Budget 2025: Implications for Financial Institutions
The federal government has announced plans to amend the Income Tax Act, ensuring Canadian multinational insurers pay tax on their Canadian insurance business, even when operating through a foreign subsidiary.
The change will "clarify that income derived from assets held by a foreign affiliate of a Canadian insurance company that supports Canadian insurance risks is taxable in Canada,"
This amendment is expected to generate $255 million in additional tax revenue over four years, starting in 2026-27, with $50 million in the first year and around $70 million in each subsequent year.
Additionally, the government plans to prohibit investment and registered account transfer fees and require timely transfers of these accounts.
Author's summary: Budget 2025 impacts financial institutions with tax changes.
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