Forward Regulatory Plan: 2021-2023
This Forward Regulatory Plan provides information on regulatory proposals that the Canada Revenue Agency intends to propose or finalize in the next two years through:
- pre-publication in the Canada Gazette, Part I; and/or
- final publication in the Canada Gazette, Part II.
The Forward Regulatory Plan may also include regulatory initiatives that are planned to be brought forward over a longer time frame. Comments or enquiries can be made using the Canada Revenue Agency contact information included with each regulatory initiative.
Regulatory Initiatives
Regulatory initiatives planned or anticipated to be proposed or finalized between 2021 and 2023:
Regulations Made Under the Income Tax Act
- Canada Pension Plan and/or the Quebec Pension Plan - Exclusion of additional contributions from base pay calculations
- Common Reporting Standard - Part XIX Information Return
- Miscellaneous Amendments – Prescribed Donees, Prescribed Information Returns New
- Northern residents travel deductions
Regulations Made Under the Excise Act, 2001
Canada Pension Plan and/or the Quebec Pension Plan - Exclusion of additional contributions from base pay calculations
Enabling Act: Income Tax Act
Description: The Canada Pension Plan Act was amended in 2016 in order to enhance the Canada Pension Plan (CPP) retirement and supplemental benefits. These enhancements became effective in 2019 and are being funded by additional contributions by employees, employers and self-employed individuals. As part of the CPP enhancement, the Income Tax Act was later amended to provide for a tax deduction for employee additional contributions (as well as the "employee" share of contributions by self-employed persons) to the enhanced portion of the CPP.
In 2018, the Quebec Pension Plan (QPP) was also enhanced in a manner similar to the CPP. In 2018, the Income Tax Act was again amended to provide for a deduction for employee additional contributions, as well as the "employee" share of contributions by self-employed individuals, to the enhanced portion of the QPP.
As a result of the introduction of these new tax deductions, amendments to the Income Tax Regulations are required to ensure that the amount of the employee’s additional CPP and/or QPP contributions are taken into account when calculating the individual’s base income for purposes of deducting or withholding income taxes.
Regulatory cooperation efforts (domestic and international): No regulatory cooperation efforts are required.
Potential impacts on Canadians, including businesses: The proposed change to the Income Tax Regulations will serve to provide that the employee’s additional CPP and/or similar QPP contributions are to be taken into account for purposes of calculating the individual’s remuneration from which income tax deductions are determined. The proposed amendment does not impose any additional administrative burden on the employers. The “One-for-One” Rule and the small business lens do not apply.
Consultations: No further consultations are planned given that the amendment is consequential to amendments to the Income Tax Act and only serves to provide that the amount of the employee’s additional CPP and/or QPP contributions are to be taken into account in the calculation of the base income used for calculating the amount to be withheld for income tax purposes.
Further information:
- Changes to the rules for deducting Canada Pension Plan (CPP) contributions
- Payroll deductions and contributions
CRA contact:
Claire Arjang
Manager, Regulatory Affairs Section
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency
Email: Regulations-Reglements@cra-arc.gc.ca
Date the regulatory initiative was first included in the Forward Regulatory Plan: 2019-04-01
Common Reporting Standard - Part XIX Information Return
Enabling Act: Income Tax Act
Description: In order to combat international tax evasion and avoidance, beginning in 2018, every Canadian financial institution is required to provide the Minister of National Revenue with information regarding their non-resident account holders by filing, with the Canada Revenue Agency (Agency), a Part XIX information return on or before May 2nd of each year in an electronic format.
The Act currently provides for general penalties for failing to file on time or in the required format. However, since these penalties are considered to be excessive in cases where the non-compliance is with respect to large numbers of information returns, reduced penalties are available where numerous information returns of a type prescribed in the Regulations are filed late or not in electronic format by the same filer.
Amendments to the Income Tax Regulations are required in order to add the Part XIX information return to the existing lists of prescribed returns to which the reduced penalties apply.
Regulatory cooperation efforts (domestic, international): No regulatory cooperation efforts are required.
Potential impacts on Canadians, including businesses: The proposed amendment only affects one specific sector (financial institutions) and does not impose any additional administrative burden on that sector. The ‘One-for-One’ Rule and the small business lens do not apply.
The proposed amendment is relieving in nature in that it will allow a reduced penalty to be applied where a financial institution files a Part XIX information return late or not in electronic format.
Consultations: No further consultations are planned given that the requirement to file the information return is found in the Income Tax Act. This proposed amendment only affects one specific sector (financial institutions) and does not impose any additional administrative burden on that sector.
Further information:
- Guidance on the Common Reporting Standard
- Common Reporting Standard
- Part XIX Information Return – International Exchange of Information on Financial Accounts
- How to complete and file a Part XIX Information Return – International Exchange of Information on Financial Accounts slips and summary
- Guidance on the Canada-U.S. Enhanced Tax Information Exchange Agreement
CRA contact:
Claire Arjang
Manager, Regulatory Affairs Section
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency
Email: Regulations-Reglements@cra-arc.gc.ca
Date the regulatory initiative was first included in the Forward Regulatory Plan: 2019-04-01
Miscellaneous Amendments – Prescribed Donees, Prescribed Information Returns
Enabling Act: Income Tax Act
Description: These amendments to the Income Tax Regulations (ITRs) relate to two unrelated provisions:
1. An amendment to section 3504 of the ITRs to include American Friends of Nature Conservancy of Canada, Inc. (AFNCC) and American Friends of Canadian Nature Inc. (AFCN) on the list of prescribed donees.
A prescribed donee is a charity outside of Canada whose purpose is to hold title to land in Canada or to transfer land to a registered charity in Canada for conservation purposes.
AFCN was first added to the list of prescribed donees in the ITRs in 2007 under the name of Friends of the Nature Conservancy Canada, Inc. The organization changed its name to AFNCC in 2015 and then again in 2018 to the AFCN.
The purpose of this amendment is to add the organization’s legal names from 2015 to 2018 and from 2018 onward to the list of prescribed donees to ensure that any charitable transactions receipted by this organization are considered valid.
2. An amendment to subsection 205(3) of the ITRs to reflect the correct name of the Part XVIII Information Return – International Exchange of Information on Financial Accounts on the list of prescribed information returns subject to reduced late filing penalties. Currently the information return is listed as the International Exchange of Information on Financial Accounts Information Return (Part XVIII of the Act). This proposal will align the correctly named reference of the prescribed form with that used in CRA publications.
Regulatory cooperation efforts (domestic, international): These administrative amendments do not require regulatory cooperation efforts.
Potential impacts on Canadians, including businesses:
1. To the extent Canadians making donations to this American charity have income from the United States, they will benefit from making a valid donation to a prescribed donee. Absent this amendment, their donation may be invalidated.
2. Financial institutions filing these information returns will be able to easily identify this return on the prescribed list of information returns eligible for reduced penalties.
Consultations: Due to the administrative nature of these amendments, no consultation is required.
Further information:
- CRA policy/guidance: Prescribed donees
- Income Tax Regulation 3504 – Prescribed Donees
- How to complete and file a Part XVIII Information Return – International Exchange of Information on Financial Accounts slips and summary
- Income Tax Regulation 205(3) Date Returns to be Filed – prescribed information returns
CRA contact:
Claire Arjang
Manager, Regulatory Affairs Section
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency
Email: Regulations-Reglements@cra-arc.gc.ca
Date the regulatory initiative was first included in the Forward Regulatory Plan: 2021-07-30
Northern Residents Travel Deductions
Enabling Act: Income Tax Act
Description: As part of the Northern Residents Deductions, the travel benefits deduction can be claimed for trips taken by the individual, or their household members living with them at the time of the trip, for vacation, family or medical reasons (maximum of two non-medical trips per person) that start from a prescribed zone. Currently, the maximum deduction for each eligible trip is the lowest of the following three amounts:
- the value of the travel benefit received from the employer;
- the actual cost of the trip (supported by receipts); and
- the lowest return airfare available at the time of the trip between the airport closest to the taxpayer’s residence and the nearest designated city to that airport.
These maximum deduction rules, including the list of designated cities, are contained in the Income Tax Regulations.
The objective of this proposal is to reduce the administrative burden for taxpayers and their representatives when claiming the travel benefits deduction, specifically regarding the requirement to determine the lowest return airfare ordinarily available at the time a trip is made. The proposed amendment would instead require that a reasonable amount in respect of return airfare be obtained for the date of travel within a reasonable amount of time of when the trip is made.
Under the amended wording, the airfare amount could more easily be obtained as it could be documented prior to the date of travel and there would no longer be the requirement to ensure that it was the lowest airfare available. The airfare would still have to correspond to the day of travel.
Regulatory cooperation efforts (domestic, international): No regulatory cooperation efforts are required.
Potential impacts on Canadians, including businesses: There may be business impacts. The small business lens may apply.
The small business lens requires federal regulators to identify and take into account the needs of small businesses when designing regulations. If small businesses will be impacted, further analysis must be undertaken.
Consultations: The Canada Revenue Agency (Agency) travelled to northern Canada in 2016 as part of the Serving You Better consultations. In addition, a regulatory consultation paper detailing the proposal to simplify the lowest return airfare requirement was published on Canada.ca in 2019.
Canadians will have a further opportunity to provide input when the proposed regulations are pre-published in Canada Gazette, Part I for a 30 day comment period.
Further information:
- Income Tax Regulation 7304 (4) – Prescribed Amounts and Areas
- Guide: RC4650 Northern Residents Deductions for 2020
CRA contact:
Claire Arjang
Manager, Regulatory Affairs Section
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency
Email: Regulations-Reglements@cra-arc.gc.ca
Date the regulatory initiative was first included in the Forward Regulatory Plan: 2018-10-01
Prescribed Brands of Tobacco Products
Enabling Act: Excise Act, 2001
Description: Under the Excise Act, 2001 (the Act), the export of tobacco products not intended for entry into the Canadian duty-paid market are subject to a special duty and must be specifically marked to indicate that excise duty has not been paid. Relieving provisions in the Act conditionally exempt certain brands of manufactured tobacco and cigarettes from the tobacco marking requirements and the special duty.
These brands are prescribed in the Schedules to both the Regulations Respecting Prescribed Brands of Manufactured Tobacco and Prescribed Cigarettes (the Marking Regulations) and the Regulations Relieving Special Duty on Certain Tobacco Products (the Special Duty Regulations).
These Regulations seek to add 29 brands to Schedule 1 and three brands to Schedule 2 of both the Marking Regulations and the Special Duty Regulations.
Regulatory cooperation efforts (domestic, international): Given the legislative framework in Canada and the administrative nature of the amendment, there is no associated regulatory cooperation or alignment component.
Potential impacts on Canadians, including businesses: There is a benefit for tobacco manufacturers that meet legislated requirements and are relieved from Canadian tobacco marking requirements. Relief from the marking requirements enables tobacco manufacturers to be more competitive in foreign markets by allowing them to enter into contracts to manufacture particular tobacco products exclusively for export markets.
Tobacco manufactures who have brands prescribed in the appropriate schedule of the Special Duty Regulations, benefit from the removal of the administrative costs associated with the application for a refund of special duty paid.
Consultations: Excise Duty Notice EDN65 - Information for Tobacco Manufacturers – Prescribed Brands of Tobacco Products was published on July 21, 2020 on the CRA web site to inform tobacco manufacturers of the CRA’s intention to put forward a proposal for regulatory amendments and to invite them to submit brand names for consideration. An opportunity for tobacco manufacturers to contact the CRA with questions or comments was provided in the notice.
Further information:
- Excise Duty Notice EDN65 – Information for Tobacco Manufacturers – Prescribed Brands of Tobacco Products
- Regulations Respecting Prescribed Brands of Manufactured Tobacco and Prescribed Cigarettes
- Regulations Relieving Special Duty on Certain Tobacco Products
CRA contact:
Claire Arjang
Manager, Regulatory Affairs Section
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency
Email: Regulations-Reglements@cra-arc.gc.ca
Date the regulatory initiative was first included in the Forward Regulatory Plan: 2021-07-30
Consult the Canada Revenue Agency’s acts and regulations web page for:
- a list of acts and regulations administered by the Canada Revenue Agency ; and
- further information on the Agency’s implementation of government-wide regulatory management initiatives.
Consult the following for links to the Cabinet Directive on Regulation and supporting policies and guidance, and for information on government-wide regulatory initiatives implemented by departments and agencies across the Government of Canada:
To learn about upcoming or ongoing consultations on proposed federal regulations, visit:
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