The 529-page notice of ways and means motion, tabled Nov. 28 prior to the Fall Economic Statement Implementation Act, 2023 being introduced Nov. 29, contains many of the tax and non-tax measures announced in general terms by Deputy Prime Minister and Finance Minister Chrystia Freeland as part of the Nov. 21 federal fall economic statement (FES).
Among other things, the proposed legislation would enact a long-awaited major overhaul of Canada’s competition law.
Finance Minister Chrystia Freeland
Department of Finance officials told reporters during a Nov. 28 background briefing the government proposes to increase the time period the competition watchdog can review transactions to enable the bureau to review any non-notified transaction (i.e. those not subject to mandatory pre-merger notification) for anti-competitive concerns for up to three years after the transaction closed. An official explained that with the bureau currently having just one year to investigate and detect competitive harms after such a merger transaction closes, in many cases it’s feasible for larger firms to delay post-merger price increases for that length of time.
The notice of ways and means motion contains all the tax and non-tax measures that the government is including in the Fall Economic Statement Implementation Act, 2023, but not all of the legislative initiatives Freeland announced earlier this month are contained in the FES implementation bill.
For example, Ottawa’s announced intention to deny income tax deductions for expenses incurred on or after Jan. 1, 2024, by short-term rental operators who “are not compliant with the applicable provincial or municipal licensing, permitting or registration requirements” will be implemented in forthcoming Income Tax Act amendments, possibly in spring 2024, a finance official said.
Freeland said in a statement accompanying the notice of ways and means motion that the proposed implementation legislation “is delivering critical pieces of our fall economic statement — and it will help make life more affordable, build more homes, and create good jobs from coast to coast to coast.”
The government says its “modernization” of the Competition Act and the Competition Tribunal Act will:
- “Strengthen the tools and powers” available to the Competition Bureau “to enable it to crack down on abuses of dominance by bigger companies, such as predatory pricing;
- Enhance” protections for consumers, workers and the environment, including by prohibiting misleading “greenwashing” claims and improving the focus on worker impacts in competition analysis;
- Empower the competition commissioner “to review a wider selection of anti-competitive collaborations and seek meaningful remedies to ensure that harmful conduct is not repeated”;
- Broaden the reach of the law “by enabling more private parties to bring cases before the Competition Tribunal and receive payment if they are successful;” and
- Support a “right to repair,” with an amendment to prevent manufacturers from refusing to provide “in an anti-competitive manner” the means of repair of devices and products.
Subsection 8.1(3) of the Competition Tribunal Act would be replaced, and restrict potential costs awards against the government, under the heading “No award against the Crown: (3) Despite any other Act of Parliament, the Tribunal shall not award costs against His Majesty in right of Canada unless it is satisfied (a) that an award is necessary to maintain confidence in the administration of justice; or (b) that the absence of an award would have a substantial adverse effect on the other party’s ability to carry on business.”
The FES Implementation Act 2023 also proposes to: make mental health services more affordable by removing the GST/HST on psychotherapy and counselling therapy services; support adoptive parents, including surrogate parents, by introducing a 15-week shareable employment insurance adoption benefit, and by ensuring that workers in federally-regulated sectors have job protection while receiving the new benefit; and create a new paid leave for federally-regulated workers to support families who experience pregnancy loss.
The government also proposes to remove the GST on new rental home construction for co-operative housing corporations that provide long-term rental accommodation.
The Carbon Capture, Utilization, and Storage investment tax credit, and the Clean Technology investment tax credit, if passed by Parliament, will “help grow the economy and create great jobs for Canadians and reduce emissions,” the minority Liberal government said.
The FES implementation legislation also introduces requirements that businesses pay prevailing union wages and provide apprenticeship training opportunities in order to receive the maximum credit rate for the Clean Technology, Clean Hydrogen, Clean Electricity, and Carbon Capture, Utilization, and Storage investment tax credits.
The government said the bill would also allow Ottawa to implement a digital services tax in 2024 to ensure “that digital companies pay their fair share of taxes in the absence of timely implementation of an international, multilateral system” (a system that is not in place).
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