On May 6, 2022, TEI submitted written comments to the Department of Finance concerning the government’s newly released draft legislative proposals to limit the amount of interest and other financing expenses that businesses may deduct for Canadian income tax purposes. These proposals were initially described in the federal budget documents tabled in Canada’s House of Commons on April 19, 2021 (“Budget 2021”), on which TEI provided preliminary comments last December. Consistent with our earlier submission, the enclosed comments raise a range of concerns with the draft legislation, including its potential to erode the competitiveness of Canada’s international tax system, the necessity of providing common-sense grandfathering rules, and its problematic application in certain industries, among other things.
TEI’s comments were developed jointly by a working group of interested members under the aegis of TEI’s Canadian Income Tax Committee, whose chair is Patricia Likogiannis.