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ARTICLE · 30 NOVEMBER 2023

Finance Introduces Relief For ETFs From Share Buyback Tax

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On November 28, 2023, the federal government tabled the Notice of Ways and Means Motion to introduce the Fall Economic Statement Implementation Act, 2023.

CanadaFinance and Banking
Tony Zhang
Tony Zhang
Grace Pereira
Grace Pereira
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On November 28, 2023, the federal government tabled the Notice of Ways and Means Motion to introduce the Fall Economic Statement Implementation Act, 2023. This legislation will amend the Income Tax Act (the ITA) in order to implement various measures previously announced in earlier economic statements and federal budgets, including to introduce the new tax on the repurchase of equity (referred to as the "share buyback tax" or SBT) that was first announced in the 2022 Fall Economic Statement and re-confirmed in the 2023 Federal Budget.

Based on the draft legislation of the SBT that was released on August 4, 2023, there were concerns that the SBT could apply to Canadian exchange-traded funds (ETFs) when units of the ETF are redeemed by authorized participants, contrary to the stated policy objective of the SBT.

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