Proposed Small Business Tax Changes 2017

This page is a consolidated set of information from NSTF and allies on this topic.

The federal government released a consultation paper July 18, 2017 proposing to change small business tax changes, available here: https://www.fin.gc.ca/activty/consult/tppc-pfsp-eng.asp

The main intent was to make the tax system fairer by stopping high income Canadians using small business corporations to shelter some of their income at the low small business tax rate - 13.5% (federal 10.5% & provincial 3%) instead of paying the personal income tax rate of 54% on taxable personal income above $200,000 (or 50% on taxable income between $150,000 and $200,000). The 3 federal proposals also include stopping small businesses paying family members an income when they don't actually work for the business.

The Canadian Federation of Independent Business very quickly mounted a campaign against the changes. They used misleading information such as a claim that all small businesses could be affected. In fact - only incorporated small businesses will be affected and in NS that means over half will not be affected. The Canadian Medical Assn and Doctors NS followed suit. These 2 groups have dominated the public debate.

In September 2017, the Canadian Coalition for Fair Taxation made of organizations representing over 4 million Canadians supported the proposals. Nova Scotians for Tax Fairness are a member of the Coalition.

Below are links to organizations and documents that favour the proposals:

Petition in support of the proposals: https://act.leadnow.ca/fair-share/

The Canadian Coalition for Tax Fairness: https://coalitionfortaxfairness.ca/

300 doctors support federal tax reforms - Toronto Star story. https://www.thestar.com/news/canada/2017/09/17/dissenting-doctors-write-...

Nova Scotians for Tax Fairness opinion piece in the Chronicle Herald Sept 29:
http://thechronicleherald.ca/opinion/1507398-opinion-federal-tax-reforms...

Nova Scotians for Tax Fairness submission to the Federal Finance Dept Oct 2, 2017: See below.

Canadians for Tax Fairness (CTF) is a national organization that promotes tax fairness and high-quality, publicly funded services. Nova Scotians for Tax Fairness is not directly affiliated with CTF but we share common goals and a common outlook. Many thanks to CTF for hosting this webpage.