Ottawa responds to critics of tax reforms

When the federal government announced proposed legislation to remove certain tax benefits for private incorporated businesses, there was an immediate outcry among those who would be affected. In British Columbia where REALTORS® have the right to incorporate, the proposed changes would have a significant impact.

During the federal government’s 75-day consultation period many groups across the country weighed in with submissions that were largely critical of the draft tax legislation.

The loud cross-country backlash seems to have resonated in Ottawa.  On Tuesday, October 3, Finance Minister Bill Morneau announced that his government had listened to Canadians, and would revise the draft legislation in the coming weeks, based on these principles:

  • Support small businesses
  • Keep small business taxes low while supporting owners who invest and create jobs
  • Avoid creating unnecessary red tape for small businesses
  • Recognize the importance of family farms, and ensure tax changes do not affect the transfer of family businesses to the next generation
  • Ensure any changes to the tax system promote gender equity

During the consultation, CREA made a submission to the federal government expressing concern — not with the objective of making fair tax policy, but with how the issues were communicated and the means by which the government would achieve its objectives.

Linked here is a copy of CREA’s submission on the Taxation of Private Corporations.