This fall saw the end of the Finance Canada consultation process for Tax Planning Using Private Corporations and the release of the Fall Economic Statement. I wanted to take this time to follow up with you and provide an update on our Government’s actions to support small businesses, while ensuring tax fairness. I want to thank you for connecting with me over the course of the last several months and I think it is important that we maintain this dialogue.
As the Member of Parliament for Hamilton East-Stoney Creek and former Mayor of Hamilton I know how important small businesses are to our community. This is why I took all possible steps to ensure that our community was engaged in the consultation process.
I, along with my staff hosted a public consultation on the proposed tax changes on September 11th where we heard concerns regarding the original proposals. The concerns we heard during that meeting and through the many other emails, phone calls and conversations I had were taken directly to the Minister of Finance, his office and officials on many occasions. I was happy to note that in weeks following the consultation process, in caucus, Minister Morneau specifically mentioned the consultation I held in Stoney Creek and the concerns he heard from my office.
As a result from this consultation and the feedback received from thousands of Canadians across the country, our government took steps to clarify and narrow the scope of the proposed changes to ensure there were no unintended consequences.
We will be creating a $50,000 threshold on investment income annually – equivalent to $1M in savings – to still allow for enough flexibility so that small businesses can continue to save for new equipment, parental leave, or retirement.
Shortly we will be introducing shorter, clearer guidelines for employing family members and will ensure that capital and risk taken by family members be taken into consideration when distributing dividends.
To ensure the smooth transfer of family businesses, including farms, we will not be moving forward with our proposal on capital gains.
During the election we campaigned on a promise to lower the small business tax rate, I am happy to say that the government will be delivering on this key promise. This rate, which sits at 11% will be lowered to 9% by 2019.
These tax savings will ensure that small business owners in Hamilton and Stoney Creek will be able to save, invest and create more jobs in our local economy.
As mentioned, small businesses are the backbone of our economy and provide many opportunities to our community. In my capacity as a Member of Parliament, I want to stress to you that I recognize the important role you have and I am committed to fight for the best interests of our collective community.
I want to thank you again for engaging with myself and my office during these last several months. It was a privilege to tour factories and shops in our community to see firsthand the great work you do, and the global impact our business community has.
If you would like more in-depth information, there are a series of detailed backgrounders on each of these changes below:
- Support for Small Business and Fairness for the Middle Class
- Reducing the Small Business Tax Rate
- Income Sprinkling Using Private Corporations
- Support for Risk Taking and Entrepreneurship
- Passive Investment Income
- Support for Farming and Farm Families
- Venture Capital and Angel Investment
Thank you, and know that I am committed to Hamilton and Stoney Creek and I will continue to be your voice in Ottawa.