Fall Economic Statement Implementation Act, 2022

Part 1 implements certain measures in respect of the Income Tax Act by (a) providing that any gain on the disposition of a Canadian housing unit within a one-year period of its acquisition is treated as business income; (b) introducing a Tax-Free First Home Savings Account; (c) phasing out flow-through shares for oil, gas and coal activities; (d) introducing a new 30% Critical Mineral Exploration Tax Credit for specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors; (e) introducing the Canada Recovery Dividend under which banks and life insurers’ groups pay a temporary one-time 15% tax on taxable income above $1 billion over five years; (f) increasing the corporate income tax rate of banks and life insurers’ groups by 1.5% on taxable income above $100 million; (g) providing additional reporting requirements for trusts; (h) providing rules applicable to mutual fund trusts listed on a designated stock exchange in Canada with respect to amounts that are allocated to redeeming unitholders; (i) providing the Minister of National Revenue with the discretion to decline to issue a certificate under section 116 of the Income Tax Act in certain circumstances relating to the administration and enforcement of the Underused Housing Tax Act; (j) doubling the First-Time Homebuyers’ Tax Credit; (k) expanding the eligibility criteria for the Medical Expense Tax Credit in respect of medical expenses incurred in Canada related to surrogate mothers and donors and fees paid in Canada to fertility clinics and donor banks; (l) introducing the Multigenerational Home Renovation Tax Credit; (m) allowing access to the small business tax rate on a phased-out basis up to taxable capital of $50 million; (n) modifying the computation of income as a result of the adoption of a new international accounting standard for insurance contracts; (o) introducing a new graduated disbursement quota rate for charities; (p) providing that the general anti-avoidance rules can apply to transactions that affect tax attributes that have not yet been used to reduce taxes; (q) strengthening the rules on avoidance of tax debts; (r) modifying the calculation of the taxes applicable to registered investments that hold property that is not a qualified investment; (s) modifying the tax treatment of certain interest coupon stripping arrangements that might otherwise be used to avoid tax on cross-border interest payments; (t) clarifying the applicable rules with respect to audits by Canada Revenue Agency officials, including requiring taxpayers to give reasonable assistance and to answer all proper questions for tax purposes; and (u) extending the capital cost allowance for clean energy and the tax rate reduction for zero-emission technology manufacturers to include air-source heat pumps. It also makes related and consequential amendments to the Canada Deposit Insurance Corporation Act, the Excise Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001, Part 1 of the Greenhouse Gas Pollution Pricing Act and the Income Tax Regulations. Part 2 amends the Excise Act, 2001 and other related texts in order to implement changes to (a) the federal excise duty frameworks for cannabis and other products by, among other things, (i) permitting excise duty remittances for certain cannabis licensees to be made on a quarterly rather than a monthly basis, starting from the quarter that began on April 1, 2022, and (ii) allowing the transfer of packaged, but unstamped, cannabis products between licensed cannabis producers; and (b) the federal excise duty framework for vaping products in relation to the markings, customs storage and excise duty liability of these products. Part 3 amends the Underused Housing Tax Act to make amendments of a technical or housekeeping nature. It also makes regulations under that Act in order to, among other things, implement an exemption for certain vacation properties. Division 1 of Part 4 authorizes the Minister of Finance to acquire and hold on behalf of His Majesty in right of Canada non-voting shares of a wholly-owned subsidiary of the Canada Development Investment Corporation that is responsible for administering the Canada Growth Fund and to requisition the amounts for the acquisition of those shares out of the Consolidated Revenue Fund. Division 2 of Part 4 amends the Bretton Woods and Related Agreements Act to increase the maximum financial assistance that may be provided in respect of foreign states. Subdivision A of Division 3 of Part 4 enacts the Framework Agreement on First Nation Land Management Act. Subdivision B of Division 3 of Part 4 contains transitional provisions in respect of the enactment of the Framework Agreement on First Nation Land Management Act and makes consequential amendments to other Acts. It also repeals the First Nations Land Management Act. Division 4 of Part 4 amends the Government Employees Compensation Act in order to fulfil Canada’s obligations under the Memorandum of Understanding between the Government of Canada and the Government of the United States of America concerning Cooperation on the Civil Lunar Gateway. Division 5 of Part 4 amends the Canada Student Loans Act to eliminate the accrual of interest on guaranteed student loans beginning on April 1, 2023. It also amends the Canada Student Financial Assistance Act to eliminate the accrual of interest on student loans beginning on April 1, 2023. Finally, it amends the Apprentice Loans Act to eliminate the accrual of interest on apprentice loans beginning on April 1, 2023 and to clarify when the repayment of apprentice loans begins during the interest suspension period from April 1, 2021 to March 31, 2023.