< Browse more articles

After a careful review, the Coalition for Small Business Tax Fairness is asking finance minister Bill Morneau to take more action on the government’s proposed tax changes which continue to unfairly target small business.

A Coalition of 73 organizations, including HRAI, representing hundreds of thousands of business owners nationwide noted that while budget measures addressed some of the concerns related to the complexity of earlier proposals on passive investments, the approach outlined in the 2018 budget will create an entirely new group of businesses that will face tax burdens.

Two major reports – the Parliamentary Budget Officer’s report on income sprinkling and the Senate report on tax changes – clearly show the new rules remain both costly and deeply confusing.

In a recent letter to Minister Morneau, the Coalition is asking government to:

•             Immediately conduct an economic impact assessment of the proposed package and delay implementing any tax changes until the assessment is complete.

•             On passive investment

o             Do not proceed with the proposed passive investment rules OR

o             If determined to proceed, ensure past passive investments are excluded when determining eligibility for the small business deduction going forward.

o             Index the proposed $50,000 and $150,000 passive income exemption limits to inflation.

•             On income splitting:

o             Postpone the changes until January 1, 2019 at the earliest.

o             Consider, at minimum, a full exemption for spousal income and dividends from the new income splitting rules.

HRAI members can read the Coalition’s letter to Minister Morneau here.

The Coalition for Small Business Tax Fairness is the voice of more than 70 organizations representing hundreds of thousands of business owners across the country.