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ARTICLE · 03 APRIL 2023

2023 Federal Budget: Selected Tax Measures

Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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Blake, Cassels & Graydon LLP

Blake, Cassels & Graydon LLP

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On March 28, 2023 (Budget Day), the Minister of Finance introduced Canada's 2023 federal budget (Budget 2023). Notwithstanding some predictions that the heavy legislative agenda...

CanadaTax
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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On March 28, 2023 (Budget Day), the Minister of Finance introduced Canada's 2023 federal budget (Budget 2023). Notwithstanding some predictions that the heavy legislative agenda of the Department of Finance (Finance) in recent years would translate into a budget that was light on tax measures, Budget 2023 contains some dramatic changes to the fiscal landscape. This bulletin analyzes the most significant business tax measures addressed in Budget 2023.

HIGHLIGHTS

Despite the pending Supreme Court of Canada decision in Deans Knight, Budget 2023 indicates Finance's intention to forge ahead with a material overhaul of the general anti-avoidance rule (GAAR). Proposed amendments include: 1) incorporating an interpretive preamble, 2) lowering the threshold for an "avoidance transaction", 3) mandating the consideration of "economic substance" as part of the misuse or abuse analysis, 4) extending the reassessment period, and 5) imposing a penalty of 25% of the amount of

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