Which types of assets qualify for the proposed $250,000 bare‑trust exemption in Bill C‑15?
Executive summary
Bill C‑15 proposes a new bare‑trust filing exemption for trusts whose property has a fair market value (FMV) of $250,000 or less, but that exemption is constrained to trusts holding a narrow list of asset types—principally cash and low‑complexity financial instruments such as deposits, GICs, mutual funds, certain segregated funds, personal‑use property and securities traded on a designated exchange—plus a handful of other specified items like certain life insurance policies if included by amendment [1] [2] [3]. The practical result, if enacted, is to relieve many everyday family arrangements (for example an adult child on a parent’s bank account) from the expanded trust reporting regime while keeping higher‑risk or opaque holdings within scope [2] [1].
1. What the $250,000 exemption actually covers, by type
The draft legislation pairs the $250,000 FMV threshold with an asset‑type limitation: only trusts whose holdings consist solely of cash, guaranteed investment certificates (GICs), mutual funds, segregated funds (in some descriptions), personal‑use property and securities traded on a designated exchange qualify for the exemption [1] [2] [4]. Multiple industry summaries and advisories list broadly the same categories—deposits, GICs issued by Canadian banks, debt obligations issued by government or publicly listed entities, listed securities and personal‑use property—indicating the government’s aim to exempt low‑risk, transparent assets from the filing rules [3] [5].
2. Life insurance, valuation headaches and recent tweaks
Lobby groups and industry advocates successfully pushed to add certain exempt Canadian life insurance policies to the list of qualifying assets, with their FMV measured by cash surrender value, but reporting critics note draft amendments still lack a clear valuation rule tied to an existing $50,000 blanket exemption, creating uncertainty for advisers and trustees [1] [6]. Advisors and insurers flagged that the absence of an explicit valuation rule for life policies could produce inconsistent treatment unless Finance or CRA issues clarifying guidance [1] [6].
3. Why asset‑type limits matter: policy intent and practical effects
Keeping the list narrow appears intended to balance two policy goals: reduce compliance burdens for common familial or custodial arrangements while preserving the government’s ability to track complex or potentially opaque ownership structures [2] [7]. Industry groups representing securities dealers and custodians have recommended further technical calibrations—such as modifying the securities bare‑trust exemption language—on the grounds that policy objectives aren’t undermined by removing overly prescriptive lists of permissible investments [7]. That tension explains why some advisories emphasize the exemption’s conditionality as much as its dollar limit [3].
4. What the drafts do not promise: broader asset coverage and timing caveats
Although some summaries and media reports say the new $250,000 floor will shield many everyday trust scenarios, the exemption is not universal: it applies only where trustees and beneficiaries are related, the FMV never exceeds $250,000 during the year, and the holdings are restricted to the listed asset classes—so joint ownership of real property or ownership via nominee arrangements may still trigger reporting under different carve‑outs [2] [1] [4]. Additionally, the legislation’s effective dates and delayed enforcement have shifted, with Finance and CRA signalling phased implementation and potential application to taxation years ending after Dec. 30, 2026 in some analyses [8] [6].
5. Alternative views, lobbying influences and remaining uncertainties
Proponents argue the exemption removes needless paperwork for ordinary family arrangements; critics caution that the permitted asset list could be gamed or leave gray areas—especially for hybrid instruments, private debt, nominee holdings and certain insurance products—without tighter drafting or CRA guidance [3] [7]. The record shows active lobbying by estate‑planning and insurance groups to expand or clarify qualifying assets, underscoring the political and technical tug‑of‑war shaping the final list [1] [7].