Laurence Brosseau, Jesse Good, Brett Howard and Joëlle Malo
Research and Education
Any substantive changes in this Library of Parliament Legislative Summary that have been made since the preceding issue are indicated in bold print.
Bill C-4, An Act respecting certain affordability measures for Canadians and another measure (short title: “Making Life More Affordable for Canadians Act”),1 was introduced in the House of Commons on 5 June 2025 by the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne. The bill received second reading and was referred to committee on 12 June 2025.
Bill C‑4 amends the Income Tax Act to reduce the marginal personal income tax rate on the lowest tax bracket from 15% to 14.5% for the 2025 taxation year and to 14% for subsequent taxation years.
As part of the Liberal Party of Canada’s 2025 election platform, the party proposed to “[c]ut income taxes for the middle class and save dual-income families up to $825 a year.” 2 The Office of the Parliamentary Budget Officer estimated that the federal financial cost of reducing the marginal personal income tax rate for the lowest tax bracket from 15% to 14% would be approximately $28.3 billion between 2025 and 2030.3 The federal government estimates that the maximum tax savings under the bill will be $420 per person, $840 per couple in 2026.4
Part 2 of Bill C-4 amends the Excise Tax Act, the Nova Scotia HST Regulations, 2010 and the New Harmonized Value-added Tax System Regulations, No. 2 to introduce a new rebate for first-time home buyers. The Prime Minister announced this rebate on 20 March 2025, with a view to “allowing more young people and families to enter the housing market and realize the dream of homeownership.” 5
On 11 June 2025, the Office of the Parliamentary Budget Officer issued its analysis of the measure, noting that the measure was expected to cost $1.9 billion over six years.6
Part 3 of Bill C-4 enacts amendments to the Greenhouse Gas Pollution Pricing Act (GGPPA) and the Fuel Charge Regulations.
As part of the Liberal Party of Canada’s 2025 election platform, the party proposed to “legislate the repeal of the consumer ‘carbon tax.’” 7 The amendments contained in Part 3 of Bill C-4 are meant to fulfill that commitment. Already, on 15 March 2025, before the election writ was dropped, the carbon pricing established in Schedule 2 of the GGPPA was reduced to zero8 by order in council, but the statute remained unchanged.
The carbon levy on fuels has been a key component of the Government of Canada’s approach to carbon pricing since 2019 and its overall approach to reducing Canada’s domestic greenhouse gas emissions since 2016.9 The Canadian Climate Institute has estimated that the carbon levy, implemented as designed as part of a suite of policies, would contribute about 19 to 22 million tonnes (Mt) of avoided carbon emissions in Canada in 2030, equivalent to between 8% and 9% of the total avoided emissions.10
The repeal of the carbon levy also ends the Canada Carbon Rebate, which was “introduced to return direct proceeds from the federal fuel charge to residents of provinces where it applied,” namely, the backstop (or listed) provinces.11 The Parliamentary Budget Officer estimated that due to the rebate, in fiscal terms, the “average household in each of the backstop provinces will see a net gain” by receiving more from the Canada Carbon Rebate than they pay in carbon levies, and explained that, “lower income households see larger net gains compared to higher income households.” 12 Targeted programs for returning fuel charge proceeds also served certain groups, including a 20% top-up for residents of small and rural communities, a Canada Carbon Rebate for Small Businesses and proceeds also returned directly to Indigenous governments through the Fuel Charge Proceeds Fund for Indigenous Governments. These rebate programs were eliminated beginning on 1 April 2025 by virtue of the order in council that zeroed out the carbon levy, as a result of which no further fuel charge proceeds are being collected or rebated.
The bill does not amend Part 2 of the GGPPA, which is the legal framework of the output-based pricing system for greenhouse gas emissions used with registered facilities, nor does it impact the Canadian Greenhouse Gas Offset Credit System Regulations 13 or the Output-Based Pricing System Regulations,14 which are authorized, in particular, under the GGPPA.
Part 4 of Bill C‑4 introduces amendments to the Canada Elections Act to replace the regime that applies to federal political parties with regard to protecting personal information. The new regime is intended to be national, uniform, exclusive and complete, and it excludes federal political parties from the application of provincial or territorial privacy laws. A portion of the new regime applies retroactively, as detailed later.
The bill’s proposed amendments to the Canada Elections Act appear to stem in part from a 2024 decision by the British Columbia Supreme Court whereby the Personal Information Protection Act,15 a provincial statute, applies to the collection, use and disclosure of personal information in British Columbia by federal political parties.16
Certain provisions of Part 4 are similar to measures that were included in Bill C-65, An Act to amend the Canada Elections Act, which died on the Order Paper with the prorogation of the 1st Session of the 44th Parliament.17
Bill C-4 contains 49 clauses; only the key clauses are discussed in the following section.
Clause 2 of Bill C‑4 replaces section 117(2) of the Income Tax Act,18 reducing the marginal personal income tax rate for the lowest tax bracket (which, for the 2025 taxation year, is the portion of taxable income that is $57,375 or less), from 15% to 14.5% for the 2025 taxation year and to 14% for the subsequent taxation years.
Part 2 of Bill C-4 amends the Excise Tax Act (ETA),19 the Nova Scotia HST Regulations, 2010 20 and the New Harmonized Value-added Tax System Regulations, No. 2 21 to introduce a new rebate for first-time home buyers.
The new rebate, among other changes, is set out in clauses 4(1), 5(1), 6(1) and 7(1) of Bill C-4, replacing sections 254(2.1) 254.1(2.1), 255(2.1) and 256(2.1) of the ETA respectively. The new rebate “appl[ies] to the same types of housing and appl[ies] similar eligibility criteria and conditions as the existing [new housing rebate], with certain modifications to ensure that [it] is targeted at first-time home buyers.” 22
As such, an individual may be entitled to the new rebate when:
Formulas are used to calculate the amount of the new rebate.23 As the Department of Finance Canada explained, as a result, the new rebate “eliminat[es] the Goods and Services Tax (GST) for first-time home buyers on new homes up to $1 million and reduc[es] the GST for first-time home buyers on new homes between $1 million and $1.5 million.” 24
Of note, in the case of homes with a value25 of less than $450,000, the new rebate comes in addition to any amount under the existing new housing rebate that can also be claimed. In those cases, both rebates must be claimed to receive the maximum amount. In the case of homes with a value over $450,000 or more but less than $1.5 million, the new rebate provides the maximum amount, as the existing new housing rebate does not apply to these homes. Homes with a value of $1.5 million or more are excluded from both the new rebate and the existing new housing rebate.
First, to be eligible to receive the new rebate, an individual must be a “first-time home buyer,” as defined in clause 3(1) of Bill C-4, which amends section 123(1) of the ETA.
This means that the individual must be a Canadian citizen or a permanent resident who is at least 18 years old and who has not previously, during the year or in the preceding four years, lived in a home that they – or their spouse or common-law partner, as the case may be – owned,26 whether that home was located inside or outside Canada.
The determination of first-time home buyer status is made at the time ownership or possession of the home, or ownership of the share, as the case may be, in relation to which the new rebate is claimed, is transferred to the individual. In the case of owner‑built homes, it is made when the home in relation to which the new rebate is claimed is first occupied by the individual as a place of residence, or when the construction or substantial renovation of that home is substantially completed, whichever comes earlier.27
Of note, in cases where more than one individual is purchasing the home or the share, or more than one owner-builder is involved, all the members of the group do not need to qualify as first-time home buyers. However, the individual who does must also meet the other criteria and fulfill the conditions provided under the relevant provisions. Pursuant to clause 9(2) of Bill C-4, which amends section 262(3) of the ETA, this same individual must also be the one who applies for the new rebate.
Second, the individual must be entitled to claim the existing new housing rebate or would be entitled to claim it if the value threshold for the home or share were the same as under the new rebate.28
Third, any applicable agreement must be entered into after 26 May 2025, but before 2031.29
Fourth, the construction or “substantial renovation” 30 of the home must begin before 2031 and be substantially completed before 2036, or, in the case of owner‑built homes, the construction or substantial renovation must begin after 26 May 2025 but before 2031, and be substantially completed before 2036.31
Fifth, ownership or possession of the home or ownership of the share must be transferred to the individual before 2036, or in the case of owner-built homes, the individual must first occupy the home as a place of residence before 2036.32
Sixth, the individual must acquire the home for use as their primary place of residence, or acquire the share for the purpose of using the related home as their primary place of residence. In the case of owner-built homes, the individual must be the one for whom the home is being constructed or substantially renovated for use as their primary place of residence.33
Lastly, the individual must be the first to occupy the home as a place of residence after the construction or substantial renovation of the home is substantially completed, after possession of the home is transferred to them, or, in the case of owner-built homes, after the start of the construction or substantial renovation of the home.34
Clause 7(1) of Bill C-4 adds section 256(2.11) to the ETA by amending former section 256(2.01) of the ETA and renumbering it section 256(2.11). This section imposes a two-year time limit for the purpose of claiming a rebate, to complete an “improvement” 35 once the home is occupied by the individual. After that, any tax paid in relation to the improvement is not included in the computation of the amount of the existing new housing rebate provided at section 256(2) of the ETA, and with the amendment made by this clause, the new rebate provided under new section 256(2.1) of the ETA.
Clause 7(2) of the bill amends section 256(2.2) of the ETA by extending its application to all mobile homes and floating homes that meet the conditions set out in this section – not just those that are purchased, imported or brought into of Nova Scotia – for the purpose of the existing new housing rebate provided under section 256(2) of the ETA, and with the amendment made by this clause, the new rebate provided under section 256(2.1) of the ETA. It also adds a reference to the new rebate provided under new sections 254(2.1) and 254.1(2.1) of the ETA.
Clauses 8(1) and 8(2) amend the descriptions of element C in sections 256.2(4) and 256.2(5) of the ETA, which respectively provide a rebate to builders for sales of buildings and leases of land and a rebate for cooperative housing corporations. As these rebates may overlap with the new rebate provided under sections 254.1 and 255 of the ETA, the formulas provide for deducting any amount that an individual is entitled to claim under the existing new housing rebate and, as a result of the amendment made by the bill, the new rebate.
Clause 9(2) amends section 262(3) of the ETA, which provides eligibility rules when a group of individuals purchases a home or share of a cooperative housing corporation, or in the case of owner-built homes, constructs or substantially renovates a home. As a result of the amendment, “an individual member of a group may apply for the [existing] new housing rebate … and, if applicable, a different individual member of the group may apply for the [new rebate].” 36 Clause 9(1) makes a correlated change to section 262(3)(a) of the ETA.
Clause 10(1) of the bill introduces sections 263.3 and 263.4 to the ETA. New section 263.3 of the ETA aims to prevent an individual from claiming the new rebate under more than one of the new provisions, including through their spouse or common-law partner, as the case may be.
New section 263.4 of the ETA includes interpretive rules and anti-avoidance rules that apply when an “agreement of sale” – a term also defined in this new section – is varied, altered, assigned or terminated after being entered into. As explained by the government, these rules
generally ensure that, where such an agreement is entered into before May 27, 2025 and, as a result, no rebate is available under new subsection 254(2.1), 254.1(2.1) or 255(2.1) [of the ETA] in respect of the residential complex, neither a variation, alteration or assignment of the agreement nor the entering into of a new agreement can be used to potentially allow the claiming of a rebate under those subsections.37
In addition to the changes mentioned earlier, clauses 4(1), 5(1), 6(1) and 7(1) of Bill C-4 repeal sections 254(2.01) and 254(2.02), 254.1(2.01) and 254.1(2.02), 255(2.01) and 255(2.02) as well as 256(2.02) of the ETA, respectively. These provisions provided the rules for the Nova Scotia first-time home buyers’ rebate, which are repealed by this bill. Correlatively, clause 11(1) repeals sections 15 to 18 of the Nova Scotia HST Regulations, 2010 which generally prevented the Nova Scotia first-time home buyers’ rebate from applying, since a rebate had been provided under provincial legislation since July 2010.38
Clauses 12(1) and 13(1) add new sections 42.1 and 44.1, respectively, to the New Harmonized Value-added Tax System Regulations, No. 2. These new sections provide amounts and rates for participating provinces (e.g., Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador) that are to be used in the computation of the new rebate provided under new section 254.1(2.1) of the ETA, which applies when the land is leased, and new section 255(2.1) of the ETA, which applies to cooperative housing, respectively. As the government explained, “[t]hese adaptations take into account the [provincial component of the harmonized sales] tax rate that applies in each of these participating provinces.” 39
Pursuant to clauses 3(2), 4(2), 5(2), 6(2), 7(3), 8(3), 9(3), 10(2), 11(2), 12(2) and 13(2) of Bill C-4, the changes brought by Part 2 of the bill are deemed to have come into force on 27 May 2025.
Bill C‑4 repeal key sections of Part 1 of the Greenhouse Gas Pollution Pricing Act (GGPPA)40 that govern the federal carbon levy on fuels and combustible waste, and the amendments in the bill take effect on either 1 April 2025 (retroactively), 1 October 2025 or 1 November 2025. The bill also repeals nearly all sections of the Fuel Charge Regulations (the Regulations)41 that set out the rules for the regime in Part 1. Then, in ten years, on 1 April 2035, the remaining sections of Part 1 of the GGPPA, along with its related schedules and the remainder of the Regulations, are set to be repealed. These provisions remain intact until then, because they are primarily administrative, procedural, definitional or interpretive.
The bill removes the Governor in Council’s authority to impose a carbon levy on fuels and combustible wastes and to make regulations for such purposes, while it enables the structured dismantling of the regime in a way that lets the federal government wind down its processes coherently, for example, by keeping active the authorities and payment systems needed to file payment and rebate adjustments, or to conduct enforcement and compliance activities.
The bill contains nine clauses (clauses 14 to 22) that amend Part 1 of the GGPPA and 16 (clauses 23 to 38) that amend the Regulations; four additional clauses (clauses 39 to 42) set out the dates on which the various provisions come into force. Only the key clauses that amend the GGPPA and the Regulations are discussed in the following section.
Clauses 14 through 17 of the bill, which amend the GGPPA retroactively to 1 April 2025, are of the most immediate and consequential effect. These clauses amend Division 2 of Part 1 of the GGPPA, which establishes the fuel charge levy on fuels and combustible wastes for people who use these products.
Clause 14 repeals sections 17 to 27 of the GGPPA rescinding the fuel charge for fuel producers, distributors or importers and consequently, for most fuel consumed in Canada, while clauses 15 and 16 repeal sections 34 and 35 respectively, for different categories of registered users (air, marine, rail and road) such that the legal apparatus for applying the levy no longer exists. Clause 17 repeals sections 36 and 37 on exemption certificates, and sections 38 and 39 on the special rules for charges on net fuel adjustments, since without a legal trigger, there is no need for exemptions or charges on net fuel adjustments.
Clause 18, which comes into force on 1 October 2025, amends Division 3 of Part 1 of the GGPPA, which provides the legal grounds for fuel charge rebates, allowing people who have paid a fuel charge to recover it when fuel is diverted to exempt uses or when a rebate is otherwise owed to them. This clause specifically repeals sections 43 to 48 of the GGPPA, which provide the framework for rebate payments. The bill leaves sections 49 to 54 of Division 3 intact until 1 April 2035, maintaining the administrative and procedural rules for handling overpayments.
Participants in the fuel charge system (e.g., producers, distributors, importers, registered users, facilities covered by Part 2 of the GGPPA and others) are required to register under the rules defined in Subdivision A of Division 4 in Part 1 of the same Act.
Clause 19, which comes into force on 1 November 2025, repeals sections 55 to 65 of Subdivision A; these sections provide the registration rules for all participants in the fuel charge system. Repealing them means that participants will no longer be required to register or to be registered. Sections 66 and 67 of the same subdivision remain intact until 1 April 2035 so the Minister may continue to require participants to provide financial security, as sometimes required, and to maintain certainty that registrations under Part 1 of the GGPPA are not statutory instruments.
The Regulations under the GGPPA set out the detailed rules, procedures and prescribed conditions needed to implement and administer the fuel charge system established by the Act.
The most critical amendments to the Regulations come into effect either on 1 April 2025 retroactively, 1 October 2025 or on 1 November 2025. Clauses 22 to 37 repeal the parts of the Regulations that govern rebates and the charges applied to certain participants or to specified activities. The remaining sections of the Regulations, which are mainly definitional, administrative or procedural, will be repealed in their entirety on 1 April 2035.
Part 4 of the bill introduces amendments to the Canada Elections Act (CEA)42 to replace the regime applicable to federal political parties for the protection of personal information.
Some privacy provisions currently applicable to political parties are repealed by the bill. Thus, clauses 44 and 45 repeal the following sections of the CEA, respectively:
Division 2 of Part 18 of the CEA sets out requirements for the registration and financial administration of political parties. Clause 43 of the bill adds section 384.9 to the CEA to preserve the definition of “personal information,” which is provided in section 385.2(1) of the CEA (repealed by the bill), and to apply it to the whole of Division 2 of Part 18. Under this definition, “personal information” means information about an identifiable individual.43
Clause 47 creates Subdivision C, “Personal Information Collected by Political Parties,” of Division 2 in Part 18 of the CEA, adding new sections 446.1 to 446.7 to the CEA. This new subdivision includes seven sections that lay the foundation for the privacy regime applicable to federal political parties. By reason of clause 49, sections 446.1 to 446.4 of new Subdivision C are deemed to have come into force on 31 May 2000, which is the original date on which the CEA was assented to.
New section 446.1 of the CEA applies the aforementioned definition of “personal information” to Subdivision C. This definition is deemed to have come into force on 31 May 2000. However, by reason of clause 48 of the bill, new section 446.1 will be repealed upon Royal Assent of Bill C-4. It will be replaced by new section 384.9 of the CEA, which will apply to the whole of Division 2. This means that section 446.1 will apply retroactively from 31 May 2000 to the date on which Bill C‑4 is assented to.
New section 446.2 of the CEA states that the CEA’s privacy provisions provide for a national, uniform, exclusive and complete regime applicable to registered or eligible parties when they carry out activities relating personal information (e.g., collection, use, disclosure, retention and disposal). This new section reproduces in part the wording in section 385.2(3) of the CEA, repealed by the bill. This provision is deemed to have come into force on 31 May 2000.
Under new section 446.3 of the CEA, eligible or registered parties and persons or entities acting on the parties’ behalf may carry out any activities in relation to personal information for the purpose of endorsing a candidate and supporting the election of their members. Such activities must comply with applicable federal laws and the party’s policy for the protection of personal information. This new section reproduces in part the wording of section 385.2(2) of the CEA, repealed by the bill. This provision is deemed to have come into force on 31 May 2000.
Under new section 446.4(1) of the CEA, registered or eligible parties and persons or entities acting on the parties’ behalf cannot be required to comply with provincial or territorial laws that regulate privacy activities when endorsing a candidate and supporting the election of their members. This exemption applies unless otherwise provided in the party’s policy for the protection of personal information. New section 446.4(2) states that parties and persons acting on the parties’ behalf cannot be required to provide access to personal information or provide information relating to personal information under its control, or to correct – or receive, adjudicate or annotate requests to correct – personal information or omissions in personal information under its control. This provision is deemed to have come into force on 31 May 2000.
New section 446.5(1) requires that a registered or eligible party and the persons or entities acting on the party’s behalf comply with the party’s policy for the protection of personal information. Under new section 446.5(2), a person or entity that fails to comply to the policy commits a violation referred to in section 508.1 of the CEA and is liable to an administrative monetary penalty.
New section 446.6 sets out the conditions for a registered or eligible party’s policy for the protection of personal information, which must:
New section 446.7 requires that the Chief Electoral Officer hold a meeting, at least once each year, on the protection of personal information by registered and eligible parties.
Section 407 of the CEA contains provisions to make it an annual requirement for eligible and registered parties to confirm certain information with the Chief Electoral Officer. Clause 46 creates new section 407(1)(c) of the CEA to require each party to provide a yearly statement confirming that it complies with its policy for the protection of personal information. The statement must be certified by the party’s privacy officer.
(586 KB, 29 pages), SOR/2025-107, in Canada Gazette, Part II, 15 March 2025. [ Return to text ] (3.04 MB, 86 pages), 2016; and Environment and Climate Change Canada, 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy (2.4 MB, 240 pages), 2022. [ Return to text ][T]he renovation or alteration of the whole or that part of a building, as described in whichever of paragraphs (a) to (e) of the definition residential complex is applicable to the residential complex, in which one or more residential units are located to such an extent that all or substantially all of the building or part, as the case may be, other than the foundation, external walls, interior supporting walls, floors, roof, staircases and, in the case of that part of a building described in paragraph (b) of that definition, the common areas and other appurtenances, that existed immediately before the renovation or alteration was begun has been removed or replaced if, after completion of the renovation or alteration, the building or part, as the case may be, is, or forms part of, a residential complex[ Return to text ]
© Library of Parliament