On July 18, 2017, the federal government unveiled proposed changes to address tax planning strategies involving the use of private corporations. The government is concerned that so-called wealthy Canadians are exploiting tax “loopholes” and the tax system must be made more fair. This is highly misleading. Business owners are following existing tax rules that are legislated, clear and in effect for decades.
The tax proposals have created a firestorm of protest. In my latest Letter from the President, I focus on the proposed tax treatment of passive investment income in private corporations and the potential ripple effects. I argue that the government should withdraw the proposals and conduct a comprehensive review of the tax system, including full consultation on what should be the right tax policy in this area.
As part of this review, the government should explore ways to promote equity investment in small private and public businesses. I make three recommendations in this regard.
You can read my Letter from the President by clicking here.