Corporate Tax Rates and Legislation: Q2 2024 Accounting status

Legislative changes — April 1 to June 30, 2024

Legislative developments from April 1 to June 30, 2024, that affect income taxes, are outlined below.

Federal Bill C-59 (2023 federal budget and other measures)

Federal Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023, received royal assent on June 20, 2024. Bill C-59 includes legislation for many key tax measures, including:

• a 2% tax on the net value of equity repurchased by certain public corporations and other publicly listed entities
• the excessive interest and financing expenses limitation (EIFEL) regime
• the refundable investment tax credits for clean technology equipment and for carbon capture, utilization and storage
• the Digital Services Tax Act (DSTA), which came into force on June 28, 2024 (see “Status” below for more information)*

For more information, see our Tax Insights:

• “Bill C-59 introduces EIFEL, environmental incentives, digital services tax, GAAR changes and more” (June 21, 2024 update)
• “Bill C-59: Excessive interest and financing expenses limitation (EIFEL) regime” (June 21, 2024 update)
• “Canada’s Digital Services Tax Act is now law: What is next and how can you prepare?”

Status: Bill C-59 is considered substantively enacted for Canadian GAAP as at May 28, 2024, and enacted for US GAAP as at June 20, 2024 (see Table 1 below for Bill C-59’s status). However, note that the coming into force of the Digital Services Tax Act will require the additional step of an order of the Governor in Council, the timing of which is uncertain. However, note that the coming into force of the DSTA required the additional step of an order of the Governor in Council; an Order in Council dated June 28, 2024 fixes that same day as the coming into force of the DSTA.*

* The text in bold was updated post-publication to reflect that the DSTA came into force on June 28, 2024; this information was not available at the time of publication, because the Order in Council had not yet been posted on the Orders in Council website.

2024 Federal budget

The federal government’s April 16, 2024 budget does not change general or manufacturing and processing (M&P) corporate income tax rates. Key federal budget tax measures:

• increase the capital gains inclusion rate from ½ to ⅔, for capital gains realized after June 24, 2024 by corporations (on June 10, 2024, draft legislation to implement this measure was included in a Notice of Ways and Means Motion that was tabled in the House of Commons)
• introduce an accelerated capital cost allowance (CCA) deduction of 10% for new eligible purpose-built rental projects that begin construction after April 15, 2024 and before 2031, and are available for use before 2036
• allow immediate expensing (i.e. a 100% first-year CCA deduction) for CCA class 44, 46 and 50 property acquired after April 15, 2024 and that becomes available for use before 2027
• provide design and implementation details for the clean electricity investment tax credit (ITC)
• exempt from the EIFEL rules certain interest and financing expenses incurred before 2036 relating to arm’s length financing used to build or acquire certain purpose-built rental housing located in Canada, on an elective basis
• upon royal assent of the enacting legislation:
  • allow the Canada Revenue Agency (CRA) to grant single advance waivers (from the withholding obligation on payments to non-resident service providers) that cover multiple transactions occurring over a specific time period
  • give the CRA additional information gathering powers

For more information, see our Tax Insights “2024 Federal budget: Supporting housing, raising taxes.”

Status: As at June 30, 2024, these key federal budget tax measures have not been tabled as a bill in the House of Commons and, therefore, are not considered substantively enacted for Canadian GAAP or enacted for US GAAP.

Federal Bill C-69 (2024 federal budget and other measures)

Federal Bill C-69, An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024, which includes the Notice of Ways and Means Motion tabled on April 30, 2024, was introduced for first reading on May 2, 2024 and received royal assent on June 20, 2024. Bill C-69 does not implement any of the key 2024 federal budget measures discussed above, but does:

• provide for ITCs for clean technology manufacturing and clean hydrogen (see our Tax Insights “Finance releases draft legislation for the clean hydrogen and clean technology manufacturing investment tax credits” (June 5, 2024 update)
• introduce a 15% Global Minimum Tax on large multinational corporations (see our Tax Insights “Canada releases Global Minimum Tax Act” (June 21, 2024 update)

Status: Bill C-69 is considered substantively enacted for Canadian GAAP as at June 19, 2024, and enacted for US GAAP as at June 20, 2024 (see Table 1 below for Bill C-69’s status).

Provincial/territorial budgets

The following province and territory introduced budgets from April 1 to June 30, 2024. None of these budgets announced changes to general and M&P corporate income tax rates. Visit www.pwc.com/ca/budget for key changes respecting:

• Manitoba – See our Tax Insights “2024 Manitoba budget: Tax highlights”
• Northwest Territories – No key changes

Status: As at June 30, 2024, Manitoba has tabled legislation to implement its budget measures, but none of the measures relate to general corporate income tax changes. See Table 1 below for status of legislation.

Quebec Information Bulletins

Quebec’s Ministère des Finances released the following Information Bulletins:

• 2024-4 “Harmonization with federal tax measures and adjustments to certain measures of a tax nature” (April 12, 2024)
• 2024-5 “Harmonization with certain tax measures proposed in the federal budget of April 16, 2024” (April 18, 2024)
• 2024-6 “Harmonization with certain tax measures announced in the April 16, 2024 federal budget” (May 31, 2024)
• 2024-7 “Harmonization with federal tax measures and adjustments to certain tax-related measures” (June 21, 2024)

The Information Bulletins state Quebec’s position on whether it intends to harmonize with various federal measures, including those announced in the federal government’s 2023 Fall Economic Statement (November 21, 2023) and 2024 budget (April 16, 2023), and certain measures included in federal Bill C-59 (see Table 1).

Status: As at June 30, 2024, the measures noted in the above Information Bulletins have not been tabled as a bill in the National Assembly of Québec and, therefore, are not considered substantively enacted for Canadian GAAP or enacted for US GAAP.

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Accounting updates — April 1 to June 30, 2024

There were no significant updates relating to the accounting for income tax.

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Federal and provincial/territorial bills 

Table 1 lists key bills that include corporate income tax rate changes or other income tax changes (e.g. for research and development) that were:

• tabled or received royal assent during 2024, or
• tabled before 2024, but did not receive royal assent before 2024

Table 1: Federal and provincial/territorial bills
Bolded rows indicate a change in status from April 1 to June 30, 2024.

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Corporate income tax rates—accounting status (January 1, 2021 to June 30, 2024) 

The following information excludes Canadian-controlled private corporation small business rates and thresholds.

Table 2: Corporate income tax rates—accounting status
There were no changes in status from April 1 to June 30, 2024, except for the reduced federal rates discussed in note 1 below (see bolded text).

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