When Prime Minister Justin Trudeau sits down with the premiers next week, it’s likely he will get more grief on a topic he’s heard a lot about lately — his government’s proposed changes to the small business tax regime.
Premiers have publicly expressed concerns with those changes recently, including leaders from Nova Scotia, Newfoundland and Labrador and British Columbia.
Nova Scotia Premier Stephen McNeil says the final agenda for the premier’s meeting with Trudeau has yet to be agreed upon, and said he expects the issue of the corporate tax reforms to come up.
McNeil told reporters in Halifax Wednesday that one of the real-world issues around not allowing private corporations to retain passive investments is how such a move would affect doctors who use that tax vehicle to save for retirement.
Concern for small business
“At the same time, we believe when it comes to investments being left in corporations, it’s imperative in our province that we allow that, so small businesses across this province continue to have their own capital inside of the corporation so they can reinvest,” he added.
N.L. Premier Dwight Ball told reporters during a federal cabinet retreat in St. John’s recently that the federal government needs to do a better job explaining the consequences of its tax proposals.
Some Liberal MPs have also publicly expressed a concern over the changes which would:
- Restrict the ability of business owners to reduce their tax rate by sprinkling their income to family members.
- Put limits on the use of private corporations to make passive investments that are unrelated to the company.
- Limit business owners’ ability to convert regular income of a corporation into capital gains, which are typically taxed at a lower rate.
The opposition Conservatives have…