Originally published by Canadian Underwriter
Bill C-44 is omnibus legislation that implements, among other things, some provisions of the federal budget 2017-18, tabled March 22.
In addition to its budget provisions, Bill C-44 changes several other laws, including the Bank Act and Income Tax Act.
For example, it repeals a part of federal Income Tax Act, which dates back to the 1950s, that stipulates that an insurer is exempt from paying income tax if the insurer covers “property used in farming or fishing or residences of farmers or fishermen.”
“The mutual insurance companies of farmers and fishers still exist for one reason: to provide affordable insurance protection to farmers and fishers on an at-cost basis, without a profit motive”
Bill C-44 passed third reading June 12 in the House of Commons and was then referred to the Senate, where it passed third reading with amendments. But the Senate passed June 21 a motion that it did “not insist” on its amendments, so the bill received Royal Assent June 22.
The Canadian Association of Mutual Insurance Companies was opposed to “the elimination of the total tax exemption” for insurers covering farming and fishing properties, CAMIC president Normand Lafrenière told the House of Commons finance committee May 15.
“The mutual insurance companies of farmers and fishers still exist for one reason: to provide affordable insurance protection to farmers and fishers on an at-cost basis, without a profit motive,” Lafrenière said at the time. “The large majority of active food producing family farms and fishing enterprises across Canada continue to be insured by their small mutual insurance company.”
With the passage of Bill C-44, the Canada Deposit Insurance Corporation Act and the Bank Act will be changed to require “domestic systemically important banks to develop, submit and maintain resolution plans.”
When it tabled the budget this past March, the ruling Liberals noted that none of Canada’s six systemically important banks could be “wound up under a conventional bankruptcy and liquidation process should they fail without imposing unacceptable costs on the economy.”
Legislative changes with Bill C-44 are intended to “provide the Superintendent of Financial Institutions greater flexibility in setting the requirement for domestic systemically important banks to maintain a minimum capacity to absorb losses.”
Source: MeatBusiness