Bill C-15 Part 1 Income Tax Act Amendments

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An Act to Implement Certain Provisions of the Budget Tabled in Parliament on November 4, 2025

Short title:Budget 2025 Implementation Act, No. 1

Bill Type: House Government

Bill Sponsor: Minister of Finance and National Revenue

This Bill received Royal Assent on Thursday, March 26, 2026

BILL C-15 PART 1, DIVISION 1 — INCOME TAX REGULATIONS (ss. 98–125)

This page covers the regulatory amendments that accompany the Income Tax Act changes in Division 1. It amends the Income Tax Regulations across six major areas — RRIF minimum payments, trust reporting, capital cost allowance, clean energy equipment classifications, foreign affiliate surplus rules and coordinating amendments tied to Bill C-4. Most changes are retroactive, some by years.

This page is organized into clusters. Each cluster covers a distinct area — scroll down to read each section and cast your vote.

  • Cluster 1 — RRIF Minimum Payment Rules (ss. 98–99)
  • Cluster 2 — Trust Reporting Requirements (s. 100)
  • Cluster 3 — Capital Cost Allowance & Depreciation (ss. 101–106)
  • Cluster 4 — Clean Energy Equipment Classifications (ss. 116–119)
  • Cluster 5 — Foreign Affiliate Surplus Rules (s. 112)
  • Cluster 6 — Coordinating Amendments & CRF Payment Authority (ss. 124–125)

OMNIBUS VERDICT

What the Table of Contents says:

Income Tax Regulations

What is actually in this section:

  • ✅ RRIF minimum payment and withholding rule changes (ss. 98–99) — effective January 1, 2027
  • ✅ Expanded trust information reporting requirements (s. 100) — retroactive to December 30, 2024
  • ✅ New capital cost allowance classes and reaccelerated investment incentive property rules (ss. 101–106) — retroactive to January 1, 2025
  • ✅ New purpose-built residential rental depreciation class at 6% (s. 103–104) — retroactive to April 16, 2024
  • ✅ Clean energy equipment classification amendments across Classes 43.1, 56, 57 and 58 (ss. 116–119) — some retroactive to January 1, 2022
  • ✅ Foreign affiliate exempt, hybrid and taxable surplus rule amendments (s. 112) — retroactive to July 1, 2024
  • ✅ Direct payment authority from the Consolidated Revenue Fund for Clean Electricity Credits (s. 124)
  • ✅ Coordinating amendments pre-wiring Bill C-4 personal tax credit top-up (s. 125) — retroactive to January 1, 2025

Eight distinct regulatory and statutory changes. One heading in the Table of Contents. Most are retroactive. Parliament votes on all of it together — or not at all.

This is a textbook omnibus regulation package.

WHO GAINS POWER

The Minister of National Revenue gains direct payment authority from the Consolidated Revenue Fund for Clean Electricity Credit amounts — meaning government can write cheques without a separate Parliamentary appropriation (s. 124).

Cabinet gains authority to define and redefine "reaccelerated investment incentive property" by regulation — determining which capital investments qualify for accelerated depreciation rates of up to 100% in the first year, retroactive to January 1, 2025.

The Canada Revenue Agency gains expanded authority to require detailed trust information returns — capturing every trustee, beneficiary and settlor including date of birth, jurisdiction of residence and tax identification number — for trusts that previously had no filing obligation (s. 100).

Cabinet gains authority to prescribe environmental compliance conditions that disqualify clean energy equipment from Class 43.1 or 43.2 — giving regulators the power to strip depreciation benefits after the fact if environmental standards are not met (s. 106).

WHO LOSES POWER

Parliament loses direct control over which capital investments qualify for accelerated depreciation — the "reaccelerated investment incentive property" definition is set and can be changed by regulation without a Parliamentary vote.

Trustees of bare trusts, alter ego trusts, joint spousal trusts and nominee arrangements lose the ability to operate without annual disclosure of all parties — including beneficiaries who may not know they are named in a trust (s. 100).

Corporations investing in clean energy equipment lose certainty over depreciation eligibility — environmental compliance conditions can be applied retroactively to disqualify property already placed in service (s. 106).

WHO GAINS MONEY

Corporations building new purpose-built residential rental properties gain a new 6% annual depreciation rate — double the standard rate — for qualifying buildings where construction began after April 15, 2024 and before 2031 (s. 103).

Corporations investing in reaccelerated investment incentive property gain enhanced first-year depreciation rates — up to 100% in some classes — for capital acquired after 2024 and available for use before 2034 (ss. 103–106).

Corporations investing in clean electricity, geothermal, solar, tidal, pumped hydro and carbon capture equipment gain expanded Class 43.1, 57 and 58 eligibility — including eligible transmission equipment now qualifying for accelerated depreciation (ss. 116–119).

Individuals gain a top-up personal tax credit tied to Bill C-4 — worth 3.45% in 2025 and 7.14% in subsequent years — applied against basic personal and other non-refundable credits, retroactive to January 1, 2025 (s. 125).

Foreign affiliates of Canadian corporations gain clarified exempt, hybrid and taxable surplus treatment for inter-affiliate dividends — reducing double-taxation exposure on cross-border distributions made on or after July 1, 2024 (s. 112).

WHO LOSES MONEY

Trusts that fail to file the expanded information returns face penalties — and the definition of who must file has been significantly broadened to capture arrangements that previously had no filing obligation, retroactive to December 30, 2024 (s. 100).

Corporations that miss environmental compliance conditions for clean energy equipment face loss of Class 43.1 or 43.2 depreciation eligibility — potentially triggering recapture of depreciation already claimed (s. 106).

Corporations with fiscal years straddling 2029–2030 or 2031–2032 face blended depreciation rate calculations — reducing the benefit of reaccelerated incentive property in transition years (s. 103).

Non-arm's length transactions structured to qualify property as reaccelerated investment incentive property are caught by anti-avoidance rules — with CRA authority to recharacterize the transaction and deny the enhanced depreciation (s. 105).

THE CATCH

The reaccelerated investment incentive property rules are set entirely by regulation. Cabinet determines which assets qualify, at what rates and for how long — without Parliamentary approval. The rates phase down on a schedule that Cabinet can adjust. A corporation can invest, claim enhanced depreciation, and later find the rules changed around them.

The new purpose-built residential rental class offers a 6% depreciation rate — but only for buildings where construction began in a narrow window (after April 15, 2024 and before 2031) and that become available for use before 2036. Miss the window by a day and the standard rate applies. The window is set by regulation and can be changed.

The trust reporting expansion is retroactive to December 30, 2024 — meaning trustees who had no filing obligation last year now have one, and penalties apply from that date. The definition of "settlor" has been broadened to capture anyone who transferred property to a trust at any time, directly or indirectly, in any manner whatever — a standard broad enough to capture transactions that were never intended to create a trust relationship.

Section 125 pre-wires a personal tax credit top-up that only activates if Bill C-4 receives royal assent. Parliament is being asked to approve a tax credit in Bill C-15 that depends on a separate bill passing — bundling two legislative outcomes into one vote.

The Clean Electricity Credit payment authority in section 124 allows the Minister to pay amounts directly from the Consolidated Revenue Fund — bypassing the normal appropriations process. Parliament votes once on the authority; the Minister decides the amounts.

[Source: Bill C-15, Part 1, Division 1 — Income Tax Regulations (ss. 98–125) — Canada.ca]

CLUSTER 2 — Capital Gains Changes 

Sections 2–9, 17–18, 28–30, 60, 75, 79–80 — covering:

  • Lifetime Capital Gains Exemption expanded — new ss.110.61, 110.62
  • New Cooperative Conversion exemption (s.110.62) — tax-free sale of a business to a worker cooperative
  • New Canadian Entrepreneurs' Incentive — reduced inclusion rate for qualifying founders
  • Retroactive to January 1, 2024

Key authority granted: CRA gets broad discretion to determine what qualifies as a "founding" interest and whether cooperative conversion conditions are met.

Plain language:This cluster changes who pays tax when they sell a business, farm, or shares — and creates new exemptions for founders and worker cooperative conversions. Most changes are retroactive to January 1, 2024.

CLUSTER 3 — Accelerated Depreciation / Capital Cost Allowance 

Sections 103–123 (Income Tax Regulations) — covering:

  • Reaccelerated Investment Incentive Property — a new category (property acquired 2025–2033) getting enhanced CCA rates
  • New 6% CCA class for purpose-built rental housing (s.104, Reg. 1101(1ac.1))
  • Extended zero-emission vehicle incentives to 2033
  • New special-purpose buildings definition for semiconductor/cleanroom facilities

Key authority granted: Minister of Natural Resources gets conclusive technical authority over clean energy property classifications.

Plain language:This cluster lets businesses write off the cost of new equipment and buildings faster on their taxes — reducing what they owe sooner. It creates a new category called "reaccelerated" property for investments made between 2025 and 2033, adds a special fast write-off for new rental apartment buildings, and extends electric vehicle tax incentives to 2033.

CLUSTER 4 — Transfer Pricing Overhaul 

Section 93 — a near-complete rewrite of s.247:

  • Replaces "arm's length price" with "arm's length conditions" — a broader, more subjective standard
  • Imports OECD Transfer Pricing Guidelines directly into Canadian law by reference
  • Introduces "economically relevant characteristics" as the new analytical framework
  • Penalties restructured

Key authority granted: CRA gets significantly expanded discretion to recharacterize transactions based on OECD guidelines — which are set by an international body, not Parliament.

Plain language:Transfer pricing is how the government controls what price multinational companies charge each other when they move money, goods or services between their own subsidiaries in different countries. This cluster nearly rewrites those rules — replacing a clear Canadian standard with a broader, more subjective one imported directly from international guidelines written by the OECD, a club of wealthy nations that Canada does not control.

CLUSTER 5 — Registered Plans & Unclaimed Property 

Sections 66–71, 73, 98–99 — covering:

  • New unclaimed property authority framework — RRSPs, RRIFs, pension funds of "unlocated individuals" can now be transferred to provincial unclaimed property authorities
  • FHSA (First Home Savings Account) technical fixes
  • RRIF minimum amount rules updated
  • Effective January 1, 2027

Key authority granted: Minister of Finance can designate additional laws as qualifying unclaimed property regimes by publication — no parliamentary approval required.

Plain language:This cluster creates a new system for handling retirement savings — RRSPs, RRIFs and pension funds — that belong to Canadians who can no longer be located by their financial institution. It allows those funds to be transferred to provincial "unclaimed property" authorities for safekeeping. It also updates the rules for First Home Savings Accounts and minimum RRIF withdrawal amounts. Most of this takes effect January 1, 2027.

CLUSTER 6 — Trust Reporting 

Sections 71, 100 — covering:

  • Expanded trust filing requirements — new "deemed trust" rules capture arrangements not traditionally considered trusts
  • New exceptions carved out (alter ego trusts, public guardian trusts, employee ownership trusts, statutory compliance trusts)
  • Solicitor-client privilege protection clarified

Plain language:A trust is a legal arrangement where one person holds assets — money, property, investments — on behalf of another. This cluster expands who must file detailed tax reports about their trust, adds new exceptions for certain trusts like those managed by public guardians, and clarifies that lawyers can still protect client information under solicitor-client privilege. It also introduces a new definition of "settlor" — the person who originally put money into the trust — that captures a much wider range of arrangements than before.

CLUSTER 7 — Resource Industry 

Sections 13–16 — covering:

  • New reaccelerated Canadian Exploration Expense and reaccelerated Canadian Development Expense deductions (2025–2033)
  • Flow-through share rules updated
  • Oil & gas property expenses accelerated

Plain language:This cluster gives oil and gas, mining and resource companies faster tax deductions on their exploration and development costs — a new category called "reaccelerated" expenses for money spent between 2025 and 2033. It also updates the flow-through share rules, which allow resource companies to pass their tax deductions directly to investors. In plain terms: resource companies and their investors get to write off costs faster and pay less tax sooner.

CLUSTER 8 — International & Non-Resident 

Sections 87–90, 112–113 — covering:

  • Withholding tax exemption for residential tenants paying rent to non-resident landlords (s.90) — tenant no longer required to withhold
  • Restrictive covenant rules updated
  • Foreign affiliate surplus rules updated
  • Permanent establishment definition updated

Plain language:This cluster changes the rules for money flowing between Canada and other countries. It covers four distinct situations: what happens when a non-resident landlord owns a Canadian rental property and a tenant pays them rent; how multinational companies account for dividends moving between foreign subsidiaries; what counts as a "permanent establishment" for tax purposes; and how debt restructuring agreements with non-residents are taxed. The tenant withholding change is the one that affects ordinary Canadians directly.

CLUSTER 9 — Spending Authority & Coordination

  • Section 124: Direct payment authority from Consolidated Revenue Fund for Clean Electricity ITC — no further appropriation needed
  • Section 125: Pre-wires Bill C-4 (Making Life More Affordable Act) — adds a top-up tax credit formula contingent on Bill C-4 passing

Plain language: This cluster does two things that have nothing to do with technical tax fixes.

First, it gives the government a permanent open-ended authority to pay out Clean Electricity tax credits directly from the public treasury — no separate parliamentary vote required each time.

Second, it pre-wires the tax code to connect to Bill C-4, a separate Bill that hadn't passed yet when this Bill was drafted — meaning this Bill does the legislative work of two Bills at once.

Bottom line: The nightmare isn't any single provision — it's the combination. You have:

  • Permanent spending authority embedded in a tax bill
  • A second bill's outcome pre-legislated before Parliament voted on it
  • All of it buried in Division 1 of an omnibus

That's three layers of parliamentary bypass in two sections.