Member of Parliament
October 24, 2017
As Member of Parliament for Richmond Hill, I want to thank all of the constituents who took the time to consult with me on the proposed tax changes. I heard from over 280 constituents, that included more than 50 medical professionals, 40 small business owners and over 20 accountants. In addition, I hosted a Tax Fairness Town Hall held on September 24, 2017 and presented a report to the Department of Finance that summarized all the responses I received. I know that lowering the small business tax will ensure that small business owners in Richmond Hill have more money in their pockets at the end of the year so that they can save, invest in themselves, create more jobs and grow our economy.
On October 16th 2017, Prime Minister Justin Trudeau, Finance Minister Bill Morneau, and Small Business and Tourism Minister Bardish Chagger announced that our government is fulfilling its commitment to lower taxes on small businesses, from 11 per cent in 2015 to 9 per cent by 2019.
This past week, our Government announced the next steps in the tax fairness plan:
- We are fulfilling our commitment to lower taxes on small businesses, from 11 per cent in 2015 to 9 per cent by 2019.
- We are moving forward with a simplified proposal to limit the ability of a small number of high-income owners of private corporations to lower their personal income taxes by sprinkling their income among family members. During the consultations, we heard concerns that our original proposal was too complex, and created uncertainty for family members. Our next step will be a simplified proposal that addresses income sprinkling. We also heard concerns from family-run businesses – especially farm and fishing operations – about our proposals to limit access to the Lifetime Capital Gains Exemption. Based on this feedback we will not move forward with the measures that would limit access to the Lifetime Capital Gains Exemption.
- We are moving forward with measures to limit the tax deferral opportunities related to passive investments. We estimate there is between $200 and $300 billion in assets sitting in passive investment accounts held by only 2% of private corporations, growing by $16 billion every year. As we move forward, we will create a $50,000 threshold on investment income annually, or equivalent to $1M in savings, to ensure business can continue to have the flexibility to hold savings that can have both a business and personal component. Under our plan going forward, 97% of businesses will see no tax increase on investment income. Changes will protect past investments and income earned from those investments. We will also ensure that incentives are maintained so that Canada’s venture capital and angel investors can continue to invest in the next generation of Canadian innovation.
- We recognize the importance of maintaining family farms. Based on feedback we have heard, we will NOT be moving forward on any measures that could affect the transfer of a family business to the next generation.
- The government is scrapping proposed rules meant to curtail the conversion of income to capital gains, which caused concern in relation to inter-generational transfers and insurance policies held inside corporations.
- Minister Morneau promised incentives will be maintained for venture capitalists and angel investors. Consultations will be held on how this can be achieved
In the course of the consultations, over 21,000 written submissions were received by the Department of Finance Canada. Again I would like to note that all those who reached out to my office and raised their comments, concerns and recommendations have their voices in the total submissions received.
As your Member of Parliament for Richmond Hill I am proud to be working for you and representing your concerns in Ottawa.
Majid Jowhari, MP