Bills C-59 and C-69: Major Canadian Tax Law Changes Now in Force

Two significant pieces of federal legislation enacted in 2024 — Bill C-59 (the Fall Economic Statement Implementation Act, 2023) and Bill C-69 (the Budget Implementation Act, 2024, No. 1) — together represent the most extensive changes to Canadian tax law in years. These bills implement proposals from multiple federal budgets and fiscal updates, bringing into force measures that affect individuals, corporations, trusts, and international tax arrangements. Here are the most significant changes now in force.

Already in Force Most provisions of Bills C-59 and C-69 are now law. If these changes affect your tax situation, retroactive planning may be limited — but understanding the rules helps you manage your ongoing compliance obligations.

1. Capital Gains Inclusion Rate Increase

Bill C-69 enacted the capital gains inclusion rate increase from 50% to 66.67% for gains above $250,000 per year for individuals (and for all gains for corporations and most trusts), effective June 25, 2024. This is the most significant change to individual investment taxation since the inclusion rate was last changed in 2000. See our detailed capital gains article for the full analysis.

2. Strengthened GAAR

Bill C-59 significantly amended section 245 (GAAR) of the Income Tax Act. The amendments added:

A new 25% penalty on the tax benefit from abusive avoidance transactions entered into on or after January 1, 2024
An economic substance test codified into the statute
A three-year extension to CRA's normal reassessment period for GAAR assessments
Expanded application to "series of transactions" that together constitute avoidance

3. Mandatory Disclosure Rules

Bill C-59 enacted mandatory disclosure rules that require taxpayers and advisors to report certain types of transactions to CRA. These include:

Notifiable transactions — specific transactions designated by the Minister as worthy of disclosure, which must be reported within 90 days
Reportable uncertain tax treatments — for large corporations with assets over $50 million, financial statement uncertain tax positions must be disclosed
Reportable transactions — transactions with certain "hallmarks" (confidentiality, contingent fees, contractual protection) that suggest potential avoidance

Failure to disclose required transactions results in penalties and the indefinite extension of CRA's reassessment period for the undisclosed transaction.

4. Excessive Interest and Financing Expenses Limitation (EIFEL)

The Excessive Interest and Financing Expenses Limitation (EIFEL) rules — Canada's version of OECD BEPS Action 4 recommendations — limit the deductibility of net interest and financing expenses to a specified percentage (40% for 2023, dropping to 30% for 2024 and beyond) of adjusted taxable income. These rules affect businesses with significant debt financing, particularly those with cross-border debt arrangements.

5. Housing-Related Measures

Multiple housing-related tax changes were enacted, including:

The short-term rental deduction denial for non-compliant STR operators (see our STR article)
Enhanced GST New Rental Housing Rebate to encourage purpose-built rental construction
Changes to the First Home Savings Account (FHSA) contribution rules
Increased Home Buyers' Plan (HBP) withdrawal limit from $35,000 to $60,000

6. International Tax Changes

Both bills included multiple international tax provisions aligned with OECD/G20 Base Erosion and Profit Shifting (BEPS) recommendations:

Implementation of the Pillar Two global minimum tax framework (15% minimum tax on large multinational enterprises)
Hybrid mismatch rules denying deductions for payments that give rise to mismatches in tax treatment between Canada and foreign jurisdictions
Expanded foreign affiliate dumping rules

Pillar Two — Multinational Minimum Tax The Pillar Two global minimum tax applies to multinational groups with consolidated revenues over EUR 750 million. Affected groups operating in Canada must assess whether their Canadian income is subject to a top-up tax to reach the 15% minimum effective tax rate.

7. Working with Swift Accounting on C-59 and C-69 Compliance

The scope and complexity of Bills C-59 and C-69 make a comprehensive review with your tax professional essential for any business or individual affected by the new rules. From GAAR risk assessments to EIFEL calculations to mandatory disclosure compliance, the 2024 legislative changes require active management. Our tax professionals help clients understand and comply with the new rules. Contact us for a review of how these changes affect your specific situation.

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Swift Accounting Team

Tax Professionals — Calgary, AB

Our tax professionals specialize in Canadian personal and corporate tax, helping Calgary businesses and individuals navigate CRA requirements, optimize tax positions, and plan for the future.