Canadian Legislative News

Vehicle Recall Legislation Becomes Law

In early-March, Governor General Julie Payette signed into law bill S-2, commonly referred to as "vehicle recall legislation." The previous Conservative administration under Stephen Harper (2006-2015) introduced a similar law several years ago, which did not fully pass through Parliament.

The bill grants the federal transport minister direct power over ordering vehicle recalls in Canada, a policy that has existed in the United States for many years. Although recalls are becoming more common, it is expected that the majority of them will continue to be ordered by the manufacturer and not the government, even under this bill. However, the existence of this new federal power might coerce OEMs to issue more recalls than they otherwise may have.

Small Business Tax Changes Integrated Into Budget Proposal

The Canadian government’s latest budget has clarified its approach to 2017's contentious small business tax changes, specifically with regard to its treatment of passive income earned inside a corporation, usually in the form of returns earned on retained earnings.

New tax rules on passive income will occur only at the $50,000 level (which is equivalent to a five percent yield on $1 million in savings).

According to the government’s own calculations, roughly 97 percent of firms will not be impacted by this move, which is intended only to increase the tax burden of the very richest incorporated entities in the country. The measure is expected to pass before the end of the year.