https://www.thestar.com/news/canada/2017/10/16/feds-to-cut-small-business-tax.html
Thus, the Trudeau government is in full damage control mode…
Reducing the small business rate as per election promise, which they flipped on, and now flopped on, before ‘fixing’ the so called small business ‘tax loopholes’, which they previously placed as a condition.
They altogether dropped the so called ‘converting income into capital gains’
They are doing damage control on the ‘income sprinkling’, without being specific
They still have not come out of the closet with what they will do about corporate investment income, but are backtracking there as well.
I think they simply want to be elected again in the next election, and are starting to realize that you can upset small groups of voters, but do not pick on big groups, such as small business…98% of Canadian businesses have under 100 employees… not sure how that translates to percentage of voters…
Did some more research…
In 2011, according to CBC, 5.137 million (48% of the workforce) Canadians worked in 1.16 million small businesses. Considering there are about 35 million voters, considering that each small business has at least 2 owners at average… that is between 6% and 15% of the total voter population….
Of course, last week they panicked another big segment of the voter population, with the furore about taxing employee discounts. Which, speaking as an accountant, would have been an accounting nightmare on the one hand, and completely unenforciable as a CRA auditor… Thus, a battle they could not possibly win and get any tax dollars out of…
I will keep my clients informed of any further developments on this important issue, as it yet can require revisions of estate and retirement plans which utilize corporations. If you have any questions on this, please do not hesitate to contact me.
