Crypto reporting, qualified investment rules, and global minimum tax also in scope
Ottawa is tightening the rules on trust transfers, tax deferrals, crypto reporting, and investment compliance - and wealth advisors need to pay attention.
Bill C-31, formally known as the Budget 2025 Implementation Act, No. 2, landed in the House of Commons on May 6, 2026, for its first reading. Introduced by the Minister of Finance and National Revenue, the legislation puts into effect provisions from the federal budget tabled on November 4, 2025, and touches more than 30 statutes in the process.
If you work in wealth management, investment advisory, or anywhere in the financial services space in Canada, this one deserves a close read.
Part 1 of the bill amends the Income Tax Act and Income Tax Regulations on several fronts. It limits the deferral of tax on investment income resulting from the use of tiered corporate structures with mismatched year ends.
It also widens the net on trust-to-trust transfers. Where anti-avoidance rules previously applied to direct transfers, the legislation now captures indirect transfers of trust property to other trusts as well.
The qualified investment rules, meanwhile, are being simplified, streamlined, and harmonized.
Bill C-31 also implements the Crypto-Asset Reporting Framework.
A supplementary rule strengthens the tax debt anti-avoidance provisions, and bankrupt corporations, trusts, and partnerships lose their exception to the debt forgiveness rules. The bill also enhances the efficiency and effectiveness of information gathering during tax audits - giving the Canada Revenue Agency sharper tools on that front.
Part 2 turns to international tax. The bill amends the Global Minimum Tax Act to implement the UTPR, which subjects the Canadian constituent entities of certain multinational enterprise groups to top-up tax on low-taxed profits not already subject to an IIR or a qualified domestic minimum top-up tax. It also implements certain aspects of the administrative guidance in respect of the GloBE Model Rules approved by the Inclusive Framework and published by the OECD.
On the GST/HST side, Part 3 extends the special rules for certain investment plans to first home savings accounts. It also ensures the 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. For financial institutions that do business in an HST province and at least one other province, the bill clarifies filing requirements and rules related to the recovery of embedded GST/HST amounts.
Part 4 digs into the structural plumbing of financial regulation. The Trust and Loan Companies Act, the Bank Act, and the Insurance Companies Act are all amended to prohibit financial institutions from issuing documents in bearer form - and to require the replacement of those still in circulation.
The Bank Act also picks up a new requirement: institutions must offer or sell deposit products in a non-discriminatory manner in certain circumstances.
Separately, the bill amends the Income Tax Conventions Implementation Act, 1996, suspending the operation of the Canada-Russia Income Tax Agreement.
The full text of the bill is available at https://www.parl.ca/DocumentViewer/en/45-1/bill/C-31/first-reading.
Bill C-31 has cleared first reading. Dates for second reading, third reading, Senate readings, and Royal Assent have not yet been announced.
