Tag: Federal Tax

Tax Wins for Small Business!

Minister of Finance Bill Morneau announced a series of revisions to the federal government’s proposed corporate tax changes as well as a reduction to the small business tax rate. This announcement is a significant win for the business community and is a result of the hard work of business owners and chambers from across the country. The fight for tax fairness and our #protectgrowth campaign is not over yet, but keep reading to see what has been accomplished so far.

Small business tax rate reduction:
The small business tax rate will be reduced from 10.5% to 9% by 2019. This was originally part of the Liberal campaign platform, but was postponed indefinitely in Budget 2016. We are pleased to see this planned reduction restored.

Lifetime Capital Gains Exemption (LCGE):
The government had planned to limit access to the LCGE as one of their three major changes to corporate taxation. This would have hurt family businesses by punishing intergenerational transfers. The government has cancelled this proposal and now says there will be no changes to the LCGE. The government has also indicated that it will ensure that the proposed tax reforms do not impede the intergenerational transfer of businesses. They have not yet provided any detail on this yet, but we will be monitoring the issue closely.

Income Splitting:
The government proposed onerous restrictions on how much family members could be paid. They said anything beyond a “reasonable” salary would be taxed at a much higher rate. The government has softened its approach, indicating that the tax reforms will only impact family members that make no “meaningful contribution” to a business. The government has also said it will simplify restrictions on income splitting. By excluding family members that make “meaningful contributions” to a business from this proposal, the government has taken a step in the right direction, but it is still not clear what exactly a “meaningful contribution” is. We are concerned that government still does not recognize the diverse contributions that family members make to a business.

Investment Income:
The government is still moving forward on rules to discourage passive investment income, but they are setting a threshold that will allow $50,000 in income per year to be exempted. That means that $1 million held inside a corporation could earn 5% ($50,000) without being subjected to the new rules. We are still calling for government to completely cancel its proposed restrictions on passive investment income, but this ‘threshold’ is an improvement from the original proposal.

What’s Next?
Although the federal government has taken some steps toward tax fairness through its reduction of the small business tax rate and revising its corporate tax proposals, there is more work to be done. The details of the government’s new proposals are still to be seen and the government has not yet conducted fulsome consultations or a comprehensive review of the tax code. That’s why we are calling for a Royal Commission to conduct a full and independent review of the tax system.

We urge you to continue to make your voice heard and contact your MP. Tell them that these revisions are a step in the right direction, but that Canada needs a Royal Commission. Make sure they hear your concerns so that Burlington can remain a fair place to do business. You can reach MP John Oliver here and MP Pam Damoff here.


Rethink Tax Changes | #ProtectGrowth

Rethink Tax Changes #ProtectGrowthThe government’s proposed tax changes will affect all private business owners

The government has proposed the most significant tax changes we’ve seen in 45 years. These tax changes will affect all private business owners, regardless of their level of income, size of business or conformity with fiscal rules.

Our asks

  • We want the government to rethink its proposed tax changes to protect the growth of small businesses across Canada.
  • We want the government to launch meaningful consultations with the business community to review tax policy without unfairly targeting independent businesses.
  • We want the government to consider a comprehensive review of the Canadian tax system with a view towards fairness and simplification for all taxpayers and increasing the competitiveness of all businesses.

Our submission

The Canadian Chamber of Commerce has submitted their policy submission to Finance Canada on the proposed tax changes. It outlines the problems and offers solutions.
Read the submission. 


Have your say

While the government’s consultation period ended on October 2, you still need to voice your concerns.  Call on your MP to ensure no harm is done to small businesses across Canada. 

Click here to write your MP today. When prompted for a password, please enter chamber2017.

Click here to sign our petition. The petition will be sent to ministers Morneau, Chagger, Bains and Monsef.

Please consider adding your voice by shooting a video and sharing it via protectgrowth@chamber.ca. Videos should tell the story of how proposed changes will impact their business. Watch a sample.  

Learn more.

 


Federal Tax Changes Could Impact Your Business: What You Need to Know

  • Do you employ family members? The government wants to scrutinize their compensation to apply a much higher tax rate on income they consider “unreasonable”.
  • Do you invest the profits from your business? The federal government is proposing to tax that income at an effective rate of 70%.
  • Do you want to pass your business on to your children? Tough new rules make it difficult for younger kids to get the capital gains exemption. They could be double taxed.

​Finance Canada is proposing the most radical tax overhaul in 50 years.  These proposed changes will have an impact on all incorporated businesses in all sectors of the economy from retailers to restaurateurs to farmers and consultants.  We are concerned that these changes will stall business growth in Canada and punish legitimate businesses.

We are asking for your help. Send an email to your Member of Parliament using these steps:

  1. Highlight and copy the sample letter below.
  2. Send a letter to MP Pam Damoff or Send a letter to John Oliver 
  3. Copy Faye Lyons, Vice President of Government Relations and Advocacy faye@oakvillechamber.com 
  4. Paste the letter below into the body of the email.
  5. Be sure to personalize the letter (everything in italics).
  6. Click “Send”

We urge the government to put these changes on hold to avoid hurting thousands of small businesses across the country and to have a broader, more thoughtful discussion regarding the measures needed to stop those who use their businesses to avoid paying taxes.

Sample Letter to MP

Subject Line: Tax Changes will Hurt Small Businesses

Dear MP Name

Over the summer, the federal Finance Department has made it clear that it intends to make the most sweeping changes to business taxes in 50 years.

From my perspective, as a business owner, I want you to know how this is going to affect my business.

(Please share your business story.)

So that you have a snapshot of my business, here’s some information:

The number of people I employ:

The type of business:

I started this business in…

My customer base is… e.g. mostly local

My supplier base is… e.g. mostly local/Canadian/etc.

Nobody supports tax evasion or loopholes. But these changes will punish legitimate businesses like mine.

I am particularly upset because this government has said it is committed to providing new opportunities for SMEs to grow. My business and many others like mine are the backbone of many communities – my community included. Our businesses employ citizens; our businesses support local initiatives – everything from soccer teams to fundraising drives for refugee families. If these changes go through, our local businesses, including mine, will no longer have the capacity for these community activities. I understand that draft legislation is in place concerning these changes.

I urge the government to put these changes on hold to avoid hurting thousands of small businesses across the country and to have a broader, thoughtful discussion regarding the measures needed to stop those who use their businesses to avoid paying taxes.

Yours truly,

Name