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2024 Federal Budget – Other tax measures


Non-compliance with information requests

This budget proposes several amendments to the information gathering provisions in the Income Tax Act, including:

Notice of non-compliance

This budget proposes to allow the CRA to issue a new type of notice, the “notice of non-compliance”, to a person that has not complied with a requirement or notice to provide assistance or information issued by the CRA. A notice of non-compliance issued to the taxpayer (or a person that does not deal at arm’s length with the taxpayer) would extend the normal reassessment period for the relevant taxation year of the taxpayer by the period of time the notice of non-compliance is outstanding.

A penalty may apply on a person that has been issued a notice of non-compliance of $50 for each day that the notice is outstanding, to a maximum of $25,000. 

Questioning under oath

This budget proposes to allow the CRA to include a requirement or notice that any required information (oral or written) or documents be provided under oath or affirmation.

Compliance orders

This budget proposes to impose a penalty when the CRA obtains a compliance order against a taxpayer equal to 10% of the aggregate tax payable by the taxpayer in respect of the taxation year(s) to which the compliance order relates. This penalty would only apply if the tax owing in respect of one of the taxation years to which the compliance order relates exceeds $50,000.

This budget also proposes to allow the CRA to seek a compliance order when a person fails to comply with a requirement to provide foreign-based information or documents.

Stopping the reassessment limitation clock

In situations where a taxpayer seeks judicial review of a requirement or notice issued to them, the reassessment period is extended by the amount of time it takes to dispose of the judicial review (referred to as “stop the clock” rules). These rules currently do not apply to all situations where a taxpayer does not comply with a requirement or notice issued by the CRA.

This budget proposes to amend these rules so that they apply when a taxpayer seeks judicial review of any requirement or notice issued to the taxpayer by the CRA in relation to the audit and enforcement process or during any period that a notice of non-compliance is outstanding.

Other tax statutes administered by the CRA

This budget proposes to amend other tax statutes, such as the Excise Tax Act and Underused Housing Tax Act to be amended to address the above issues.

Effective date

These amendments come into force on royal assent of the enacting legislation.

The information in this publication is current as of April 16, 2024

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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