On April 16, 2024, Canada’s Deputy Prime Minister and Minister of Finance, Chrystia Freeland, delivered the Liberal Government’s federal budget, Fairness for Every Generation (Budget 2024). The most notable tax measure in Budget 2024 is the proposal to increase the capital gains inclusion rate from one-half to two-thirds, effective for capital gains realized on or after June 25, 2024. This measure will apply to all capital gains realized by corporations and trusts, but only will apply to individuals in respect of the portion of capital gains realized in the year that exceeds $250,000.

Additionally, and among other things, Budget 2024:

• provides design and implementation details of the Clean Electricity Investment Tax Credit (CE ITC) for both public utility and non-public utility taxpayers;
• expands the application of the Clean Technology Manufacturing Investment Tax Credit to polymetallic projects (i.e., projects that produce multiple minerals);
• introduces a new Electric Vehicle Supply Chain Investment Tax Credit which will be available in respect of eligible property that is acquired and becomes available for use on or after January 1, 2024; and
• announces the Government’s intention to proceed with certain measures affecting Indigenous communities, including the expansion of opt-in tax jurisdiction frameworks, creating an Indigenous Loan Guarantee Program that will include up to $5 billion in loan guarantees, and providing additional funding to support Indigenous economic opportunity.

Budget 2024 also confirms the Government’s intention to proceed with various previously announced legislative proposals with respect to the clean economy tax credits, including the Clean Hydrogen Investment Tax Credit and the expansion of the Clean Technology Investment Tax Credit and the CE ITC to support investments in the generation of electricity and heat from waste biomass.

For a discussion of these tax measures and others in Budget 2024, please see McCarthy Tétrault’s Budget 2024 Commentary.