2010 Federal Budget Measures Enacted

Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Tax, July 2010

On July 12, 2010, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, S.C. 2010, c.12 (Bill C-9) received Royal Assent and became law. Bill C-9 includes important income tax amendments first announced on March 4, 2010, as part of the 2010 federal budget.

One important measure contained in Bill C-9 is the change to the definition of "taxable Canadian property" (TCP) and the corresponding change to the scope of section 116 of the Income Tax Act. As reported in our March 2010 Blakes Bulletin on Tax, the definition of TCP has been dramatically narrowed. In most cases, shares will no longer be TCP unless they are real property interests. This eliminates the time-consuming and invasive section 116 procedure in many cross-border share-purchase transactions. While the change is retroactive to March 5, 2010,