Canada’s January 2026 Draft Amendments to the Global Minimum Tax Act: the Elective Private Investment Entity De-Consolidation Regime

On January 29, 2026, Canada’s Department of Finance released draft legislative proposals for consultation (with comments requested by February 27, 2026) that include technical amendments to the Global Minimum Tax Act (GMTA).

For GMTA purposes, the policy focus is a de-consolidation rule intended to allow a private Canadian corporation that controls a publicly listed Canadian corporate group to calculate top up tax for the private controlling entity (and other private entities it controls) separately from the controlled public group. This was originally released in draft in summer 2025 and has been modified to address tax avoidance and stakeholder concerns. It is proposed to apply to fiscal years of a qualifying MNE group beginning on or after December 31, 2023.

In summary, the January 2026 GMTA draft law implements three legislative changes for in-scope structures involving a private Canadian controller and a Canadian listed subsidiary:

1. Defines private investment entity (PIE) in the GMTA, including a new prescribed-form filing requirement by the GIR due date (effectively making the regime elective/opt-in).

2. Adds a PIE de-consolidation rule to GMTA section 9 so that (for most GMTA purposes) the private controller is deemed not to have a controlling interest in certain Canadian publicly listed corporations – splitting the actual group into separate private and public groups.

3. Introduces targeted carve outs and a broader anti avoidance threshold (transaction or event; “one of the main purposes”).

Accounting consolidation vs GMTA consolidation

The OECD Model Rules (and the GMTA) uses consolidation concepts tied to consolidated financial statements and controlling interest. In particular this includes situations where an interest holder would have been required to consolidate on a line by line basis if it had prepared consolidated financial statements.

At the same time, Canadian private enterprises using ASPE Section 1591 (Subsidiaries) have an accounting policy choice to consolidate subsidiaries or to prepare non consolidated financial statements (and account for subsidiaries using cost or equity methods).

This could therefore be an issue where a private entity owns a controlling interest in a Canadian publicly listed corporation, and because of GMTA’s deemed consolidated financial statements concept, it would be treated as consolidating the public group for GMTA purposes even though it does not prepare actual consolidated financial statements under ASPE.

In particular:

• the actual group could face significant compliance implications, and

• entities located in the same jurisdiction would be required to blend income and taxes when determining jurisdictional ETR and top-up tax, and jurisdictional elections could apply across both public and private subgroups.

Therefore the proposed amendments are to address this.

Technical Analysis of the January 2026 Draft Law