Bill S-209 explained in plain English

This bill allows the Business Development Bank of Canada to manage income tax exemptions for municipal bonds used to finance infrastructure projects, and changes the name of the Business Development Bank of Canada Act.

Bill S-209 amends federal legislation to create a new process for providing income tax exemptions on municipal bonds. Under this bill, Canadian municipalities can apply to the Business Development Bank of Canada for approval to issue bonds that are exempt from income tax. These bonds would be used to finance infrastructure projects. Before applying for this exemption, municipalities must first receive approval from their provincial government. The bank will grant the exemption if it is satisfied that the bond proceeds will be used for an infrastructure project and any other regulatory requirements are met. The bank must publicly announce any exemptions it grants in the Canada Gazette. Interest paid on exempted bonds is not subject to federal income tax. The bill also changes the official name of the Business Development Bank of Canada Act to the "Municipal Modernization and Business Development Bank of Canada Act." Additionally, the bill updates federal access-to-information rules to reflect this name change by removing references to the old act name and adding a reference to the new name with section 37 identified as the relevant exemption provision.