The Family Trust: a Tax Planning Tool

March 1, 2003

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M’abonner

September 24, 2026

Chambers 2027: Lavery's expertise recognized

We are pleased to announce that Lavery has once again been recognized in the 2027 edition of Chambers in the following sectors: Energy and Natural Resources: Mining Law (Nationwide – Canada, Band 3) Insurance: Dispute Resolution (Nationwide – Canada, Band 5) Intellectual Property (Nationwide – Canada, Band 4) Corporate and Commercial Law (Québec, Band 3) Labour and Employment Law (Québec, Band 2) These recognitions are further demonstration of the expertise and quality of legal services that characterize Lavery's professionals. Nine lawyers have been recognized as leaders in their respective areas of practice in the 2027 edition of the Chambers Global guide. Areas of expertise in which they are recognized: Myriam Brixi – Dispute Resolution; Class Actions: Defence (Nationwide – Canada, Up and Coming) Brittany Carson – Labour and Employment (Québec, Up and Coming) Nicolas Gagnon – Construction (Nationwide – Canada, Band 2) Richard Gaudreault – Labour and Employment (Québec, Band 4) Édith Jacques – Commercial Law (Québec, Band 5) Marie-Hélène Jolicoeur – Labour and Employment (Québec, Band 4) Béatrice Ngatcha – Intellectual Property (Nationwide – Canada, Band 4) Martin Pichette – Insurance: Dispute Resolution (Nationwide – Canada, Band 3) Camille Rioux – Labour and Employment (Québec, Associates to Watch) About Chambers Since 1990, Chambers and Partners' ranks the best law firms and lawyers across 200 jurisdictions throughout the world. The lawyers and law firms profiled in Chambers are selected following through a rigorous process of research and interviews with a broad spectrum of lawyers and their clients. The final selection is based on clearly defined criteria such as the quality of client service, legal expertise, and commercial astuteness. About Lavery Lavery is the leading independent law firm in Québec. Its more than 200 professionals, based in Montréal, Québec City, Sherbrooke and Trois-Rivières, work every day to offer a full range of legal services to organizations doing business in Québec. Recognized by the most prestigious legal directories, Lavery professionals are at the heart of what is happening in the business world and are actively involved in their communities. The firm's expertise is frequently sought after by numerous national and international partners to provide support in cases under Québec jurisdiction.

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July 8, 2026

Generous Federal Investment Tax Credits for Clean Energy Projects

In 2021, the federal government introduced a series of refundable investment tax credits (the “ITCs”) to accelerate the transition to a low-carbon economy, stimulate economic growth, and support innovation. The Spring Economic Update 2026 confirms the growing importance of these measures. In particular, it announces that the Canada Revenue Agency (the “CRA”) will give increased priority to requests for advance rulings regarding eligible clean energy projects. In this regard, the CRA plans to increase its capacity to process these applications by more than 4.5 times by July 2026. In this context, two measures are of particular note: the Clean Technology ITC and the Clean Electricity ITC. 1. The Clean Technology ITC The Clean Technology ITC generally applies to certain capital investments in equipment and systems that contribute to the production of clean energy, the improvement of energy efficiency, and the reduction of greenhouse gas emissions, provided that such assets are acquired and used in Canada in accordance with the applicable criteria. This refundable credit can reach up to 30% of the capital cost of eligible property. It thus serves as a significant financial lever, helping to strengthen liquidity and improve project profitability, particularly during the early years. In practice, the analysis required to apply for this credit focuses primarily on the following elements: the entity’s eligibility (including its status as a taxable Canadian corporation); the property’s qualification (eligible category, function, and use); the timeline (dates of acquisition, installation, and commissioning); the impact of labour requirements, which may influence the applicable rate; interaction with other tax credits. The application period covers property acquired and that becomes available for use between March 28, 2023, and December 31, 2034. 2. The Clean Electricity ITC The Clean Electricity ITC is another measure that is gaining importance. It is of particular interest in structures where the investor (or certain investors) is tax-exempt or belongs to categories of entities for which several clean economy ITCs have historically been less accessible. Indeed, this credit is designed to be accessible to a broader range of entities, including notably (according to the proposed definitions) certain eligible trusts, designated provincial or territorial Crown corporations, corporations principally owned by municipalities, as well as entities affiliated with Aboriginal governments. At this stage, the government has published legislative proposals accompanied by explanatory notes, and the CRA has recently consolidated the relevant information on this subject on its website. Notably, it appears that: the credit would provide a base rate of 15% of the capital cost of eligible clean electricity-related property; eligibility would apply to property used primarily to generate, store, or transmit electricity, subject to technical and environmental criteria; the rate could be reduced in the event of non-compliance with certain labour requirements; the proposed application period would cover investments made from April 2024 and that becomes available for use on or before December 31, 2034. 3. Structuring: Corporation or Limited Partnership Beyond the technical eligibility of the property, the legal structure chosen for a project will have a decisive impact on the ability to claim ITCs and pass on their economic value to investors. In some cases, a taxable corporation is simpler to administer and more easily meets the eligibility criteria. Conversely, a limited partnership (“LP”), while useful for certain financing objectives, presents several disadvantages in the context of ITCs: 3.1 Constraints Related to Investors’ Tax Status Certain tax credits—particularly the Clean Technology ITC, often considered one of the most advantageous—are naturally better suited for taxable investors. When an LP has non-taxable members, converting the tax benefit into economic value may be less optimal, depending on how the credit is allocated and used. 3.2 Allocation of Credits and Limits for Limited Partners The rules governing credits within a partnership generally require that the allocation to each partner be reasonable, taking into account, in particular, their capital investment and contribution. Furthermore, for a limited partner, the share of the credit may be limited by “at-risk” rules, which cap certain tax benefits based on actual economic exposure. In practice, this can reduce the amount of credit available and limit allocation flexibility. 3.3 Increased Complexity of Monitoring and Compliance An LP generally entails heavier administrative obligations: calculating at-risk amounts, tracking allocations, documenting contributions and distributions, and ensuring consistency between the partnership agreement, financing agreements, and tax positions. This complexity can become a significant issue in the event of a tax audit. Conclusion Federal ITCs represent a major financial incentive for clean energy projects. However, their application depends on technical, tax, and structuring criteria that must be rigorously analysed and documented. Furthermore, the legislative framework governing these credits is constantly evolving (implementing regulations, administrative guidelines, and technical requirements), making a case-by-case analysis essential to confirm eligibility and optimize a project’s structure. We invite you to contact our tax team. We would be happy to assist you in successfully bringing your project to completion. Key Takeaways A Major Administrative Acceleration by July 2026 The CRA is making clean energy a priority: its capacity to process advance tax ruling requests will increase by more than 4.5 times by July 2026. For proponents, now is the time to act to secure early tax certainty. Two Powerful Financial Levers with Distinct Criteria Clean Technology: A major refundable credit of up to 30% of capital costs, primarily targeting taxable Canadian corporations. Clean Electricity: A refundable credit of up to 15% of capital costs structured to include entities that were historically restricted, such as Crown corporations, municipalities, and Indigenous organizations. Legal Structuring Can Make or Break Your ITCs Choosing the right legal vehicle is just as critical as technical asset eligibility. While popular for financing, LPs introduce significant complexity due to "at-risk" rules, the involvement of non-taxable partners, and a heavy compliance burden during tax audits.

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November 6, 2025

Federal Budget of November 4, 2025: Enhancements to the Critical Minerals Exploration Tax Credit and renewal of the Mineral Exploration Tax Credit

The federal budget presented on November 4, 2025 (the “Budget”), proposes a significant change to the Critical Mineral Exploration Tax Credit (CMETC). As a reminder, the CMETC is equal to 30% of “specified mineral exploration expenses”1 incurred in Canada that a company has renounced to flow-through share investors. Critical minerals currently eligible for the CMETC The critical minerals currently eligible for the CMETC are nickel, cobalt, graphite, copper, rare earth elements, vanadium, tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals, uranium and lithium (including lithium from brine deposits). Critical minerals added to the list The Budget proposes to expand the definition of “critical mineral” to include the following additional critical minerals: bismuth, cesium, chromium, fluorspar, germanium, indium, manganese, molybdenum, niobium, tantalum, tin and tungsten. Impact of this measure on mining exploration expenses The measure will make the 30% CMETC apply to exploration expenses relating to these new types of critical minerals that a mining exploration company would renounce to flow-through share investors. The measure will cover exploration expenses renounced under flow-through share agreements entered into after Budget Day and on or before March 31, 2027. The Budget also confirms the renewal of the Mineral Exploration Tax Credit until March 31, 2027 (METC). Please feel free to contact our professionals for more information Canadian exploration expenses incurred by a company after April 7, 2022, as part of mineral exploration activities conducted from or above the surface of the earth targeting mainly critical minerals.

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October 22, 2025

A judgment rendered by a civil court in Quebec may be valid for life

Executing a judgment in Quebec In Quebec, a bailiff can proceed with the forced execution1 of a judgment rendered by a civil court, such as the Court of Québec or the Superior Court,2 as soon as it becomes final,3 in accordance with article 656 of the Code of Civil Procedure (C.C.P.). Execution process The execution process begins when the creditor (the party having won the case) sends their instructions to a bailiff, who transcribes them into a notice of execution. The notice is then filed in the Court record and can be consulted free of charge at the court office or on SOQUIJ, for a fee. Prescription and renewal of debt A debtor who has been ordered by judgment to pay a sum of money should know that the debt can be recovered for 10 years, and that if the creditor executes the judgment in those 10 years but the debt goes unpaid, a new 10-year prescription period will start to run and the debt will remain owing. Article 2924 of the Civil Code of Québec (C.C.Q.) states that “[a] right resulting from a judgment is prescribed by [is extinguished after] 10 years if it is not exercised.” A creditor who has been unable to execute their judgment within the 10-year prescription period has the possibility of interrupting prescription by filing a notice of execution and making sure to serve it on the debtor, in accordance with article 2892 para. 2 C.C.Q. Clearly, a well-informed creditor will be able to indefinitely renew the prescription period to execute their judgment, until the debt has been paid in full. To constitute a valid interruption, the notice of execution must absolutely be filed with the court and be served on the debtor, but the subsequent seizure need not be conclusive. Jurisprudential confirmation Mohawk Council of Kanesatake v. Sylvestre This method of interrupting the extinctive prescription of rights resulting from a judgment has just been confirmed in Mohawk Council of Kanesatake v. Sylvestre, 2025 SCC 30: [62] ... The filing and service of the notice, itself part of the judicial application for seizure, interrupted prescription in 2016 pursuant to art. 2892 C.C.Q. Here is an excerpt of the Honourable Court’s summary: ... [F]iling and serving a notice of execution counts as a judicial application that interrupts the 10-year prescription period... It did not matter that the bailiff later found nothing to be taken and suspended the seizure. It also did not matter that the bailiff did not notify the debtor that the seizure had been suspended. ... [T]he 10-year period exists to ensure people act on time and to bring stability to debtor-creditor relations, but it should not punish creditors who take the right steps before the deadline. With this decision, the Court gave clarity and certainty to both creditors and debtors about how judgment debts can be enforced and what types of events can interrupt prescription. Additional points Prescription is interrupted when a notice of execution is filed with the Court and served on a debtor by bailiff. The notice of execution may include several seizure options, and the bailiff may attempt more than one, depending on the case. An unsuccessful seizure does not result in the “judicial application” being dismissed. If this is the case, the notice of execution remains valid and has the effect of interrupting prescription, such that a new 10-year period starts to run. There is no requirement for the bailiff to draw up minutes of a nulla bona if no property is seized. The bailiff can prepare minutes to certify that no property was seized, but there is no such requirement under the C.C.P., and the debtor suffers no prejudice if this is not done. The 10-year prescription period is not interrupted if the debtor opposes the execution and the Court allows such opposition. Conclusion This ruling by the Supreme Court of Canada confirms that the filling and service of a notice of execution maintains the validity of a judgment for a renewable period of 10 years. The term “execution” means that a party having succeeded in a judgment may choose one or more ways to compel the other party (the debtor) to pay what is owed to them by seizing immovable property, movable property, bank accounts, wages, and so on. Article 656 para. 2 C.C.P. states that “[e]xecution may be forced if the debtor refuses to comply voluntarily and the judgment has become final.” Article 566 C.C.P., which deals with the recovery of small claims, states that a “judgment creditor may themselves draw up the notice of execution if the only execution measure is seizure of the debtor’s income in the hands of a third person”, and section 13.1 of the Tax Administration Act states, among other things, that the Agence du revenu du Québec may prepare and file a notice of execution and then seize a sum of money or income in the hands of a third person, but that it must hire a bailiff in other cases. The term “final” in this article means that the case is over, that the judgment can no longer be appealed and that the creditor can force a debtor to comply with the judgment’s orders.

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June 25, 2025

Provincial Budget 2025: Significant Increase in Public Utility Tax (PUT) Rates

The PUT is a crucial component of provincial finances and has a significant impact on the operating costs of the many companies providing essential services. The PUT was introduced in Quebec in fiscal 2004–2005 to replace the municipal property tax on specific infrastructure used by companies in certain key sectors. Such infrastructure includes telecommunications network facilities, gas distribution systems, and energy production, transmission and distribution systems. The latest Quebec budget provides for gradual changes, including an increase in applicable rates over the next decade. The rate applicable to electricity production, for example, will rise from 0.7% in 2027 to 1.5% by 2035. However, this increase does not apply to transmission and distribution operations. The rate applicable to telecommunications will also rise from 0.7% to 1.5%. Lastly, the rate that applies to gas distribution will rise from 0.75% to 1.5% by 2035 on the first 750 million dollars in revenue. The portion of revenue exceeding that amount will be subject to a 1.5% rate as of 2027. As part of the changes introduced in the latest budget, the PUT exemption has been expanded to include certain municipal or public bodies performing government functions in Canada, as well as the corporations owned by such entities. A PUT exemption will also be granted on a pro rata basis to entities operating jointly with other non-eligible entities, based on the distribution of voting rights or income and loss shares. An anti-avoidance rule has been established to ensure that such distribution remains reasonable and in keeping with the spirit of the law. These adjustments apply as of calendar year 2025, with declaratory provisions covering the aforementioned exemptions. Through such provisions, companies having met the criteria set out for previous years should be able to claim back the PUT. To do so, they will have to submit their application by June 30, 2026, or the deadline by which they are required to file their tax returns. While it is true that this measure aims to ensure that the PUT reflects the changing infrastructure needs of public utility companies and to optimize their tax contribution, the impact it will have on stakeholders in the targeted sectors will be considerable, and they will have to adjust operations to cope with future increases. Read our first bulletin on the 2025 provincial budget titled “Provincial Budget 2025: New Refundable Tax Credit for Research, Innovation and Commercialization (CRIC)” Read our second bulletin on the 2025 provincial budget titled “Provincial Budget 2025: Major Changes to the Tax Credit for the Development of E-Business (TCEB)”

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