Be Aware - Federal Tax Reform
You have until October 2, 2017, to express your concern for the proposed Federal Tax Reform.
Announced July 18, 2017, the proposal was intended to target high-income individuals, but Canadians from all industry and business sectors are concerned that middle-income families will be significantly affected if the reform is put in to place.
According to http://www.fin.gc.ca/n17/17-066-eng.asp, Minister of Finance, Bill Morneau said, “Many of the richest Canadians are unfairly exploiting the tax rules designed to help businesses thrive. We are asking Canadians for input into how to close the loopholes and address tax planning strategies that give unfair tax advantages.”
The proposal outlines having incorporated businesses discontinue the use of income sprinkling, passive investments, and converting income to capital gains. To find out more about what this means and read the proposal, you can visit http://www.fin.gc.ca/drleg-apl/2017/ita-lir-0717-l-eng.asp.
On August 30, MP Shannon Stubbs was named Opposition Shadow Minister for Natural Resources. In her press release, Stubbs noted that the tax changes will harm small businesses and farmers the most.
“The Liberals are making a lot of changes which will directly impact the people I represent. Canada has so much to be proud of, from our world class oil and gas to our responsible forestry industry, to a strong agriculture and agri-food sector that is the envy of the world. It’s time for the Liberals to step up and finally praise Natural Resource workers from across the country, and to ensure long term opportunities. Conservatives are more united than ever before and ready to hold the Prime Minister accountable for his out of control spending and hurtful policies,” said Stubbs.
Community Futures Lakeland and Community Futures Lloydminster & Region
General Manager, Phyllis Maki said “A number of businesses I work with have invested heavily into other ventures in the community such as rental housing units, but under the reforms, they could be penalized for that type of investment.”
The Canadian Federation of Independent Business announced a ‘Coalition for Small Business Tax Fairness’ on August 31, with 42 business groups having signed the letter addressing the Minister of Finance. Included in this group are some of the country’s leading industry organizations which can be found at http://www.cfib-fcei.ca/english/article/9607-business-groups-unite-call-on-ottawa-to-drop-federal-tax-changes-for-small-business.html.
“There are still a lot of unknowns in all of this. I recommend that people get informed to see what kind of effect it would have on each business and family situation, and examine whether your structure still suits your needs. There are a lot of facets to any business, and your tax expense is just one of those things. If you have concerns, I suggest speaking to an advisor. The key is becoming informed and staying current,” said Lance Bick, MNP Taxation Services Partner.