Bill C-31

Budget 2025 Implementation Act, No. 2

A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by
(a) providing temporary immediate expensing for eligible manufacturing or processing buildings;
(b) delivering automatic federal benefits for lower-income individuals;
(c) expanding the anti-avoidance rule for direct trust to-trust transfers to include indirect transfers of trust property to other trusts;
(d) limiting the deferral of tax on investment income resulting from the use of tiered corporate structures with mismatched year ends;
(e) clarifying the expenses that qualify as Canadian exploration expenses;
(f) implementing the Crypto-Asset Reporting Framework;
(g) removing bankrupt corporations, trusts and partnerships from the exception to the debt forgiveness rules;
(h) introducing a supplementary rule to strengthen the tax debt anti-avoidance rule;
(i) expanding the clean hydrogen investment tax credit to include hydrogen produced from methane pyrolysis as an eligible production pathway;
(j) enhancing the efficiency and effectiveness of information gathering during tax audits;
(k) providing that no Canada Carbon Rebate payments would be made in respect of tax returns, or adjustment requests, filed after October 30, 2026;
(l) simplifying, streamlining and harmonizing the qualified investment rules; and
(m) making a number of technical amendments, including to correct inconsistencies and to better align the law with its intended policy objectives.
It also amends the Excise Tax Act , in relation to certain measures in respect of the Income Tax Act , and the Income Tax Conventions Implementation Act, 1996 , which suspends the operation of the Canada-Russia Income Tax Agreement. Finally, it amends the Air Travellers Security Charge Act , the Excise Act, 2001 and the Select Luxury Items Tax Act in relation to certain measures in respect of the Income Tax Act .
Part 2 amends the Global Minimum Tax Act to, among other things, implement the UTPR that subjects the Canadian constituent entities of certain MNE groups to top-up tax in respect of the low-taxed profits of constituent entities of those MNE groups not already subject to an IIR or qualified domestic minimum top-up tax, implement certain aspects of the administrative guidance in respect of the GloBE Model Rules approved by the Inclusive Framework and published by the OECD and implement a number of technical amendments to correct mistakes or inconsistencies and to better align that Act with its intended policy objectives. This Part also makes amendments to the Access to Information Act , the Income Tax Conventions Interpretation Act and the Tax Court of Canada Act .
Part 3 amends the Excise Tax Act , the Excise Act , the Excise Act, 2001 and other related texts to implement various measures.
Division 1 of Part 3 implements certain measures in respect of the Excise Tax Act and related texts by
(a) clarifying the tax treatment of federally regulated credit unions for Goods and Services Tax/Harmonized Sales Tax (GST/HST) purposes;
(b) extending the application of the special GST/HST rules for certain investment plans to first home savings accounts;
(c) clarifying the application of the imported supply rules to financial institutions in respect of insurance policies or loans relating to persons resident in, or property located in, Canada;
(d) clarifying the GST/HST treatment of certain services supplied by the Canadian Payments Association or any of its members as a consequence of a recent amendment to the Canadian Payments Act ;
(e) ensuring that special GST/HST rules for financial institutions apply correctly to certain small investment plans, master pension entities, insurers that issue only annuities and sureties of performance bonds;
(f) making technical corrections to the input tax credit rules respecting the change in use of property following a sale of a business and to the GST/HST rules for financial institutions relating to mergers of investment plans;
(g) ensuring that the GST/HST applies properly to Lloyd’s Insurance;
(h) clarifying, in respect of financial institutions that do business in an HST province and at least one other province, filing requirements and rules related to the recovery of embedded GST/HST amounts;
(i) providing a six-month period, following the death of an individual who is a GST/HST registrant, during which no return of the individual or their estate is required to be filed;
(j) ensuring that a GST/HST reporting election between a supplier and its agent continues to apply despite the amalgamation, merger or wind-up of either party;
(k) authorizing the Canada Revenue Agency to share information with international tax authorities with which Canada has an information-sharing agreement, in a manner consistent with the Income Tax Act ; and
(l) making a number of technical amendments to correct inconsistencies and to better align the law with its intended policy objectives.
Division 2 of Part 3 implements certain measures in respect of the Excise Act , the Excise Act, 2001 and other related texts by
(a) making technical corrections in respect of the computation of the additional excise duty on cigars and the computation of negative amounts generated by statutory formulas;
(b) clarifying the tax treatment of certain cannabis and vaping products that are unaccounted for or that are taken for use;
(c) implementing a new limit in respect of packaged raw leaf tobacco for importation for personal use and making consequential amendments to ensure the proper enforcement of the new limit;
(d) allowing the Canada Revenue Agency to consider and grant relief to brewers in certain circumstances;
(e) extending the maximum validity period for certain licences from two years to three years; and
(f) authorizing the Canada Revenue Agency to share information with international tax authorities with which Canada has an information-sharing agreement, in a manner consistent with the Income Tax Act .
Part 4 enacts an Act and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to prohibit financial institutions from issuing documents in bearer form and provide for the replacement of documents that are currently in bearer form.
Division 2 of Part 4 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to provide that no action lies against His Majesty in right of Canada and federal government officials for any acts or omissions made in good faith under those Acts.
Division 3 of Part 4 amends the Bank Act to require an institution to offer or sell deposit products in a non-discriminatory manner in certain circumstances.
Division 4 of Part 4 amends the Financial Administration Act to provide the Governor in Council with authority to make regulations with respect to the conditions under which contracts may be entered into by His Majesty or a Crown corporation. The Division also amends the Department of Public Works and Government Services Act to provide the Governor in Council with authority to make regulations respecting the complaints that may be reviewed by the Procurement Ombudsman and the persons who may file a complaint. The Division also makes a related amendment to the National Capital Act .
Division 5 of Part 4 increases the maximum amounts for accessing the Tax Court of Canada’s informal procedure for appeals under the Income Tax Act and Part IX of the Excise Tax Act .
Division 6 of Part 4 amends Schedule II to the Access to Information Act to prohibit the disclosure of confidential information obtained under the Retail Payment Activities Act or prepared from information obtained under that Act.
Division 7 of Part 4 amends the National Housing Act to increase the total of Canada Mortgage and Housing Corporation outstanding guarantees that are in force. The Division also amends the Protection of Residential Mortgage or Hypothecary Insurance Act to increase the limit for loans that are insured under that Act.
Division 8 of Part 4 amends the Bankruptcy and Insolvency Act to provide the Superintendent of Bankruptcy with the power to request various orders from the court if an unlicensed person acts or represents itself as a licensed trustee, and if a person solicits from another person insolvency filings under that Act or makes representations that are false or misleading in a material respect in relation to bankruptcy and insolvency. The Division also increases the maximum fines for certain offences under that Act.
Division 9 of Part 4 amends the Canada Labour Code to, among other things, prohibit non-compete clauses and other employment-related restrictions, except in certain circumstances.
Division 10 of Part 4 amends the Canadian Human Rights Act to eliminate the position of Deputy Chief Commissioner of the Canadian Human Rights Commission and to provide that the person holding that office is deemed to have been appointed as Chief Commissioner.
Division 11 of Part 4 amends the International Development Research Centre Act to, among other things, reduce the number of members of the Board of Governors of the International Development Research Centre from 14 to 12.
Division 12 of Part 4 amends the Tobacco and Vaping Products Act to provide that a review of the provisions and operation of that Act must be undertaken within five years after the report on the previous review has been tabled in both Houses of Parliament rather than every two years and to specify the period within which the report on the review must be tabled.
Division 13 of Part 4 amends the Pest Control Products Act to replace the mandatory re-evaluation of registered pest control products with a requirement for the Minister of Health to initiate a re-evaluation if, after carrying out an assessment, that Minister has reasonable grounds to believe that the health or environmental risks of a product have increased significantly.
Division 14 of Part 4 amends the Territorial Lands Act to, among other things,
(a) empower the Governor in Council, if the Governor in Council is of the opinion that it is in the national interest, to make orders
(i) to take certain measures with respect to certain lands in Nunavut, including to cancel licences to prospect, the recording of claims or leases of recorded claims or to provide that claims are not to be recorded, that leases of recorded claims are not to be issued or that licences to prospect or leases of recorded claims are not to be renewed, and
(ii) to provide for prohibitions associated with those measures for the persons that are the subject of the orders, including prohibiting the making of an application for a licence to prospect, to record a claim or to lease a recorded claim;
(b) provide that the Minister of Northern Affairs may determine whether compensation is to be paid to certain mineral rights holders that are the subject of the orders referred to in paragraph (a) and, if so, the amount; and
(c) empower the Governor in Council to make regulations respecting the implementation of the orders referred to in paragraph (a) and the compensation referred to in paragraph (b).
Division 15 of Part 4 amends the Red Tape Reduction Act to, among other things, ensure that the provisions of the Official Languages Act , or the provisions of an instrument made under that Act, cannot be the subject of an exemption under Part 2 of the Red Tape Reduction Act .
Division 16 of Part 4 contains measures relating to procurement, production and investment in respect of national defence and national security.
Subdivision A of Division 16 enacts the Defence Investment Agency Act . That Act establishes the Defence Investment Agency, whose mandate is to assist the Minister who presides over that Agency in the exercise of the Minister’s powers and performance of the Minister’s duties and functions relating to production, procurement and investment in respect of national defence or national security. That Act also provides for certain other powers, duties and functions of that Minister. Subdivision A also makes related and consequential amendments to other Acts.
Subdivision B of Division 16 amends the Defence Production Act to, among other things,
(a) extend the application of that Act to supplies and projects related to national security and to services related to national defence and national security;
(b) provide that the Minister who presides over the Defence Investment Agency has exclusive authority to acquire supplies and services related to national defence and national security that are required for the purposes of a department, board or agency of the Government of Canada, subject to certain exceptions;
(c) extend the purposes for which that Minister may engage in stockpiling to include national defence and national security, including economic security, and the defence and security of an associated government or other state;
(d) provide that Minister with new financial authorities, including the authority to enter into financial transactions for the purpose of investment in national defence and national security sectors; and
(e) establish procurement rules in relation to national defence and national security.
Subdivision B also makes consequential amendments and terminology changes to certain legislative texts.
Division 17 of Part 4 amends the Canada Transportation Act to, among other things,
(a) authorize the Governor in Council to choose to have the backlog of air travel complaints resolved by third parties engaged by the Minister of Transport or the Canadian Transportation Agency;
(b) transfer responsibility for the resolution of air travel complaints from the Canadian Transportation Agency to the Minister of Transport;
(c) authorize the Governor in Council to choose to have future air travel complaints resolved by third parties approved by the Minister of Transport;
(d) transfer authority to make regulations respecting air passenger rights from the Canadian Transportation Agency to the Minister of Transport;
(e) remove mandatory confidentiality requirements regarding air travel complaints; and
(f) increase the maximum administrative penalty payable by corporations for certain violations of the Canada Transportation Act or its regulations.

Budget 2025 Implementation Act, No. 2

[Chris Bittle, Liberal, St. Catharines, ON]

Madam Speaker, I think we are falling into an old debate in a system where we were not spending enough on defence. We were all concerned about not everyone getting a piece of the pie.

We are in a situation now where if we are at 2%, which we are, going to 3.5%, there is an opportunity for the manufacturing sector, not just in Ontario but also in Manitoba. We have heard announcements across the country. The old saying “A rising tide lifts all boats” applies. This is something we can see right now. Though I cannot speak about and have no insider information on what will happen next with our next fighter purchase, I know that it will benefit not only just one area of the country but from coast to coast to coast.

[Terry Dowdall, Conservative, Simcoe—Grey, ON]

Madam Speaker, I want to thank the member opposite for discussing the automotive industry for a small portion of his speech.

I know that there is great concern in the county of Simcoe, as host to Honda as well as to Toyota. There are really only the big two now in Canada.

We have a government that wants to buy Canadian and support Canadian. I would like to ask the member where we are at when we are bringing up to 50,000 Chinese EV vehicles into Canada that are not going to be produced here. The battery plant has been cancelled. That was $15 billion in investment. Does the member opposite feel that the government's buy Canadian policy and then, by the same hand, getting Chinese vehicles imported here is going to help manufacturers here in Canada?

[Chris Bittle, Liberal, St. Catharines, ON]

Madam Speaker, St. Catharines has had a General Motors factory in our city for, I believe, about the last century. It is something I do hear about from constituents. It is something they are concerned about.

Down the road in Niagara, construction is continuing on a battery separator plant. It will open in 2027 and will be transformative. The number of Chinese automobiles the member is talking about is such a small segment of the market. There has been an increase in production at Honda and Toyota. I know they have suspended plans for further expansion, but their production is strong. We look for more of that in the future.

I talked about many of the buy Canada projects. Buy Canada is the Government of Canada's buying. The Government of Canada is not buying the vehicles that the member is talking about. I would be excited to be working with companies like General Motors to build Canada strong.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I want to respond in terms of Manitoba's aerospace industry. Whether it is Magellan Aerospace, StandardAero, the Winnipeg Airports Authority and the work it is doing, WestJet, or the Canadian Forces air force base, Manitoba is in fact very aggressive in looking at how we can expand that industry, and we have received a very positive response. I would love to do a comparison with what we have done over recent years, in particular ever since we have had the increase.

I would not support the member for Portage—Lisgar or other members of Parliament's trying to discredit what I think is an important opportunity. There is no regional preference. It is something important. We should be supporting federal co-operation and ensuring that there is a sense of equality.

I am just wondering if my colleague could provide his thoughts in regard to a more collaborative approach in building a stronger, healthier Canada.

[Chris Bittle, Liberal, St. Catharines, ON]

Madam Speaker, it is amazing. Everyone woke up when the hon. member asked a question.

We even heard from the minister today, talking about the significant investments that are happening in Cold Lake, Alberta: billions of dollars' worth. We are going to see that across the country. It will not just be with one project, one item of procurement. The bill would help, as I said, raise all boats.

[Lori Idlout, Liberal, Nunavut, NU]

Uqaqtittiji, I will be sharing my time with the member for Carlton Trail—Eagle Creek.

Before I begin my speech, I just wanted to send a quick congratulatory note to North of North, which won multiple awards at the Canadian Screen Awards.

Ullukkut. I am happy to speak on behalf of Nunavummiut regarding Bill C-31, and I will be speaking regarding the proposed amendments to the Territorial Lands Act contained in Bill C-31. These amendments are essential. The Territorial Lands Act helps govern how Crown lands are managed in Nunavut, a region that is central to Canada's long-term vision for the north and to the development of a resilient Canadian economy.

The amendments would strengthen Canada's sovereignty to protect our national interests and support sustainable economic development for Nunavummiut. As the Prime Minister has made clear, the north is going through a period of profound change and unprecedented opportunity. The Arctic's vast resources and growing marine access are creating new possibilities for trade, transportation and economic growth.

Meanwhile, the world is becoming more dangerous and divided. Last March, the Prime Minister described the assumptions that shaped decades of Canadian defence and security as shifting rapidly. He said, “Climate change is causing our Arctic region to warm nearly three times faster than the global average, a shift that great powers are actively looking to exploit.” Countries around the world are competing for access to the critical minerals needed for clean energy and advanced technology.

In this time of global uncertainty, Canada must be prepared. We must build strength here at home, bolster our security, build a stronger Canada and take full responsibility for defending our Arctic sovereignty. Canada is moving from reliance to resilience. We will no longer depend on any one nation. We will build a stronger, more independent country. We will take measures to build and keep the north secure.

We are working with territorial and indigenous partners to seize these opportunities and boldly develop the full economic potential of the region. As announced by the Prime Minister, “At the centre of this plan are the 140,000 Northerners and Indigenous peoples who will have stronger, more sustainable, more connected communities, greater opportunities, and a lower cost of living.”

The stakes are high, and we need to act. That is why we are proposing these important amendments to the Territorial Lands Act. If we are going to responsibly develop Canada's critical minerals, clean energy and transportation and trade corridors needed to strengthen our economy, Canada's national interests must guide our decisions. We cannot allow our resources to be taken up or used in ways that undermine our security, sovereignty or economic future.

Let me explain what the amendments would do. The Territorial Lands Act sets the framework for making decisions about land use, mineral exploration and development, and environmental protections on Crown lands in Nunavut. However, the current framework does not provide a clear tool to address solutions where mineral tenure would interfere with Canada's national interests. Bill C-31 would address this gap. If passed, the amendments would allow the Governor in Council, on the recommendation of the Minister of Northern and Arctic Affairs, to act when it is in the national interest.

This could include stopping mineral claims on certain lands for a period of time, cancelling existing mineral rights, cancelling prospecting licences and, in some cases, preventing specified parties from reapplying for those licences and mineral rights permanently or for a period of time. The proposed amendments would also establish clear processes around notification and compensation. The minister would be required to notify any affected mineral rights holder and determine whether compensation would be warranted, and, if so, how much. The legislation would also allow regulations to support implementation of these measures where needed.

These are targeted measures intended for limited circumstances. As global interest in Canada's resources grows, we must ensure access to those resources is administered in a way that protects Canada's national interests. The goal of these changes is to ensure that mineral rights on federal Crown land in Nunavut are protected, in partnership with Inuit, for the benefit of their communities and to safeguard our country.

Nunavummiut are at the heart of a strong Arctic. Protecting our sovereignty in the north relies on partnership with the people who live there. That is why the amendments to the Territorial Lands Act were informed by engagement with indigenous partners and the Government of Nunavut.

In fact, Nunavut Tunngavik Inc. asked the Government of Canada to address these potential risks on federal Crown land in Nunavut, just as they are doing on their lands. That request helped inform these proposed amendments.

Following discussions with Nunavut Tunngavik Inc. and the Government of Nunavut, budget 2025 included a commitment to pursue amendments to the Territorial Lands Act. Between December 2025 and March 2026, the government engaged with five indigenous groups with asserted or established rights in Nunavut, as well as with the Government of Nunavut, on the proposed amendments. We have heard clearly that indigenous rights must be respected. We will continue to work so that these amendments align with territorial laws as Nunavut moves forward toward greater decision-making authority, through devolution planned for April 2027.

Our discussions with Nunavut Tunngavik Inc. and the Government of Nunavut showed broad support for measures that would help address risk to Canada's national interests. We believe that the proposed amendments strike the right balance between economic opportunity, indigenous partnership and national security. Should these amendments pass, our work will not stop. The comments raised through engagement will continue to inform the work ahead, including Nunavut devolution, implementation of the United Nations declaration action plan and the ongoing review of federal laws across government.

Several provinces and territories are also taking steps to modernize how mineral rights are managed and to address similar security and sovereignty vulnerabilities resulting from Canada's mineral rights free entry system. Nunavut should not be left behind. Canada needs modern tools that reflect today's economic and security realities in partnership with provinces, territories, indigenous partners and rights holders.

The proposed amendments would complement other security-related initiatives being advanced across the federal government, including Public Safety Canada, Natural Resources Canada, the Department of National Defence and Global Affairs Canada.

Ultimately, this work is about partnership. It is about working alongside Inuit, indigenous governments, territorial partners, federal partners, industry and communities to build a stronger and more secure north together. It is about protecting the safety and security of everyone in Canada.

Inuit are at the heart of Arctic sovereignty because the north is where they live, work and raise their families. As such, this is about making sure Inuit have the ability to help shape decisions about the future of their lands and resources in ways that create lasting benefits for their communities and future generations.

[Tako Van Popta, Conservative, Langley Township—Fraser Heights, BC]

Madam Speaker, the Liberal government is going to be adding somewhere between $70 billion and $80 billion in additional debt to its already sky-high deficit with accumulated debt of over $1 trillion. If I take the middle point and apply 4% interest to it, that is $3 billion every year just in additional interest payments on an already very high number.

How does the Liberal government justify adding tens of billions of dollars of debt to the national debt when so many Canadians are already struggling with the cost of living?

[Lori Idlout, Liberal, Nunavut, NU]

Uqaqtittiji, here is how I answer that question. Canada is investing in Canada. Canada is making sure that it can defend itself, and it is doing so with measures that will help make sure that this includes Nunavut and keeping the Arctic secure.

[Mario Beaulieu, Bloc, La Pointe-de-l'Île, QC]

Madam Speaker, I would like to know what my colleague thinks about the billions of dollars in subsidies that are given to the oil companies, and the decision to waive several environmental assessments.

Does she think this will be good for the fight against climate change? Does this not ultimately threaten the entire environment, which, I believe, is very important to her?

[Lori Idlout, Liberal, Nunavut, NU]

Uqaqtittiji, I think that is why it is so important, with this speech specifically, that we continue to highlight that we need to work with indigenous partners. Indigenous partners, we know, have been stewards of these lands for generations, and working closely with them will help to make sure that we have a balanced approach to making sure that we can build Canada strong.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, first, I must applaud the member in terms of her contributions, whether it is to the northern Prairie regional caucus and beyond or the national caucus, in regard to being that powerful advocate for the north. I very much appreciate her many contributions.

The member asked a question earlier today, which amplified the strength and potential of Canada's north. Could she provide further comments on that issue?

[Lori Idlout, Liberal, Nunavut, NU]

Uqaqtittiji, I am thankful for the wonderful opportunity to share more about the strengths of Nunavut.

I mentioned, in my question, Joe, who is from the Kitikmeot region. He is a long-haul truck driver, but also, as I mentioned, he and his family have been stewards of the land for generations. For him, it is striking a balance between economic opportunities that will help with economic prosperity for Nunavummiut while keeping a balance with protecting the environment and making sure they still have access to caribou and marine mammals. These are great strengths that Inuit, in particular, have in the Arctic that I am sure are replicated in the many first nations and Métis stories, which we need to keep hearing in the House of Commons so that when we are talking about Canada, we are also lifting up indigenous peoples, given that June 1 is the first day of National Indigenous History Month.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Speaker, as my colleague from La Pointe-de-l'Île said, a lot of climate policies have been walked back. The government ended the carbon tax and, for all intents and purposes, the industrial carbon tax. It is also allowing hydrogen made from methane to be classified as clean hydrogen, granting new oil subsidies, and so on. Despite all this backtracking, including the funding for new pipelines, the government is telling us that it will be able to fulfill its obligations under the Paris Agreement as early as this year.

Bloc Québécois members play fair. We criticize, but we ask for figures first. We are asking the government what figures it is basing its claim on. However, there do not seem to be any figures.

I would like my colleague to tell me one thing. She was recently a member of the NDP caucus, and I think she was interested in these figures when she was a New Democrat.

Now that she is a new member on that side of the House, is she pushing for those figures to be made public?

[Lori Idlout, Liberal, Nunavut, NU]

Uqaqtittiji, I am always going to make sure, when it comes to us doing our work as parliamentarians, that we have transparency, of course. I know, for example, that when I asked my question about protecting the environment, I talked about how important the Inuit-led wind project is in Hope Bay—

[The Assistant Deputy Speaker (Alexandra Mendès), Alexandra Mendes]

I am terribly sorry, but I have to cut it there.

Resuming debate, the hon. member for Carlton Trail—Eagle Creek.