Bill C‑15 Summary: What Businesses Need to Know

Posted on April 13th, 2026 in Commodity Tax (HST), Domestic Tax, General Business

On March 26, 2026, Bill C‑15 officially received royal assent, bringing into force a wide range of tax measures first introduced in the federal budget of November 2025. The legislation implements major measures from the 2025 federal budget and several previously announced initiatives, affecting everything from innovation incentives to transfer pricing, trust reporting, capital gains planning, and clean economy investment credits.

For Canadian businesses, these changes create both opportunities and new compliance expectations. Below is DJB’s consolidated overview of the most significant impacts.

Capital Gains Rollover Expansion: More Flexibility for Entrepreneurs and Investors

Bill C‑15 broadens access to the capital gains rollover for Eligible Small Business Corporation (ESBC) shares disposed of after December 31, 2024, where replacement shares acquired.

Highlights:

• Preferred shares now qualify as replacement shares.
• Asset size threshold doubled from $50M to $100M, allowing larger companies to benefit.
• Longer reinvestment window: the rollover is available when replacement shares are acquired in the year of disposition or the following calendar year.

IMPACT FOR BUSINESSES: Founders, investors, and growth‑stage companies, particularly in tech, life sciences, and manufacturing, will gain more flexibility to redeploy capital without triggering immediate tax.

Foreign Affiliate Income: Revised Tax Factor for CCPCs and Introduction of the FABI Regime

The legislation introduces a new Relevant Tax Factor (RTF) for CCPCs and substantive CCPCs earning Foreign Accrual Property Income (FAPI). Also, the introduction of the Foreign Accrual Business Income (FABI) regime under section 93.4.

Highlights:

• CCPCs and substantive CCPCs are subject to a RTF of 1.9 on FAPI to eliminate deferral on passive income earned by a Controlled Foreign Affiliate, effectively mimicking the Refundable Dividend Tax on Hand (RDTOH) regime on passive income earned directly by CCPCs.
• To avoid double taxation, when CFAs pay a dividend to the CCPC, an addition to Capital Dividend Account will result to reflect the portion of the FAPI subject to the 1.9 RTF.
• Eligible taxpayers may elect under 93.4 to use the FABI regime on active income earned by certain CFAs to use a higher relevant tax factor (4 instead of 1.9) when calculating foreign tax deductions.
• Elections may apply retroactively in certain cases.
• Designed to align Canadian tax outcomes more closely with domestic treatment of similar income.

IMPACT FOR BUSINESSES: CCPCs and substantive CCPCs with controlled foreign affiliates, especially those earning income from real estate development, leasing, or cross‑border services will benefit from this legislation.

Trust Reporting: Narrowed Requirements and Clearer Rules for Bare Trusts

Background: Many businesses use arrangements that unintentionally create a bare trust, such as holding real estate in one party’s name while another is the beneficial owner, partners holding title to property on behalf of a partnership, corporations holding assets on behalf of related entities, and/or joint ventures where one party is on title for convenience.  These arrangements may require a T3 return and Schedule 15 disclosure.

The new legislation refines the trust reporting rules that were significantly expanded in recent years.

Highlights:

• More trusts are now exempt from filing unless they meet additional criteria (e.g., tax payable in the year).
• Schedule 15 exemptions apply to listed trusts.
• Removal of broader requirement to have bare trusts file a tax return for tax years ending after December 31, 2024.
• For 2026 and beyond, bare trusts must file if they meet certain criteria in new 150(1.3).
• Bare trust definition clarified, with carve‑outs for:
  • Principal‑residence title arrangements
  • Situations where legal and beneficial owners are the same
  • Certain partnership title‑holding structures
• Employee Ownership Trusts (EOTs).
• The $10M capital gains exemption for qualifying sales is preserved.
• Ordering rules to deal with multiple exemptions claimed in the same tax year (e.g. Employee Ownership Trust Capital Gains Exemption and Lifetime Capital Gains Exemption)
• Clarifications provided on holding period tests and “actively engaged” requirements to allow for holding corporation situations.
• Capital gains on qualifying transfers are eliminated after 10 years if no disqualifying events occur.

IMPACT ON BUSINESSES: Organizations must analyze whether their arrangements qualify for an exemption. EOTs may also become a more viable succession planning tool but this requires careful oversight and ongoing compliance.

SR&ED Enhancements: Expanded Access and Higher Expenditure Limits

Bill C‑15 implements major updates to the SR&ED program, effective for taxation years beginning on or after December 16, 2024.

Highlights:

• Enhanced credit expenditure limit doubled from $3M to $6M.
• Phase‑out thresholds increased from $10M-$50M to $15M–$75M of taxable capital.
• Eligible Canadian Public Corporations (ECPCs) can now access the enhanced 35% refundable credit.
• CCPCs may elect to use the ECPC phase‑out structure.

IMPACT ON BUSINESSES: These changes broaden access to enhanced SR&ED credits and support innovation across both private and public Canadian companies.

Clean Economy Investment Tax Credits: New Opportunities for Green Investment

The new Bill introduces the Clean Electricity ITC and expands three previously implemented ITCs: Clean Technology (CT), Clean Technology Manufacturing (CTM), and Carbon Capture, Utilization and Storage (CCUS).

Clean Electricity ITC

• Applies to qualifying corporations and certain Crown entities.
• Retroactive to April 16, 2024, for projects not started before March 28, 2023.
• Supports investments in clean power generation and transmission.
• Financing provided by government corporations will not reduce the cost of eligible property when computing the credit.

Updates to existing ITCs

• Clean Technology ITC: now includes property acquired on or after November 21, 2023, that supports waste‑biomass‑based electricity and heat.
• Clean Technology Manufacturing ITC: expanded to include polymetallic projects and critical minerals (e.g., antimony, gallium, scandium).
• CCUS ITC: phase‑out delayed to 2035; full cancellation in 2040.

IMPACT ON BUSINESSES: The clean economy investment credits can assist businesses in reducing the cost of adopting clean technologies and building low‑carbon infrastructure, and strengthen their long‑term competitiveness.

 Transfer Pricing Overhaul: Stronger Alignment with OECD Standards

Bill C‑15 modernizes Canada’s transfer pricing rules, incorporating Organization for Economic Co-operation and Development (OECD) concepts directly into legislation.  The amendments apply to taxation years beginning after November 4, 2025.

Highlights:

• Focus on economic substance and “actual conditions” not just legal form.
• CRA may assess whether independent parties would have entered the same transaction.
• Expanded contemporaneous documentation requirements.
• Revised penalty and adjustment framework.

 IMPACT ON BUSINESSES: Multinationals face heightened scrutiny and must ensure documentation is robust, timely, and aligned with OECD principles.

Canadian Capital Cost Allowance (CCA) Incentives and Immediate Expensing: Productivity‑Focused Measures

The new legislation includes several measures to accelerate capital investment and provide immediate expensing for certain assets.

Accelerated Investment Incentive

• Applies to most new depreciable property available for use before 2030.
• No half‑year rule for eligible property available for use before 2034.
• Includes purpose‑built rental housing meeting specific criteria.

 Immediate Expensing

• Applies to manufacturing and processing equipment, clean energy assets, and zero‑emission vehicles acquired after 2024 and available for use before 2030.
• Productivity‑enhancing assets (e.g., patents, data infrastructure) qualify for immediate expensing if available for use before 2027.

IMPACT ON BUSINESSES: The accelerated CCA incentives lower the after‑tax cost of capital investments by allowing businesses to deduct a larger portion of asset costs sooner, improving cash flow and speeding up returns on new equipment, technology, and infrastructure.

Repealed Taxes Under Bill C‑15

The following taxes have been repealed:

• Digital Services Tax (DST) repealed effective June 20, 2024. Payments already made to the CRA will be fully refunded with interest calculated at the prescribed rate from the date of payment to the date of refund.
• Underused Housing Tax (UHT). Elimination of the UHT as of the 2025 calendar year. No UHT is payable and no UHT returns are required to be filed for 2025 and subsequent calendar years.
• Luxury tax. No luxury tax on aircraft and vessels effective November 5, 2025. The luxury tax continues to be payable on subject vehicles valued above $100,000 unless and exemption applies.

IMPACT ON BUSINESSES: The repeal eases administrative pressure on businesses and removes tax frameworks that had created ongoing complexity.

Increasing the Lifetime Capital Gains Exemption (LCGE)

The new legislation enacts a increase to the LCGE which can be claimed on Qualified Small Business Corporation (QSBC) shares for dispositions occurring after June 24, 2024:

• Previous limit of $1,016,836 increased to $1.25M .
• The limit of $1.25M is indexed to inflation for the 2026 tax year and beyond.

IMPACT ON BUSINESSES: Increased relief from taxation on capital gains on QSBC shares.  Need to plan appropriately to ensure the full LCGE can be claimed on a sale to third parties or on a sale to children via the Intergeneration Business Transfer (IBT) rules.