What you need to know
Vaughan, ON, September 13, 2017 –
Finance Canada is proposing the most significant tax changes in 50 years. If your business is incorporated, then you could be facing a larger tax bill and more compliance costs from the government’s new proposals to change the way corporations are taxed.
The proposal overhauls taxation of private companies and affects income sprinkling, passive investment income and capital gains. All incorporated businesses, large or small, regardless of sector will be impacted.
“The Vaughan Chamber is proud of the hard work invested each day by its private sector members and family-run businesses who are concerned about the proposed taxation changes,” said Brian Shifman, President and CEO of the Vaughan Chamber of Commerce. “We think it’s imperative that government extend the consultation period for these proposed changes, and does everything it can to protect and empower private business.”
Here are three things you need to know about the tax changes proposed by the federal government:
1) Do you employ family members? The government wants to review their compensation to apply a much higher tax rate on income they consider “unreasonable”.
2) Do you invest the profits from your business? The federal government is proposing to tax income at an effective rate of 70%.
3) Do you want to pass your business on to your children? Stringent new rules make it difficult for younger kids to get the capital gains exemption. They could be double-taxed.
“Family owned and operated businesses struggle to pass on their enterprises to their offspring. The government needs to be focused on ways to help succession planning rather than setting up roadblocks like they’re currently proposing with the draft legislation,” said Marco Bellisario, President of Concord Steel Centre Ltd., and a Vaughan Chamber member. “In trying to achieve ‘fairness’, we’re actually harming the entrepreneurial spirit that drives the Canadian economy.”
Another proud Vaughan Chamber member had this to say: “Small business owners and their families expose their personal assets to build businesses and employ Canadians,” said Dario Battista, President & CEO of isure.ca insurance. “These proposed changes will likely force expanding businesses to rethink their strategy and consider hiring less or slow expansion investment.”
- Consult your accountant or tax specialist to see how you might be affected.
- Email us at the Vaughan Chamber to let us know your thoughts and how you may be impacted. You can reach us at firstname.lastname@example.org
- Write your MP to ask questions, and express your comments and/or concerns. MPs will be attending caucus meetings shortly so we recommend you not delay. (Don’t forget to copy us on your letter.)
- Vaughan MPs include:
- Francesco Sorbara, Vaughan-Woodbridge (LIB)
- Deb Schulte, King-Vaughan (LIB)
- Peter Kent, Thornhill (CONS)
- Vaughan MPs include:
“The federal government wants responses to this proposed legislation by October 2, which we believe is not enough time to identify its complex and sweeping changes to the tax system,” said Paul Woolford, Enterprise Tax Leader, Tax Partner, at KPMG Enterprise, which is a member of the Vaughan Chamber of Commerce. “Together with members of the business community, we’re asking for an extension to the consultation, and encourage those impacted to write to their local member of parliament.”
The Vaughan Chamber of Commerce is the premier membership and networking association in Vaughan. The VCC proudly represents business from all sectors of the economy including large corporations and small-to-medium enterprises (SMEs). The VCC is a strong voice on public policy issues of importance to the local business community such as infrastructure, transportation, taxation, and opportunities for business growth.
Communications and Public Policy Officer
Vaughan Chamber of Commerce
905 761 1366 ext 229