Following the conclusion of the Finance Canada consultation for Tax Planning Using Private Corporations and the release of the Fall Economic Statement, I wanted to provide an update on our Government’s actions to support small businesses, while also ensuring tax fairness. I think it’s important that we continue to maintain a dialogue on this topic and I thank those who have called or written to me to share your perspective.
As Member of Parliament for Fundy Royal, I was very engaged in the consultation process. I met with, and heard from, many members of the New Brunswick business community, including yourself.
I listened to concerns throughout the consultation period and expressed what I heard directly to the Finance Minister on several occasions. I worked with department officials to seek clarification and, ultimately, I compiled a consultation package based on the feedback I received, which I shared with the Minister of Finance, his office and officials.
As a result of this feedback, and the feedback from thousands of Canadians across the country, our Government took action that clarified our proposals to ensure they did not result in unintended consequences.
Specifically, we will create a $50,000 threshold on investment income annually – equivalent to $1M in savings – to allow enough flexibility so that small businesses can continue to save for new equipment, parental leave, or retirement.
We will soon provide shorter, clearer guidelines around employing family members in a business, and will make it clear that capital and risk taken by family members be taken into consideration when distributing dividends.
Also, to ensure the smooth transfer of family businesses, including farms and fishing operations, we will not move forward with our proposals on capital gains.
In addition, one of the key items in the mandate letter of the Minister for Small Business and Tourism was to work with the Minister of Finance to establish a fairer tax system, while also taking steps to lower the small business tax rate.
Since the election, our government has clearly said that we understand that small businesses work hard and contribute so much to our communities in every corner of the country. We want to see small businesses grow and thrive. We also want to ensure that the small business tax rate supports these hardworking small business owners, as it was intended when it was introduced.
In this respect, I am very happy to share that the government announced its commitment to lower taxes on small businesses, from a rate that was 11% in 2015 to 9% by 2019.
These tax savings will ensure that small business owners in Fundy Royal will be able to save, invest and create more jobs in our local economy.
If you would like more in-depth information, there are a series of detailed backgrounders on each of these changes below:
Thank you, and know that I am committed to the communities in Fundy Royal, and I remain your voice in Ottawa.
Alaina Lockhart, MP
© 2018 Alaina Lockhart. All rights reserved.