As many readers know, Stephen Harper and the Conservatives asked the Governor General to dissolve Parliament on September 7, 2008 and a Federal Election was called for October 14, 2008. While the pundits and the media will be working overtime for the next 34 days, what does this mean for income tax purposes?
There were a number of income tax bills before the House of Commons and the Senate. One bill in particular, Bill C-10, Income Tax Amendments Act, was before the Senate prior to the election call. Our blog entry of April 11, 2008 discussed some of the controversies with respect to this bill. It will now require re-introduction by the new parliament in order to be enacted. Bill C-10 contains the controversial non-resident trust rules, the foreign investment entity rules, amendments to the film tax shelter rules and other miscellaneous amendments, including the restrictive covenant proposals. In many tax practitioners’ opinions, the proposals contained in Bill C-10 are fundamentally flawed. Accordingly, some practitioners may view the dissolution of parliament as a positive move given that the introduction into law of these proposals will now obviously be delayed. However, on the other hand, the uncertainty continues and uncertainty is never a good thing in income tax law and practice. Bill C-10 has had a long and windy road to get to the stage where it is at. The Senate has taken a very close look (unusual some would say) at the proposed legislation. While many practitioners are happy about the close look that the Senate is performing, the continued delay of the implementation of the proposed rules causes practitioners many fits in deciding how to deal with various income tax matters that their clients may be impacted by.
Stay tuned, the saga continues.