Federal Tax Proposals – Are They Really Fair?

Core Partners Chartered Professional Accountants are forwarding information to all of our corporate clients regarding the July 18, 2017 proposals put forth by Federal Finance Minister Bill Morneau.

These proposals, if implemented, will have a detrimental effect on almost all private corporations in Canada.  This includes small local retail stores, professionals, family farm operations, the service industry, oil and gas and forestry.  If you are operating as a corporation these proposals will affect you.

The proposals include changes to income splitting provisions which have been in place since 1972, the ability to retain passive assets in a private corporation and the ability to claim capital gains on the sale of shares of a small business.  The proposals, as they stand, would severely restrict the ability of a small business owner to pass their business on to the next generation of the family.  Even the ability to save for a future capital purchase would be made more difficult under these new rules.

Mr. Trudeau and Mr. Morneau are both very quick to say that these proposals will only affect the “wealthy” and it is an effort to help the middle class.  Don’t believe it!  We suspect that most of you believe, as we do, that we are the middle class but there seems to be a perception that if one owns a corporation it is the equivalent of being wealthy.