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Issues and submissions

Issues and submissions2022-10-21T12:10:29-04:00

Advocacy in action

CALU envisions a Canada where people in all communities have financial security. Our advocacy efforts leverage the financial expertise of our members and share that knowledge openly with government in support of informed public policy. Here are some examples of our advocacy in action.

Intergenerational business transfers

CALU was a determined advocate for a change to section 84.1 of the Income Tax Act, an anti-avoidance rule that created unfair tax penalties for business owners who chose to sell their business to a family member rather than an arm’s-length buyer. Over the years, CALU made several submissions to the federal government and had many meetings with MPs and Senators seeking a change to rules that undermined the futures of many small businesses and their owners.

As part of its advocacy, CALU actively supported the adoption of Bill C-208, a private member’s bill introduced in 2020, that sought to permit the transfer of shares in a private corporation to a child or grandchild of the business owner on similar tax basis as with arm’s-length sales. CALU appeared before the House of Commons Standing Committee on Finance to speak in support of the Bill (CALU testimony starts at 17:04 mark). Through the efforts of CALU and other organizations, Bill C-208 passed Royal Assent and became law on June 29, 2021.

However, the Department of Finance expressed concerns that the exception provided by Bill C-208 is too broad and could result in certain tax avoidance transactions. It formalized these concerns by announcing in July 2021 that it planned to amend section 84.1 to restrict such opportunities for tax avoidance, while ensuring such amendments would not be retroactive in effect.

In Budget 2022 the federal government announced a consultation process for stakeholders to share their views as to how the existing rules could be strengthened to protect the integrity of the tax system while continuing to facilitate genuine intergenerational business transfers. CALU participated in these consultations by way of submission and is currently awaiting the potential tabling of new legislation in fall 2022.

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Submissions to government

The following are examples of advocacy activities undertaken by CALU to inform and engage with policy makers. For a longer list of our submissions to government, CALU members can log in to the members portal.

CALU submission on draft legislation governing ELHTs

In this submission CALU will comment specifically on modifications to the “25%/75%” test for key employees so it will be determined at the trust (plan) level; changes that permit up to $2,500 for funding the costs of private health services plans (PHSPs) for key employees and family members; and other matters relating to the provision of health and welfare benefits for employees of small businesses.

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