, other than a trust described in any of paragraphs 150(1.2)(a) to (r) of the Act, that is required to file a return of income under subsection 150(1) of the Act, shall provide information that includes the name, address, date of birth (in the case of an individual other than a trust), jurisdiction of residence and TIN (as defined in subsection 270(1) of the Act) for each person or partnership who, in the year,
(3) Subsection 204.2(2) of the Regulations is amended by adding the following after paragraph (b):
(b.1) the trustee of the trust is a public guardian and trustee authorized under a law of Canada or a Province who, as trustee, who is acting in their capacity as public guardian and trustee, including acting as trustee of a trust pursuant to an order of a court;
(4) Subsection 204.2(2) of the Regulations is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) in respect of a trust that is an alter ego trust or a joint spousal or common-law partner trust, the person making the return provides the required information regarding the beneficiaries of the trust, other than those beneficiaries who are beneficiaries under the trust solely because of a right of the person to receive any of the trust’s income or capital, if under that right the person may so receive that income or capital only on or after the death after that time of an individual.
(5) Section 204.2 of the Regulations is amended by adding the following after subsection (2):
(3) For the purpose of subsection (1), a settlor of a trust at any time means any person or partnership that has directly or indirectly, in any manner whatever, transferred property to the trust at or before that time, other than a transfer made by the person or partnership to the trust for fair market value consideration or pursuant to a legal obligation to make the transfer.
(6) Subsections (1), (3) and (5) apply to taxation years that end after December 30, 2024.
(7) Subsections (2) and (4) apply to taxation years that end after December 30, 2025.
101 (1) Paragraph 600(b) of the Regulations is replaced by the following:
(b) subsections 13(4), (7.4) and (29), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 91(1.4), 93.4(2) to (5), 104(14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3), 251.2(6) and 256(9) of the Act;
(2) Paragraph 600(c) of the Regulations is replaced by the following:
(c) paragraphs 12(2.2)(b), (e) of the definition excluded interest and (b) of the definition specified pre-regime loss in subsection 18.2(1), 66.7(7)(c), (d) and (e) and (8)(c), (d) and (e), 80.01(4)(c), 86.1(2)(f) and 128.1(4)(d), (6)(a) and (c), (7)(d) and (g) and (8)(c) of the Act;
(c.1) subclause 95(2)(f.11)(ii)(E)(III) of the Act; and
(3) Paragraph 600(c) of the Regulations, as enacted by subsection (2), is replaced by the following:
(c) paragraphs 12(2.2)(b), (e) of the definition excluded interest and (b) of the definition specified pre-regime loss in subsection 18.2(1), 66.7(7)(c), (d) and (e) and (8)(c), (d) and (e), 80.01(4)(c), 84.1(2.31)(h) and (2.32)(i), 86.1(2)(f), 110.61(1)(e), 110.62(1)(e) and 128.1(4)(d), (6)(a) and (c), (7)(d) and (g) and (8)(c) of the Act;
(4) Subsection (1) applies to taxation years that begin after 2025. Subsection (1) also applies to preceding taxation years if an election is filed under subsection 93.4(4) or (5) of the Act.
(5) Subsection (2) is deemed to have come into force on October 1, 2023.
(6) Subsection (3) is deemed to have come into force on January 1, 2024.
102 (1) The heading “Property Dispositions” before section 1000 and sections 1000 and 1000.1 of the Regulations are repealed.
(2) Subsection (1) applies to taxation years of individuals who died on or after August 12, 2024.
103 (1) Subsection 1100(1) of the Regulations is amended by adding the following after paragraph (a.3):
(a.4) if a separate class is prescribed by subsection 1101(1ac.1) for a property of a taxpayer that is a new purpose-built residential rental throughout the taxation year, such amount as the taxpayer may claim not exceeding six per cent of the undepreciated capital cost to the taxpayer of the property of that class as of the end of the taxation year (before making any deduction under this subsection for the taxation year);
(2) The portion of clause 1100(1)(b)(i)(A) of the Regulations before subclause (I) is replaced by the following:
(A) if the property is either an accelerated investment incentive property and the capital cost of the property was incurred before 2024, or a reaccelerated investment incentive property and the capital cost of the property was incurred before 2030, the lesser of
(3) Clause 1100(1)(b)(i)(B) of the Regulations is replaced by the following:
(B) if the property is neither an accelerated investment incentive property nor a reaccelerated investment incentive property and is not described in any of subparagraphs (b)(iii) to (v) of the description of F in subsection (2), 50 per cent of the amount for the year calculated in accordance with Schedule III, and
(4) Subparagraph 1100(1)(c)(i) of the Regulations is amended by striking out “and” at the end of clause (A) and by adding the following after clause (B):
(C) if the property is reaccelerated investment incentive property, the portion of the amount determined under clause (A) that is in respect of the property multiplied by
(I) 0.5, if the property becomes available for use in the year and before 2030, and
(II) 0.25, if the property becomes available for use in the year and after 2029, and
(5) Clause 1100(1)(v)(iv)(A) of the Regulations is replaced by the following:
(A) 50 per cent, in the case of an accelerated investment incentive property acquired in the year and before 2024 or a reaccelerated investment incentive property acquired in the year and before 2030,
(6) Subclause 1100(1)(v)(iv)(B)(I) of the Regulations is replaced by the following:
(I) accelerated investment incentive property or reaccelerated investment incentive property, and
(7) The portion of the first formula in subsection 1100(2) of the Regulations before the description of A is replaced by the following:
A(B) + A.1(B.1) − 0.5(C)
where
(8) The portion of the description of A in subsection 1100(2) of the Regulations before paragraph (a) is replaced by the following:
- A
- is, in respect of property of the class that became available for use by the taxpayer in the taxation year and that is accelerated investment incentive property or property acquired before 2025 that is included in any of Classes 54 to 56,
(9) Paragraph (a) of the description of A in subsection 1100(2) of the Regulations is replaced by the following:
(a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15, 43.1, 43.2, 53, 54, 55, 56 and 59 or in Class 43 in the circumstances described in paragraph (d),
(i) 1/2, for property that became available for use by the taxpayer before 2024, and
(ii) nil, for property that became available for use by the taxpayer after 2023,
(10) Subparagraph (a)(ii) of the description of A in subsection 1100(2) of the Regulations, as enacted by subsection (9), is replaced by the following:
(ii) nil, for property that became available for use by the taxpayer after 2023 (other than property referred to in any of paragraphs (c.1) to (c.3)),
(11) The description of A in subsection 1100(2) of the Regulations is amended by adding the following after paragraph (c):
(c.1) if the class is Class 44,
(i) 3, for property that was acquired and became available for use by the taxpayer after April 15, 2024 and before 2027, and
(ii) nil, for property that became available for use by the taxpayer after 2026,
(c.2) if the class is Class 46,
(i) 2 1/3, for property that was acquired and became available for use by the taxpayer after April 15, 2024 and before 2027, and
(ii) nil, for property that became available for use by the taxpayer after 2026,
(c.3) if the class is Class 50,
(i) 9/11, for property that was acquired and became available for use by the taxpayer after April 15, 2024 and before 2027, and
(ii) nil, for property that became available for use by the taxpayer after 2026,
(12) Subsection 1100(2) of the Regulations is amended by adding the following after the description of A:
- A.1
- is, in respect of property of the class that became available for use by the taxpayer in the taxation year and that is reaccelerated investment incentive property or property acquired after 2024 that is included in any of Classes 54 to 56,
(a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15, 43.1, 44, 46, 50, 53, 54, 55, 56 and 59 or in Class 43 in the circumstances described in paragraph (f),
(i) 1/2, for property that became available for use by the taxpayer before 2030, and
(ii) nil, for property that became available for use by the taxpayer after 2029,
(b) if the class is Class 43.1,
(i) 2 1/3, for property that became available for use by the taxpayer before 2030,
(ii) 1 1/2, for property that became available for use by the taxpayer in 2030 or 2031, and
(iii) 5/6, for property that became available for use by the taxpayer after 2031,
(c) if the class is Class 44,
(i) 3, for property that became available for use by the taxpayer before 2027, and
(ii) nil, for property that became available for use by the taxpayer after 2026,
(d) if the class is Class 46,
(i) 2 1/3, for property that became available for use by the taxpayer before 2027, and
(ii) nil, for property that became available for use by the taxpayer after 2026,
(e) if the class is Class 50,
(i) 9/11, for property that became available for use by the taxpayer before 2027, and
(ii) nil, for property that became available for use by the taxpayer after 2026,
(f) if the property is included in Class 53 or — for property acquired after 2025 — is included in Class 43 and would have been included in Class 53 if it had been acquired in 2025,
(i) 1, for property included in Class 53,
(ii) 2 1/3, for property included in Class 43 that became available for use by the taxpayer before 2030,
(iii) 1 1/2, for property included in Class 43 that became available for use by the taxpayer in 2030 or 2031,
(iv) 5/6, for property included in Class 43 that became available for use by the taxpayer after 2031,
(g) if the class is Class 54 or Class 56,
(i) 2 1/3, for property that became available for use by the taxpayer before 2030,
(ii) 1 1/2, for property that became available for use by the taxpayer in 2030 or 2031, and
(iii) 5/6, for property that became available for use by the taxpayer after 2031,
(h) if the class is Class 55,
(i) 1 1/2, for property that became available for use by the taxpayer before 2030,
(ii) 7/8, for property that became available for use by the taxpayer in 2030 or 2031, and
(iii) 3/8, for property that became available for use by the taxpayer after 2031, and
(i) in any other case, nil;
(13) The description of D in subsection 1100(2) of the Regulations is replaced by the following:
- D
- is the total of all amounts, if any, each of which is an amount included in the description of A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property of the class that became available for use by the taxpayer in the taxation year and that is accelerated investment incentive property or property acquired before 2025 that is included in any of Classes 54 to 56, and
(14) Subsection 1100(2) of the Regulations is amended by striking out “and” at the end of the description of B and by adding the following after the description of B:
- B.1
- is the amount determined, in respect of the class, by the formula
D.1 − E.1
where
- D.1
- is the total of all amounts, if any, each of which is an amount included in the description of A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property of the class that became available for use by the taxpayer in the taxation year and that is reaccelerated investment incentive property or property acquired after 2024 that is included in any of classes 54 to 56, and
- E.1
- is the amount, if any, by which the amount determined for G exceeds the amount determined for F; and
(15) Subparagraph (a)(i) of the description of F in subsection 1100(2) of the Regulations is replaced by the following:
(i) because of element A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property (other than accelerated investment incentive property or reaccelerated investment incentive property) that was acquired, or became available for use, by the taxpayer in the taxation year, or
(16) Subsection 1100 of the Regulations is amended by adding the following after subsection (2.01):
Marginal note:Straddle years — reaccelerated investment incentive property
(2.011) For the purposes of subsection (2),
(a) if a taxation year begins in 2029 and ends in 2030, the factor determined for A.1 in subsection (2) (other than for the purposes of paragraphs (c), (d) and (e) of the description of A.1 in subsection (2)) is to be replaced by the factor determined by the formula
(A(B) + C(D))/(B + D)
where
- A
- is the factor otherwise determined for A.1 in subsection (2) for 2029,
- B
- is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2029,
- C
- is the factor otherwise determined for A.1 in subsection (2) for 2030, and
- D
- is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2030;
(b) for the purposes of paragraphs (c), (d) and (e) of the description of A.1 in subsection (2), if a taxation year begins in 2026 and ends in 2027, the factor determined for A.1 in subsection (2) is to be replaced by the factor determined by the formula
(A(B) + C(D))/(B + D)
where
- A
- is the factor otherwise determined for A.1 in subsection (2) for 2026,
- B
- is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2026,
- C
- is the factor otherwise determined for A.1 in subsection (2) for 2027, and
- D
- is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2027; and
(c) if a taxation year begins in 2031 and ends in 2032, the factor determined for A.1 in subsection (2) is to be replaced by the factor determined by the formula
(A(B) + C(D))/(B + D)
where
- A
- is the factor otherwise determined for A.1 in subsection (2) for 2031,
- B
- is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2031,
- C
- is the factor otherwise determined for A.1 in subsection (2) for 2032, and
- D
- is the amount that would be determined for D.1 in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2032.
(17) Section 1100 of the Regulations is amended by adding the following after subsection (2.02):
Marginal note:Expenditures excluded from D.1
(2.021) For the purposes of subsection (2), in respect of property of a class in Schedule II that is reaccelerated investment incentive property of a taxpayer solely because of subparagraph 1104(4.01)(b)(i),
(a) amounts incurred by any person or partnership in respect of the property are not to be included in determining the amount for D.1 in subsection (2) in respect of the class
(i) if the amounts are incurred before 2025, unless
(A) the property was acquired after 2024 by a person or partnership from another person or partnership (referred to in this subparagraph as the “transferee” and the “transferor”, respectively),
(B) the transferee was either
(I) the taxpayer, or
(II) a person or partnership that does not deal at arm’s length with the taxpayer, and
(C) the transferor
(I) dealt at arm’s length with the transferee, and
(II) held the property as inventory, and
(ii) if the amounts are incurred after 2024 and amounts are deemed to have been deducted under paragraph 20(1)(a) or subsection 20(16) of the Act, in respect of those amounts incurred, under paragraph 1104(4.11)(b); and
(b) any amount excluded from the amount determined for D.1 in subsection (2) in respect of the class because of paragraph (a) is to be included in determining the amount for F in subsection (2) in respect of the class, unless no amount in respect of the property would be so included if the property were not reaccelerated investment incentive property of the taxpayer.
(18) Subsection (1) is deemed to have come into force on April 16, 2024.
(19) Subsections (2) to (8) and (12) to (17) are deemed to have come into force on January 1, 2025.
(20) Subsection (9) applies to property acquired after 2021.
(21) Subsections (10) and (11) apply to property that is acquired and becomes available for use after April 15, 2024.
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