Bill C-15: Key tax changes businesses & individuals should know

Bill C-15 which includes measures from the 2025 Federal Budget, the 2024 Fall Economic Statement, and other draft legislation has passed the House of Commons and is now with the Senate. The legislation is expected to become law soon.

Below are some key tax measures relevant to Canadian business and individuals:

SR&ED Program Enhancements & Tax Credit Program Updates

(Applies to expenditures after December 16, 2024)

• The annual expenditure limit for the 35% refundable ITC increases to $6 million.
• Eligibility has expanded for Canadian public corporations and reinstatement of capital expenditures as eligible costs.
• New and expanded refundable credits for clean electricity, technology, manufacturing, and CCUS investments.
• Mineral Exploration Tax Credit extended to agreements before March 31, 2027, with an expanded list of eligible minerals.

Contact our SR&ED advisors for more information.

General Tax Matters

Alternative Minimum Tax (AMT) Changes
(Applies to tax years beginning after 2023)

• Deduction for investment counsel and management fees limited to 50% for AMT purposes.
• Note it is unclear if we will see re-assessments related to this change. 

Accelerated CCA and Immediate Expensing
(Applies to property acquired after April 15, 2024 / January 1, 2025)

• The Accelerated Investment Incentive is reinstated for eligible property acquired after 2024.
• Immediate expensing for certain classes.
• Increased CCA rates for new residential rental buildings and a temporary CCA rate increase for purpose built residential rentals

Trust and Estate Measures
(Primarily affecting years ending after December 30, 2026)

• Amendments to trust reporting requirements.
• Extension of the capital loss carryback period for Graduated Rate Estates (GREs).
• Technical changes to Employee Ownership Trust (EOT) rules.

Intergenerational Business Transfers

(Effective January 1, 2024)
Additional clarification has been introduced regarding transfers of businesses to children or family members:

• A child or member of the child group must be actively involved in the business on a regular, continuous, and substantial basis.
• This does not necessarily require working 20 hours per week, depending on the business circumstances.
• Elections for immediate or gradual intergenerational transfers can now be extended, amended, or revoked.

Contact our Business Transition Consulting team for more information.

Other Canadian Tax Changes

• The Underused Housing Tax (UHT) has been repealed for 2025 and later years.
• The Digital Services Tax (DST) has been repealed retroactively to June 20, 2024.
• Updates to the Excessive Interest and Financial Expense Limitation (EIFEL) rules with respect to loss carryforwards and including interest paid to financial institution group entity in the definition of excluded insurance.

International Tax Matters

Transfer Pricing Reform
(Applies to years beginning after November 4, 2025)

• Section 247 has been overhauled to align with OECD Guidelines, introducing a delineation-first approach and expanded documentation requirements.
• Transfer pricing documentation must now be available within 30 days of request.

FAPI and CCPCs
(Applies to years beginning after 2024)

• Relevant tax factor is reduced to 1.9, and a new elective “foreign accrual business income” regime is introduced.

Other International Tax Changes

• Changes to GRIP and CDA to integrate the taxation of distributions from foreign affiliates generated from certain types of earnings.
• Withholdings for non-resident services providers may be waived in certain situations.
• Aligning the taxation of investment income of controlled foreign affiliates with rules that currently apply to investment income earned directly by Canadian Controlled Private Corporations.

Our team of tax advisors is here to answer any questions in regard to these recent updates. Contact us today.