Summary#

This bill implements parts of Canada’s December 14, 2021 Economic and Fiscal Update. It creates and changes tax credits, sets a new tax on underused housing owned by non-resident, non-Canadians, funds COVID-19 measures, and adjusts Employment Insurance for seasonal workers. Several measures apply retroactively to 2021.

• Creates a 25% refundable tax credit for businesses that improve ventilation (September 1, 2021–December 31, 2022), with per-location and per-entity caps (Part 1; Regulations Part XCVII).
• Expands the Northern Residents Deduction travel component to allow a standard amount up to $1,200 per person if no employer travel benefit (2021 onward) (Part 1).
• Increases the School Supplies Tax Credit for eligible educators from 15% to 25% and adds certain devices (2021 onward) (Part 1).
• Returns fuel charge proceeds to farming businesses via a refundable tax credit in designated provinces (2021 onward) (Part 1).
• Enacts a 1% Underused Housing Tax on vacant or underused Canadian residential property owned by non-resident, non‑Canadians, with filing, exemptions, and penalties (effective January 1, 2022; first payment due April 30 following year) (Underused Housing Tax Act Parts 1–4).
• Authorizes up to CAD $2.12 billion in payments for school ventilation, provincial proof-of-vaccination, and COVID‑19 tests (Parts 4–6).
• Sets temporary EI rules to extend maximum weeks for certain seasonal workers (benefit periods starting September 26, 2021–October 29, 2022) (Part 7).

What it means for you#

• Households

  • Northern residents: May claim travel costs up to a standard $1,200 per person even without employer travel benefits, subject to limits on number of trips and other rules (2021 onward) (Part 1; s.110.7; Regulations s.7304).
  • Non-resident, non‑Canadian homeowners: Must file an annual return and pay a 1% tax on the value of vacant or underused residential properties in Canada unless an exemption applies; payment due by April 30 of the following year (Underused Housing Tax Act, Part 3 s. (3), (6); Part 4).
  • Exemptions include primary residence, sufficient qualifying occupancy (180+ days), new ownership, disaster/renovation periods, seasonal inaccessibility, and others (Underused Housing Tax Act s. (7)–(9)).

• Workers

  • Seasonal workers: If you meet set conditions and live in listed regions, you may qualify for more weeks of EI regular benefits during benefit periods starting September 26, 2021–October 29, 2022 (Part 7; s.12(2.3)–(2.5)).

• Educators

  • Eligible educators: Credit rate rises to 25% on up to $1,000 in eligible supplies per year (max credit $250). Devices such as laptops, tablets, webcams, and projectors now qualify if not provided by your employer for use outside the classroom (2021 onward) (Part 1; s.122.9; Regulations s.9600).

• Businesses

  • All eligible entities (including individuals carrying on business, partnerships, and qualifying CCPCs): May claim a refundable credit equal to 25% of qualifying ventilation expenses incurred September 1, 2021–December 31, 2022. Caps: up to $10,000 in eligible expenses per location and $50,000 per entity across all locations (affiliated entities share limits). Max credit is effectively up to $12,500 per entity for the period (Part 1; s.127.43; Regulations Part XCVII).
  • CEBA borrowers: Government set a six‑year limitation period to sue for recovery after default, with rules on acknowledgments and set-off against federal payments (Part 3).

• Farmers

  • Farming businesses in designated provinces: New refundable tax credit returns fuel charge proceeds. The amount depends on your eligible farming expenses, your share earned in each province, and an annual payment rate set by the Minister of Finance (2021 onward) (Part 1; new section following s.127.41).

• Provinces and territories

  • School ventilation: Federal payments capped at $100 million, with specified maximums by jurisdiction (Part 4).
  • Proof of vaccination: Federal payments up to $300 million total (Part 5).
  • COVID‑19 tests: Federal payments up to $1.72 billion; Health Minister must report to Parliament quarterly on payments, tests purchased, and distribution (Part 6).

Expenses#

Estimated net cost: CAD $2.12 billion in authorized direct payments (timing varies); revenue impacts from tax credits and the Underused Housing Tax are not quantified in the bill.

• Direct appropriations authorized:

  Item	Amount	Frequency	Source
  School ventilation funding to provinces/territories	CAD $100 million	One-time cap	Part 4 (maximums by jurisdiction)
  Provincial proof-of-vaccination support	CAD $300 million	One-time cap	Part 5
  COVID-19 tests (federal purchases/distribution)	CAD $1.72 billion	One-time cap (expenses on/after April 1, 2021)	Part 6; reporting required

• Tax measures (revenue effects):

  • Ventilation Improvement Tax Credit (25%; caps noted): Data unavailable.
  • Northern Residents Deduction expansion (travel component): Data unavailable.
  • School Supplies Tax Credit increase to 25% and expanded eligibility: Data unavailable.
  • Refundable credit returning fuel charge proceeds to farmers: Payment rates set by Minister of Finance; Data unavailable (Part 1).
  • Underused Housing Tax 1% on underused homes owned by non‑resident, non‑Canadians: Revenue impact Data unavailable (Underused Housing Tax Act).

• Administration/enforcement costs (e.g., CRA for UHT): Data unavailable.

• EI seasonal workers temporary extension: Data unavailable.

Proponents' View#

• Improves indoor air quality in workplaces and schools by lowering costs of HVAC upgrades and HEPA filtration; the business credit covers 25% of eligible costs within specified caps, and $100 million supports school projects (Part 1 s.127.43; Regulations Part XCVII; Part 4).
• Provides targeted relief to educators by raising the refundable rate to 25% and adding modern teaching devices, increasing the maximum annual benefit to $250 per educator (Part 1; s.122.9; Regulations s.9600).
• Supports northern residents with a simpler option to claim up to a $1,200 standard travel amount per person when no employer benefit exists (2021 onward) (Part 1; s.110.7).
• Returns fuel charge proceeds to farming businesses through a refundable credit tied to eligible farming expenses and provincial shares (Part 1; new section after s.127.41).
• Discourages vacant housing and increases supply by imposing a 1% annual tax on underused homes owned by non‑resident, non‑Canadians, with clear exemptions and modern enforcement tools (Underused Housing Tax Act Parts 1–4, 7).
• Gives seasonal workers in specified regions more predictable EI coverage during 2021–2022 under defined criteria (Part 7; s.12(2.3)–(2.5)).

Opponents' View#

• Compliance burden and penalties under the Underused Housing Tax may be high for affected owners, with minimum failure‑to‑file penalties of $5,000 for individuals and $10,000 for corporations, plus percentage add‑ons (Underused Housing Tax Act Div. 8 s.(1)–(2)).
• Ventilation tax credit rules are complex (affiliation, per‑location and per‑entity caps, excluded costs), which may raise administrative costs and limit uptake (Part 1 s.127.43; Regulations Part XCVII).
• Expanding refundable and non‑refundable tax measures reduces federal revenues; the bill provides no public cost estimates for these changes (Part 1). Data on expected UHT revenues is also not provided in the bill (Underused Housing Tax Act).
• Returning fuel charge proceeds to farmers via a formula set by the Minister of Finance introduces uncertainty on payment rates and distribution until rates are specified (Part 1; “payment rate” defined and designated by the Minister).
• The EI seasonal extension is time‑limited and geographically targeted, which may create uneven support across regions and could be complex to administer given multi‑year eligibility tests (Part 7; s.12(2.3)–(2.5)).