IMPORTANT WARNING TO CANADIAN TAXPAYERS:
The bare trust penalty provisions in Bill C-15 can apply even when you owe no tax at all. Ordinary family arrangements—like being on title for a child’s mortgage, holding a bank account for an aging parent, or opening an in-trust-for account for a child—may trigger harsh, uncapped penalties for simple filing mistakes. Please read this carefully, consider contacting your Member of Parliament, and share this information with other Canadians.

MP Letter Template

Letter to Your Member of Parliament

Re: Bare Trust Penalty Provisions in Bill C-15 (Budget 2025 Implementation Act, No. 1)

How to use this template

1. Find your MP: Visit ourcommons.ca/members — enter your postal code to get their name and email.
2. Personalize: Replace all text in [BRACKETS] with your personal information.
3. Send: Copy this letter into an email or print and mail it to your MP. Mail to the House of Commons address is postage-free.
4. Share: Share this template with others — the more voices, the more impact.

[DATE]

[MP’S FULL NAME], Member of Parliament
[RIDING NAME]
House of Commons
Ottawa, Ontario K1A 0A6

Dear [MP’S NAME],

I am writing as a constituent of [YOUR RIDING] to express serious concern about the bare trust reporting and penalty provisions included in Bill C-15, the Budget 2025 Implementation Act, No. 1. This bill passed the House of Commons on February 26, 2026, completed second reading in the Senate on March 10, 2026, and is currently before the Senate committee. Once enacted, these rules will apply to taxation years ending on or after December 31, 2026, with the first filing deadline of March 31, 2027.

The Problem

Under the proposed rules, Canadians who hold property, bank accounts, or investments on behalf of a family member—arrangements that Bill C-15 deems to be a trust for reporting purposes under proposed subsections 150(1.3) and 150(1.31)—would be required to file a T3 return with Schedule 15 every year, even when the taxpayer owes absolutely no tax. The bill broadens the definition beyond traditional “bare trusts” to capture any arrangement where legal ownership is held for the use or benefit of another person.

The Penalty Structure

The penalties for non-compliance are severe and grossly disproportionate to the nature of the filing obligation:

• Base late-filing penalty (subsection 162(7)): $25 per day that the return is late, with a minimum of $100 and a maximum of $2,500.
• Gross negligence penalty (subsection 163(5)): The greater of $2,500 or 5% of the highest fair market value of all property held by the trust at any time during the year. This penalty applies where the failure to file was made knowingly or under circumstances amounting to gross negligence. There is no dollar cap on this penalty.

To illustrate the disproportionate impact: a taxpayer who actually owes CRA $10,000 in income tax and files their personal return late faces a penalty of approximately $500 under subsection 162(1). Meanwhile, under the bare trust rules, a taxpayer who owes $0 in tax but fails to file the T3 form could face the following penalties:

• $200,000 property → up to $10,000 penalty
• $500,000 property → up to $25,000 penalty
• $1,000,000 property → up to $50,000 penalty
• $2,000,000 property → up to $100,000 penalty
• $5,000,000 property → up to $250,000 penalty

These penalties apply per year of non-compliance, and there is no cap on the dollar amount. A taxpayer with a high-value property could face hundreds of thousands of dollars in penalties for failing to file a form associated with zero tax owing.

My Specific Concerns

1. The penalties are grossly disproportionate. A percentage-of-value penalty with no dollar cap for a purely administrative filing obligation—where no tax is owing—is fundamentally unjust. It punishes Canadians not for evading tax, but for missing paperwork. The higher the value of the family arrangement, the more devastating the penalty—even though the value of the property has no relationship to any tax liability.
2. Millions of ordinary families are affected. The proposed rules capture everyday family situations: parents co-signing their child’s mortgage, adult children managing an elderly parent’s bank account, in-trust-for investment accounts opened for children, family members helping each other purchase property, and small businesses using nominee companies to hold real estate. These are not tax avoidance schemes.
3. The exemptions in Bill C-15 are insufficient. While the revised rules exempt certain arrangements (assets under $50,000, true joint ownership such as joint spousal bank accounts, and parents on title of a child’s principal residence for mortgage purposes), many common family arrangements remain fully subject to the penalties. In-trust-for investment accounts for children exceeding $50,000, family members on title of rental or investment properties, corporate nominee arrangements, and property held for relatives that does not qualify as a principal residence are all caught—regardless of how ordinary and non-tax-motivated these arrangements are.
4. CRA itself cannot tell Canadians whether they are affected. CRA’s own website states that whether a bare trust exists is “a question of fact and law” and directs taxpayers to seek independent legal advice. It is unreasonable to impose severe penalties for non-compliance with a rule that the administering agency cannot help Canadians identify or understand. Clear, binding, simple guidance must be published before any penalties are enforced.
5. The rule has already failed three times. CRA attempted to implement bare trust reporting in 2023 but cancelled it days before the deadline—after 44,000 Canadians had already incurred professional fees to comply. No refunds were issued. The requirement was then delayed for 2024 and 2025. Despite repeated objections from CPA Canada, the Canadian Bar Association, and tax professionals across the country, the government embedded the revised rules in a 600-page omnibus budget bill without standalone debate or vote on the bare trust provisions.
6. The broadened definition may capture arrangements never intended to be “trusts.” Proposed subsection 150(1.3) no longer refers specifically to bare trusts. Instead, it deems a trust to exist wherever legal ownership is held for the “use of, or benefit of” another person. Legal commentators have noted this language could capture arrangements that are not generally understood to be bare trusts, including situations where a benefitting party simply uses property without controlling it in any meaningful way.

What I Am Asking

I respectfully ask that you advocate for the following amendments during the Senate review of Bill C-15:

• Eliminate or substantially reduce the percentage-of-value penalty. Replace it with a fixed-dollar penalty proportionate to the administrative nature of the filing—not one that scales with property value while zero tax is owing.
• Alternatively, scrap the bare trust reporting rules entirely. If CRA cannot provide clear guidance on what constitutes a bare trust, and the exemptions continue to leave millions of ordinary family arrangements exposed, the entire framework should be reconsidered.
• If the rules proceed, expand the exemptions to cover all common family arrangements—including in-trust-for investment accounts for children regardless of value, and family members on title of properties where the arrangement is clearly non-commercial.
• Implement a grace period of at least two full tax years with an education-first approach and no penalties, to allow Canadians and their advisors time to identify affected arrangements and comply.
• Require CRA to publish clear, simple, binding guidance—not just FAQs—so that any Canadian can determine whether they are affected without needing to hire a lawyer or accountant.

[OPTIONAL: Add 1–2 sentences about how this affects you personally. For example: “I opened an in-trust-for investment account for my daughter 15 years ago. It has grown to $200,000. Under these rules, I could face $10,000 in annual penalties—even though I owe CRA nothing.”]

A tax rule designed to catch criminals and money launderers should not punish Canadian families for helping each other. I urge you to ensure these provisions are amended—or removed—before Bill C-15 receives Royal Assent.

Thank you for your time and consideration.

Sincerely,

[YOUR FULL NAME]
[YOUR ADDRESS]
[YOUR EMAIL]
[YOUR PHONE NUMBER — optional]

Find your MP: ourcommons.ca/members — Enter your postal code. Mail to House of Commons is postage-free.

Return links for more information and resources:
• trust.tedlee.ca – Main trust education and resources hub.
• trust.tedlee.ca/bare.html – Detailed information on bare trusts and reporting risks for Canadians.
• trust.tedlee.ca/brules.html – New rules for Bare Trust.