Federal Bill C-69, Budget Implementation Act, 2024, No. 1
Following the release of Federal Budget 2024 on April 14, 2024, draft legislation to implement certain provisions of the Budget was introduced and, most recently, received second reading on May 22, 2024. Bill C-69, Budget Implementation Act, 2024, No. 1 ("Bill C-69") includes certain provisions of Budget 2024 that impact the charitable and not-for-profit sector as previously explained in Charity & NFP Law Bulletin No. 526.
Part 1 of Bill C-69 implements amendments to the alternative minimum tax set out in the Notice of Ways and Means Motion to Amend the Income Tax Act and the Income Tax Regulations, with the exception of an exemption from the alternative minimum tax for certain trusts relating to Indigenous Groups, as described in Charity & NFP Law Bulletin No. 526.
Part 2 of the Bill enacts the Global Minimum Tax Act (the "GMT Act"). This regime proposes to "ensure that large multinational corporations are subject to a minimum effective tax rate of 15% on their profits wherever they do business." The GMT Act sets out rules to establish liability for the tax, together with reporting and filing requirements for those subject to the tax, as well as enforcement provisions. However, of note is the fact that "non-profit organizations" and "qualifying non-profit subsidiaries" are "excluded entities" under subsection 13(1) of the GMT Act. It is also important to note that "non-profit organizations" under the GMT Act are defined differently and more broadly than "non-profit organizations" under paragraph 149(1)(l) of the Income Tax Act, and explicitly include entities established and operated "exclusively for religious, charitable, scientific, artistic, cultural, athletic, educational or other similar purposes" that meet certain other criteria as well.
Finally, Part 4 includes provisions that expand Canada's anti-money laundering and anti-terrorism financing regime by amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Act ("PCMLTFA"), Income Tax Act, Excise Tax Act, and Criminal Code. The PCMLTFA will be amended to, among other things:
(a) permit information sharing between reporting entities for the purpose of detecting and deterring money laundering, terrorist financing and sanctions evasion;
(b) authorize, subject to certain conditions, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to disclose certain information to provincial and territorial civil forfeiture offices and to the Department of Citizenship and Immigration;
(c) authorize FINTRAC to publicize additional information pertaining to violations of that Act; and
(d) extend the application of that Act to cheque cashing businesses.
The Income Tax Act and Excise Tax Act will be amended to allow certain judges to authorize, upon application by a Canada Revenue Agency official, the use of device or investigative technique, or procedures or anything else provided in a warrant, for purposes of tax investigations.
The Criminal Code will be amended to provide for "an order to keep an account open or active", as well as for a "production order to require the production of documents or data that are in a person's possession or control on dates specified in an order that fall within the 60-day period after the day on which it is made."
As is normally the case with most Budget Implementation Acts, it is expected that Bill C-69 will make its way through Parliament and pass into law by the end of June when Parliament adjourns for the summer break.
Read the May 2024 Charity & NFP Law Update
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