Canadian Budget 2017

On March 22, 2017 ("Budget Day"), the Honourable William Francis Morneau, Canada's Minister of Finance, tabled Canada's annual federal budget ("Budget 2017"). Importantly, Budget 2017 does not increase the capital gains inclusion rate nor does it introduce any rules targeted at the use of private corporations to reduce or defer tax. Instead, Budget 2017 proposes to build on the current Government's previous actions, and to introduce targeted investments aimed at fostering economic growth and benefitting the middle class.

Specifically, Budget 2017 proposes to close tax loopholes and strengthen the integrity of the tax system by implementing the following initiatives:

• preventing the avoidance of deferral of income tax through the use of offsetting derivative positions in straddle transactions;