CRA has published an expanded Notice, dated August 2026 (replacing the June 2026 version), discussing the Ontario enhanced new housing rebate (ENHR) which, together with the Ontario new housing rebate, provides eligible individuals with combined relief of up to $80,000 of the 8% provincial part of the HST paid on the purchase or construction of a new or substantially renovated home valued up to $1,850,000, where the home is for use as the individual's or their relation's primary place of residence. This rebate is generally available for the purchase of a home from a builder where the agreement of purchase and sale was entered into on or after April 1, 2026, and on or before March 31, 2027. For owner-built homes, the rebate is generally available where construction begins on or after April 1, 2026, and on or before March 31, 2027.

In addition to a description of the general conditions for granting the ENHR rebate, the notice discusses the anti-avoidance rules, which may deem an agreement entered into after March 2026 to have been entered into before April 2026.

The Notice explains that the rebate for up to $50,000 of the GST component of the purchase price is provided through the Ontario new home affordability payment (ONHAP) system. Both the Ontario ENHR and the ONHAP can be paid or credited to the purchaser by the builder (similar to other GST/HST new housing rebates). Although the builder then claims the ENHR rebate on its GST/HST return for the reporting period in which the amount was paid or credited, the ONHAP is not included on the builder's GST/HST return because it is paid separately by the Province of Ontario (which administers it rather than CRA)

The CRA webpage entitled “Ontario enhanced new housing rebate (ENHR)” has also been modified effective July 30, 2026.

Neal Armstrong. Summary of GST/HST Notice No. 346 Ontario Enhanced New Housing Rebate August 2026 under New Harmonized Value-Added Tax System Regulations, No. 2, under s. 41(2.01).

A(e) of the interest and financing expenses (IFE) definition in s. 18.2(1), in highly simplistic terms, may add to a taxpayer’s IFE an amount paid or payable by it in a year that would otherwise be deductible in computing its income, as a result of an arrangement entered into in relation to a financing of it, that may reasonably be considered to increase its cost of funding with respect to the financing. Conversely, B(a) of the IFE definition may reduce the IFE by an amount received or receivable that was included in the taxpayer's income for the year under an arrangement entered into in relation to a financing of the taxpayer, where the amount can reasonably be considered to reduce the cost of funding with respect to the financing.

In early June, the CRA significantly expanded an EIFEL webpage to discuss these rules, as well as the mirror image rules under A(e) and B(a) of the interest and financing revenues (IFR) definition.

CRA makes a determination as to whether the arrangements, in economic substance, result in a cost of financing or a reduction thereof to the taxpayer under the IFE rules and, conversely, regarding the IFR rules, whether they represent, in substance, a return on a financing provided by the taxpayer. In this regard, CRA provides some helpful examples.

For instance, in the case of Canco factoring its accounts receivable to a factoring company at a 10% discount to the receivables' face value without recourse, CRA indicates that the 10% discount would generally be included in Canco's IFE under A(e). However, from the factoring company's perspective, the transaction constitutes a purchase of trade receivables and does not represent a provision of capital by it to Canco in exchange for compensation for the time, risk, and deployment of capital involved, with an expectation of repayment at some future date. Accordingly, from the factoring company's perspective, the earned discount would not be included in its IFR.

The second example involves a Canco borrowing in U.S. dollars at a floating interest rate from a Canadian bank and hedging its risk with respect to the floating interest rate by entering into a derivative with an arm's length counterparty. CRA indicates that the hedging costs generally would be an addition to Canco’s IFE under A(e) or, if there was a receipt under the derivative, then this would reduce its IFE under B(a). However, the amounts received by the hedging counterparty would not be in respect of a return on a loan or other financing and would not constitute IFR to it.

Neal Armstrong. Summaries of Supplemental instructions and guidance for filing under the excessive interest and financing expenses limitation rules, CRA Webpage, 3 June 2026 including (in relation to the June 3, 2026 additions) s. 18.2(1) – IFE – A(a), A(e), B(a) and IFR – B(a).

The plaintiff (“SSCF”) was a Canadian registered charity that sought a pro rata refund under Art. XXI(1) of the Canada-U.S. Convention of U.S. taxes that had been imposed on U.S.-source portfolio dividends received by a Canadian unit trust (“Greystone Fund”) of which SSCF was a unitholder and whose terms required all its income to be distributed annually. SSCF argued that, as Greystone Fund was fiscally transparent for Canadian tax purpose, SSCF could by virtue of Art. IV(6) (which allowed it to look through fiscally-transparent Canadian entities) access its exemption on US-source dividend income pursuant to Art. XXI(1).

In rejecting SSCF’s position, Hertling J first noted that “Canadian unit trusts were not recognized by the signatories at the time the Fifth Protocol was negotiated and adopted as a fiscally transparent entity,” and then concluded:

Together, the Tax Treaty text and the relevant extrinsic evidence reflect a deliberate allocation of treaty benefits: the signatories expanded Article XXI(3) to allow charitable organizations to benefit from investing in pooled-investment vehicles, but only when the vehicle is restricted to tax-exempt organizations. Allowing charities to benefit from Article IV(6) and evade that restriction is inconsistent with Article XXI(3). At the same time, the signatories adopted Article IV(6) but expressly limited its application in Canada to Partnerships and bare trusts. SSCF cannot rely on Article IV(6) to avoid U.S. taxation of its U.S.-source dividend income. Rather, Article XXI(3) governs the treatment of SSCF’s U.S.-source income through the Greystone Fund. Because the Greystone Fund is not limited to tax-exempt organizations, its income does not qualify for the favorable tax treatment in Article XXI(1).

Neal Armstrong. Summary of The South Saskatchewan Community Foundation Inc. v. US (US Ct of Federal Claims, August 25, 2026) under Treaties – Income Tax Conventions – Art. 21.

CRA stated that, since whether a debt has become uncollectible is a factual determination respecting each debt, the “election provided for in subsection 50(1) must therefore be made separately for each debt.” S. 33(2) of the Interpretation Act (“the singular include[s] the plural”), was not discussed.

However, CRA indicated that the election must be made by attaching a signed letter to the return, and that “there appears to be nothing in the legislation to prevent several separate elections, for each of the debts in question, from being set out in a single letter.” Effectively, CRA seems to be saying that a single s. 50(1) election letter can be attached for a multitude of debts, provided that they are listed.

Neal Armstrong. Summary of 1 April 2026 Internal T.I. 2025-1050651I7 F under s. 50(1).