What will Bill C-31 tax changes mean for your clients?

With Bill C-31 now before Parliament, the breadth of proposed tax changes is prompting Canadian businesses to rethink compliance strategies, capital spending plans and their exposure to enforcement risk.

RSM Canada tax specialists Patricia Contreras and Sigita Bersenas have told WP what the legislation means in practice.

The bill's information-gathering provisions represent a meaningful shift in the relationship between the CRA and taxpayers. While an earlier and more controversial proposal to compel answers under oath was dropped, the legislation as drafted still significantly strengthens the agency's hand.

"Most notable is the introduction of a formal Notice of Non-Compliance regime, along with enhanced penalties tied to compliance orders," says Bersenas, a manager at RSM Canada's national tax centre. "The bill also expands the CRA's ability to obtain foreign-based information and documents held by third parties. Where a taxpayer is issued an NNC, then all non-arm's length parties may be impacted by the suspension of time to count towards the reassessment period."

The practical implications for businesses are immediate.

"Businesses should be implementing stronger documentation practices and ensuring internal records are audit-ready in advance of any CRA review," Bersenas says. "There is also a risk of exposure to those dealing at non-arm's length with an entity who receives an NNC."

Anti-avoidance measures target complex structures

The bill's anti-avoidance provisions are likely to be felt most acutely by businesses with layered ownership arrangements.

Bersenas identifies three categories of concern: groups with complex multi-entity or tiered corporate structures, family offices and high-net-worth individuals using trusts or estate planning structures, and businesses engaging in intercompany transfers or reorganisations where tax attributes or liabilities are being manipulated.

The response, she says, should be both structural and behavioural.

"Taxpayers can review existing structures to identify any reliance on timing mismatches or indirect transfers and reassess trust and estate planning arrangements. Given CRA is targeting form over substance planning, particularly where it results in the deferral or avoidance of tax debt, taxpayers can also document commercial purpose more clearly. And as always, engage advisors early."

Manufacturers, clean economy

For companies with deferred expansion plans, one of the bill's most direct incentives is immediate expensing for manufacturing and processing buildings.

Patricia Contreras, a senior manager at RSM Canada's national tax centre, says the provision could meaningfully shift how companies model capital projects.

"Rather than recovering a $20 million plant investment gradually, a company could deduct the full cost against taxable income in year one, materially reducing the after-tax cost of capital and improving returns on projects that might otherwise fall below investment thresholds," she says. "For companies sitting on deferred expansion plans, this creates a genuine pull-forward incentive to act now."

Bill C-31 also accelerates the clean economy investment tax credit framework, expanding eligibility across clean hydrogen, capture, utilization and storage, clean technology, clean technology manufacturing and clean electricity.

Contreras says the changes "materially widen the pool of projects that can access federal incentives, and in several cases reduce the structural ambiguity that has slowed project underwriting and investment decisions."

But she cautions that access to these credits is not automatic. "The clients who benefit most will be those whose advisors help them model credit eligibility alongside capital structure decisions, before commitments are made."

Crypto delay provides breathing room

The government's decision to postpone implementation of the crypto-asset reporting framework has been welcomed by businesses operating in the digital asset space, though Bersenas is clear that the delay changes nothing fundamental.

 "The delay acknowledges the operational complexity involved in implementing it," she says. "The framework, which aligned with OECD standards, introduces comprehensive reporting obligations for crypto-asset service providers, requiring the capture and reporting of detailed transaction and client-level data."

She says that the extra time should be used productively.

 "Taxpayers involved with digital assets should use this additional time to prepare by analyzing existing data capture and reporting capabilities and implementing tax, compliance, and operations processes to meet the new reporting requirements."

Global minimum tax raises the stakes for multinationals

For multinational enterprise groups with consolidated revenue above 750 million euros, Contreras says the compliance agenda is already live and becoming more demanding.

"Mapping every constituent entity's jurisdictional effective tax rate under the GloBE rules, reviewing intercompany arrangements and transfer pricing structures that may now produce unintended low-tax exposure, and assessing whether transitional safe harbours based on Country-by-Country Reporting data are available" are all priorities before investing in full GloBE calculations.

She also underscores that Bill C-31 expands the CRA's authority to share information with international tax partners, raising the governance stakes. "For advisors with clients who hold interests in global businesses, the cost of inaction is now measurable, and the window for proactive structuring is narrowing."

12 to 18 month horizon

Looking at the full legislative package, Contreras says the compliance and planning implications are significant and, for many companies, already taking shape.

She points to the Undertaxed Profits Rule applying to in-scope entities for fiscal years beginning after December 30, 2025, and to the fact that the crypto-asset reporting framework came into effect on January 1, 2026, with first reports due in 2027.

"Collectively, these measures reflect that CRA is equipped with stronger enforcement tools and a reduced tolerance for uncertain tax positions," she says, "making proactive review and planning increasingly important."