For years CALU has been advocating for a change to section 84.1 of the Income Tax Act, an anti-avoidance rule that applies where owners of a private corporation sell shares to another corporation controlled by family members. On June 22, 2021 that advocacy paid off when the Senate adopted Bill C-208. The final remaining step before the bill becomes law is for it to receive Royal Assent which currently comes from the Chief Justice of Canada.
Bill C-208, a private member’s bill which created a limited exemption from section 84.1 on the sale of qualified small business corporation shares, was introduced by Larry Maguire, a Conservative MP. CALU worked closely with MP Maguire’s office and proactively supported the passage of the bill in Parliament. Not only did this advocacy involve countless meetings with MPs and senators, but it was bolstered by past chair Cindy David and CALU tax advisor Kevin Wark appearances before the House of Commons Standing Committee on Finance. A huge debt of gratitude is owed to volunteers and members who put in countless hours in support of these changes to section 84.1. This is what good government relations and advocacy looks like.
CALU plans to provide further updates on the progress of this bill, as well as a more detailed summary on the changes to section 84.1 to members in the near future. In the meantime, please feel free to contact CALU president & CEO Guy Legault or tax advisor Kevin Wark if you have any comments or questions.
