Bill C-31, the Budget 2025 Implementation Act, No. 2, would amend many existing federal laws and create the Defence Investment Agency Act. Its stated goal is to put budget measures into law; it does not guarantee the results those measures aim for. The bill is proposed law: its provisions would take effect only if passed, and some also need a later start date set by the government.
It would change tax rules, including temporary faster tax deductions for some manufacturing buildings, new crypto-asset reporting, broader tax-audit information powers, and a rule allowing the Canada Revenue Agency (CRA) to file some people’s tax returns. The CRA may, but would not have to, file an eligible person’s return.
It would add a global minimum tax rule that can require Canadian entities in some multinational groups to pay top-up tax on low-taxed profits not already covered by specified minimum taxes elsewhere.
It would establish the Defence Investment Agency to assist a minister, and expand federal powers over defence and national-security procurement, production, stockpiling and investment. For certain contracts, competition would be required unless an exception applies.
It would prohibit federally regulated employers from agreeing to or imposing non-compete clauses, with exceptions. It would also let the federal government make orders affecting mineral rights in Nunavut when it considers them to be in the national interest.
It would shift responsibility for air-travel complaints to the Transport Minister, while allowing some complaints to be handled by the Canadian Transportation Agency or designated third parties. It would also change rules for financial institutions, bankruptcy-related conduct, pest-control reviews and Tax Court appeals.
Taxpayers and businesses: Some eligible new manufacturing buildings in Canada could qualify for a first-year deduction of up to 100% of their undepreciated cost before 2030, falling in later years. The building generally must have at least 90% of its floor space used for manufacturing or processing goods for sale or lease. Some tax changes are written to apply from dates before the bill could become law.
People with low taxable income: The CRA may file a return for some eligible Canadian residents who have not filed recently, if their income is reported to the CRA and other conditions are met. A person can tell the CRA not to file. This is not a requirement that people file, and the bill does not itself guarantee a benefit payment.
Taxpayers receiving the Canada Carbon Rebate: The bill would bar rebate payments for tax returns or adjustment requests filed after October 30, 2026.
Crypto-asset service providers and users: From 2027, covered providers would have to check users’ tax residence, report specified transaction information to the CRA and keep records. A reportable person or user whose controlling person is reportable must provide a tax identification number when asked, subject to exceptions; failure can lead to a $500 penalty.
Federally regulated workers: Employers could not impose or agree to non-compete clauses, or certain other restrictions later specified by regulation. Exceptions include some business-sale situations and specified senior roles. Existing clauses would not become void until one year after the prohibition starts.
Air passengers: The Minister must offer mediation for eligible complaints; if no agreement is reached, the Minister must decide within 90 days. The Governor in Council could instead route some complaints to designated third parties. Carriers would have to pay ordered compensation or refunds within 30 days.
Nunavut mineral-rights holders: An order could cancel certain licences, claim recordings or leases, or prevent renewals, transfers or new applications. The Minister must decide within 180 days—extendable by up to 180 days—whether compensation is payable and, for listed types of holders, how much.
Tax Court appellants: The bill would raise the informal-procedure limits to $50,000 for amounts in dispute and $100,000 for losses. The higher limits would not apply to appeals filed before the change starts.
No overall cost estimate is provided in the supplied material.
The bill would authorize up to $1 billion in certain payments for defence-related stockpiling, procurement and other listed purposes, with specified repayments and receipts deducted from that limit. The bill gives no estimate of expected spending.
It would also authorize other forms of defence financing, including grants, contributions, guarantees, insurance and some investments. The bill gives no total cost estimate for these powers.
It would set a proposed ceiling of $1 trillion for outstanding federal guarantees on certain securities and $500 billion for specified insured loans. These are limits, not direct spending appropriations; Parliament could authorize different amounts later.
The Transport Minister could set fees to recover some or all costs of handling complaints. No fee amount is given.
No publicly available information on the bill’s overall fiscal effect is included in the supplied material.
The supplied material does not include the current versions of the Acts being amended. I could not verify which rules are already in force and how much of the bill’s wording is new.
Many provisions have different start dates; some depend on regulations or an order in council. The material does not give all those dates.
The bill does not estimate staffing or operating costs for the Defence Investment Agency, the new tax-reporting duties or the complaint system.
Regulations would define which additional employment restrictions are prohibited and what counts as non-discriminatory selling of deposit products. Those details are not in the bill.
The bill allows the government to make some defence procurements without competition, including for national security, sensitive technology and other listed reasons. It does not require public disclosure of the reasons for excluding a supplier.
The bill appears intended to address tax avoidance and improve tax administration through broader information-gathering powers, new reporting rules and tighter rules for some corporate and trust arrangements.
Faster deductions for qualifying manufacturing buildings could encourage investment by lowering the tax cost in the earlier years.
A dedicated Defence Investment Agency and wider procurement powers could give the minister more tools to coordinate defence and security projects.
Allowing third parties to resolve some air-travel complaints could provide another way to work through complaints, while the bill sets deadlines and requires public reporting.
The bill gives ministers and the Governor in Council significant discretion over defence spending, contract exceptions and decisions affecting Nunavut mineral rights. Some decisions have limited explanation or review requirements in the bill.
The defence agency, expanded powers and new reporting duties could require public resources and create costs for businesses, but the supplied material does not estimate them.
Crypto-asset reporting and stronger tax-audit powers would collect or require more information. The bill does not set out a full account of the practical effects on users and affected taxpayers.
The non-compete rules depend partly on future regulations, so workers and employers cannot yet know the full scope of the restrictions.
A compensation decision for affected Nunavut rights holders is left to the Minister, and the bill rules out other compensation or relief beyond what the Minister determines.