A significant chapter in Canadian tax law is being rewritten. On
Nov. 4, 2025, the federal government tabled Budget
2025, which introduced a comprehensive modernization of
Canada's transfer pricing rules under section 247 of the Income
Tax Act. These long‑awaited changes represent the culmination
of a multi‑year narrative that began with the
government's landmark court loss in the Cameco case, progressed
through a detailed consultation process in 2023 and resulted in a
fundamental shift in how transfer pricing will be analyzed and
enforced in Canada.
For multinational enterprises (MNEs) operating in Canada, these
proposals signal a new era of heightened scrutiny, increased
compliance obligations and a decisive move towards aligning
Canadian transfer pricing regulations with the latest Organisation
for Economic Co‑operation and Development (OECD) standards.
This alert provides a detailed analysis of this journey and the
critical changes taxpayers must prepare for.
