October 16, 2017
Today, Prime Minister Justin Trudeau, Finance Minister Bill Morneau, and Small Business and Tourism Minister Bardish Chagger announced that our government is fulfilling its commitment to lower taxes on small businesses, from 11 per cent in 2015 to 9 per cent by 2019.
To support this change, the Government will be moving forward on changes to the tax system that will ensure that Canadian-Controlled Private Corporation (CCPC) status is not used to reduce personal income tax obligations for high-income earners rather than supporting small businesses. This will include limiting the ability of largely high-income owners of CCPCs to lower their personal income taxes by spreading their income with family members who do not work in the business.
As Member of Parliament for Markham-Thornhill, Mary Ng heard and carefully considered the views and perspectives of small business owners and experts. In a series of one on one meeting in her constituency office, Ms. Ng heard from doctors, lawyers and small business owners from across the riding. Today it was announced that based on the consultations in the riding of Markham-Thornhill and across Canada, the Government will not be moving forward with proposals to limit the multiplication of the Lifetime Capital Gains Exemption.
In the coming days, the Government will announce further steps towards fairness for the middle class that will also take into account feedback received from Canadians during the consultation period. The modified proposals will ensure the measures are focused on a small number of wealthy individuals who get the biggest advantage from existing rules.
“Small businesses connect communities. They bring people together and help make our town, our cities, provinces and country thrive. Lowering the small business tax will ensure that small business owners in Markham-Thornhill have more money in their pockets at the end of the year so that they can save, invest in themselves, create more jobs and grow our economy.” Mary NgMember of Parliament for Markham-Thornhill
- Only an estimated 50,000 family-owned private businesses are sprinkling income. Only a portion of these families would be affected by the proposals to ensure tax fairness.
- CCPCs will benefit from a combined general corporate tax rate that is at least 12 percentage points lower than Canada’s largest trading partner, the United States.
- Small businesses in Canada will benefit from support that includes a reduced federal income tax rate of 9 per cent on their first $500,000 of active business income.
- The combined federal-provincial-territorial average tax rate for small business will be 12.9 per cent, by far the lowest in the G7 and fourth lowest among Organisation for Economic Co-operation and Development countries. Small businesses can retain more of their earnings to reinvest, supporting growth and job creation.
- Lowering the small business tax rate will save small business owners between $7,500 and $1,609 annually.
- In the course of the consultations, over 21,000 written submissions were received by the Department of Finance Canada.
Office of Mary Ng
Member of Parliament, Markham-Thornhill
613 996 3374
Department of Finance Canada
613 369 4000