Summary#

This federal budget bill (Fall Economic Statement Implementation Act, 2022) makes wide tax and program changes. It targets housing, student debt, clean energy, mining, cannabis/vaping duties, banking taxes, charities, and First Nation land management. It also sets up funding for the Canada Growth Fund.

• Housing: new anti‑flipping rule, Tax‑Free First Home Savings Account (FHSA), double the First‑Time Home Buyers’ Tax Credit, and a Multigenerational Home Renovation Tax Credit (Part 1).
• Students/apprentices: permanent elimination of interest on federal student and apprentice loans starting April 1, 2023 (Part 4, Div. 5).
• Banks/insurers: a one‑time “Canada Recovery Dividend” and a permanent 1.5% tax rate increase on income over $100 million (Part 1).
• Natural resources and clean tech: 30% Critical Mineral Exploration Tax Credit; extend clean‑energy write‑offs to air‑source heat pumps (Part 1).
• Cannabis/vaping: quarterly duty remittances for some cannabis licensees; new stamping/marking rules for vaping (Part 2).
• First Nations land: enacts the Framework Agreement on First Nation Land Management and repeals the prior Act (Part 4, Div. 3).
• Creates Canada Growth Fund structure and authorizes up to CAD $2 billion from the Consolidated Revenue Fund (Part 4, Div. 1).

What it means for you#

• Households and homebuyers

  • Anti‑flipping rule: Profit on a Canadian home sold within 365 days is taxed as business income; losses denied. Life‑event exceptions apply (death, divorce, new job, etc.). Applies to sales after 2022 (Part 1, s. 12(12)–(14)).
  • FHSA: First‑time buyers can contribute up to $8,000/year, $40,000 lifetime, with tax‑deductible contributions and tax‑free withdrawals for a first home (starts April 1, 2023). Excess contributions face a 1%/month tax (Part 1, s. 146.6; s. 207.021).
  • First‑Time Home Buyers’ Tax Credit: Base amount increased to $10,000 for 2022+, worth up to $1,500 (Part 1, s. 118.05(3)).
  • Multigenerational Home Renovation Tax Credit: 15% credit on up to $50,000 to build a secondary unit for a senior (65+) or an adult with a disability to live with a relative; max benefit $7,500; one claim per qualifying individual (2023+) (Part 1, s. 122.92).
  • Underused Housing Tax vacation property exemption: Properties in certain rural areas used at least 28 days/year can be exempt (2022+) (Part 3; UHT Regulations).

• Students and apprentices

  • No interest on Canada Student Loans and Canada Apprentice Loans starting April 1, 2023. Interest accrued before that date still owed (Part 4, Div. 5).
  • Clarifies repayment timing during the 2021‑2023 interest suspension for apprentice loans (Part 4, Div. 5).

• Families using fertility services

  • Medical Expense Tax Credit expanded to include eligible Canadian surrogacy and donor costs and fees to fertility clinics/donor banks for 2022+ (Part 1, s. 118.2(2.21), (2)(v)).

• Seniors and people with disabilities

  • May benefit from the Multigenerational Home Renovation Tax Credit if moving into a new secondary unit with a relative (Part 1, s. 122.92).

• Small businesses

  • More access to the small business tax rate as the phase‑out now runs up to $50 million in taxable capital (for years beginning on/after April 7, 2022) (Part 1, s. 125(5.1)(a)).

• Banks, life insurers, and their customers/investors

  • Canada Recovery Dividend: a temporary, one‑time 15% tax based on average 2020–2021 taxable income over $1 billion, payable over five years (2022 tax year) (Part VI.2).
  • Additional 1.5% tax on taxable income over $100 million (years ending after April 7, 2022) (Part 1, s. 123.6).

• Investors and charities

  • 30% Critical Mineral Exploration Tax Credit for flow‑through share investors on specified Canadian critical‑mineral exploration (agreements Apr 7, 2022–Mar 31, 2027) (Part 1, s. 127(9)).
  • Charities’ disbursement quota increased to 5% for investment assets above $1,000,000; 3.5% remains below that; Minister can reduce on application (for years starting Jan 1, 2023) (Part 1, s. 149.1).

• Cannabis and vaping producers/retailers

  • Eligible cannabis licensees can remit excise duty quarterly instead of monthly (from April 1, 2022), and licensed transfers of packaged, unstamped product are allowed under authorized service agreements (Part 2).
  • New marking/stamping and storage rules for vaping products (Part 2).

• Trusts and simple “bare trust” arrangements

  • Many Canadian “express” trusts, including certain bare trusts, must file annual returns listing trustees, settlors, beneficiaries, and controlling persons for years ending after December 30, 2023; penalties apply (Part 1, s. 150(1.2), 163(5)–(6)).

• Non‑resident sellers of Canadian residential property

  • CRA can refuse the clearance certificate if Underused Housing Tax filings or payments for the property are outstanding (Part 1, s. 116(8)).

Expenses#

Estimated net fiscal impact: Mixed (new spending and tax relief; new revenues from bank/insurer taxes). Overall net: Data unavailable.

Notes:

• The bill text sets the CAD $2.0 billion authority for Canada Growth Fund shares (Part 4, Div. 1).
• Fiscal cost of student loan interest elimination is from the federal Fall Economic Statement 2022 (official) (FES 2022, Chapter 3).
• Other measure-by-measure fiscal impacts are not stated in the bill text. Public budget documents provide context but not all itemized figures in this bill. Where not certain, “Data unavailable.”

Proponents' View#

• Eases first‑time home purchases: FHSA allows $8,000/year, $40,000 lifetime, with deductible contributions and tax‑free withdrawals; the Home Buyers’ Credit doubles to $10,000 base (worth up to $1,500) (Part 1, s. 146.6; s. 118.05(3)).
• Curbs rapid flipping: Profits on homes sold within 1 year are fully taxable as business income, with clear life‑event exceptions (sales after 2022) (Part 1, s. 12(12)–(14)).
• Supports multigenerational living: 15% credit on up to $50,000 to add a secondary unit for a senior or adult with a disability, up to $7,500 back (2023+) (Part 1, s. 122.92).
• Reduces student debt burden: Permanently ends interest on federal student and apprentice loans starting April 1, 2023; FES 2022 estimated a 5‑year cost of about CAD $2.7 billion, directly lowering borrowers’ costs (Part 4, Div. 5; FES 2022).
• Raises revenue from largest financial institutions: One‑time 15% Canada Recovery Dividend and a 1.5% permanent surcharge on income over $100 million (years ending after April 7, 2022) (Part VI.2; Part 1, s. 123.6).
• Accelerates critical minerals and clean energy: 30% exploration credit for specified critical minerals and tax measures for air‑source heat pumps (Part 1, s. 127(9); Regs Class 43.1).

Opponents' View#

• Housing demand may rise faster than supply: FHSA and a larger credit could boost demand and prices unless supply grows; the bill does not add housing units (assumption risk) (Part 1).
• Anti‑flipping rule could catch valid short‑term sales: Despite exceptions, some urgent personal or market reasons may not qualify; losses are denied, increasing tax risk (Part 1, s. 12(14)).
• Broad trust reporting may burden ordinary people: Bare trust arrangements (e.g., adding a family member to title) face new filing and steep penalties (min $2,500 or 5% of highest asset value), with confusion and compliance costs (Part 1, s. 150(1.2), 163(5)–(6)).
• Bank/insurer taxes may be passed through: Institutions could offset costs with higher fees, lower savings rates, or reduced dividends; impact on lending is uncertain (Part VI.2; Part 1, s. 123.6). Assumption risk.
• Charity payout increase could strain smaller endowments: A 5% disbursement quota above $1,000,000 may force asset sales in weak markets; the Minister can reduce quotas case‑by‑case, but relief is not automatic (Part 1, s. 149.1).
• Phasing out flow‑through shares for oil, gas and coal may reduce exploration/jobs in those sectors; transition support is limited in the bill text (Part 1, s. 66(12.6), (12.62)).