The implementation of IFRS 17 will result in the double taxation of insurers in the absence of legislative or administrative relief

An insurer's computation of income for tax purposes is in large part driven by the insurer's accounting income. Thus, it is problematic that IFRS 17 on "Insurance Contracts," which will be effective for fiscal years beginning after calendar 2020, forces an insurer to defer profits on the issuance of insurance policies and to recognize the profits as the insurer provides services under the insurance contracts. In contrast, existing accounting rules require an insurer to generally recognize the profit on the insurance contract's issuance at the policy's inception. As a result of the transitional adjustment to retained earnings under IFRS 17, profits previously recognized for tax purposes under current rules are included in profits again in years after the new IFRS 17 standard becomes effective.

To avoid double taxation of profits, the tax rules likely require amendment or some other form of administrative accommodation.

Neal Armstrong. Summary of Paul Vienneau, "New Profit Accounting for Insurers", Canadian Tax Highlights, Vol. 25, No. 10, October 2017, p. 10 under s. 138(1).