Federal finance department opens draft tax system changes to public feedback

Jul 23, 2026 / Share

The Department of Finance has presented for public consultation legislative proposals for tax measures and technical tax system reforms.

The federal government said the draft amendments are intended to clarify and enhance tax rules, as well as limit tax avoidance and facilitate the effective function of current measures. The pitched measures are intended to drive investment, productivity, and clean growth as well as simplify the administration of the tax system.

• Disability tax credit reforms streamlining the application process for those suffering from long-lasting medical conditions and broadening the list of medical practitioners who can certify DTC eligibility
• Confirmation of the Red Seal Completion Bonus’ taxable status to boost apprenticeship completion rates through a one-time $5,000 bonus to apprentices seeking certification in a Red Seal trade
• Investment Tax Credit for Carbon Capture, Utilization, and Storage changes to make CO2 storage through enhanced oil recovery eligible for CCUS investment tax credit purposes at half the credit rates available for dedicated geological storage
• Reinstatement of the accelerated capital cost allowances for eligible liquefied natural gas equipment and low-carbon LNG facilities’ related buildings
• Reforms ensuring the consideration of the investment income of a foreign affiliate on assets backing Canadian insurance risk as foreign accrual property income taxable in Canada
• Amendments permitting simplified transfer pricing documentation in scenarios involving small taxpayers and partnerships, small transfers of tangible property, small intragroup services transactions, and small loans
• An reforms package tackling hybrid mismatch arrangements, implementing “Neutralising the Effects of Hybrid Mismatch Arrangements” report recommendations
• Establishment of a Goods and Services Tax/Harmonized Sales Tax reverse charge mechanism for certain supplies in the telecommunications sector, limiting carousel fraud
• “Agriculture and Fishing Property (GST/HST) Regulations” changes to incorporate agricultural quotas supplied by lease, licence, or similar arrangement as prescribed property that is zero-rated under the GST/HST
• “Federal Book Rebate (GST/HST) Regulations” amendments allowing British Columbia charity Wonderful World of Books to claim the federal printed book rebate for GST paid on printed books and certain audio recordings in its literacy promotion campaign
• Technical changes to tax statutes and related regulations like the Income Tax Act, the Excise Tax Act, the Income Tax Regulations, and the Global Minimum Tax Act to align Canada’s tax laws with underlying policy objectives

The consultation window closes on September 4. Members of the public and stakeholders may submit feedback through email to [email protected].