Department of Finance Canada released draft legislative proposals for consultation on a package of previously announced and technical tax measures.
The proposals cover several parts of the Income Tax Act. Finance Canada said the package is intended to clarify tax rules, close avoidance gaps, and make existing measures work as intended.
One proposed measure would update the qualified-investment regime for registered plans. Another would expand an anti-avoidance rule for trust-to-trust transfers so that indirect transfers are also covered.
The draft legislation would also support the wind-down of fuel-charge return mechanisms. Finance Canada said no Canada Carbon Rebate payments would be made for tax returns or adjustment requests filed after October 30, 2026.
For business investment, the package included immediate expensing for manufacturing or processing buildings acquired on or after Budget Day and used for manufacturing or processing before 2030, followed by a four-year phase-out.
Clean-economy measures were also included. Finance Canada proposed expanding the Clean Hydrogen investment tax credit so eligible hydrogen production pathways include hydrogen produced from methane pyrolysis.
The consultation also addressed corporate and international tax rules, including a proposal to prevent deferral of corporate income tax on investment income through staggered year ends, and hybrid mismatch amendments connected to OECD/G20 BEPS Action 2.
This is a consultation stage, not the final law. The practical importance is that the package touches registered plans, clean-economy credits, corporate tax planning, carbon-rebate timing, and international anti-avoidance rules, so the final wording and effective dates will matter.