On March 22, 2017, the current Liberal government tabled their second Federal Budget titled “Building a Strong Middle Class.” The Budget focused on job creation and economic growth.
From a tax perspective, there were no major changes to the current tax system or any changes to the corporate or personal tax rates. The Federal Budget did not contain any of the significant tax changes about which there was much advance speculation. There were no changes to the capital gains inclusion rate, which remains at 50%; nor were there any changes to the small business tax rate for Canadian Controlled Private Corporations, or any changes that targeted tax planning using private corporations – at least for now.
The Federal Budget did announce that the government will be reviewing tax planning strategies that use private corporations, which may result in unfair tax advantages. The government intends on releasing a document in the coming months that outlines their concerns and potential changes to the tax rules to address these concerns. We will be sure to keep you posted.
The Federal Budget also announced a $523.9 Million investment over the next five years to improve tax compliance and reduce tax evasion. Some of this money will be used to hire additional auditors and specialists to increase CRA audit activity.
While this Budget did not contain any of the major tax changes many thought it would, it did leave open the possibility that some of the changes could be coming soon. For information on some relevant topics of interest, please visit the following links:
- Tax Planning Using Private Corporations
- GST/HST Changes
- Personal Tax Credit Changes
- Medical Tax Credit Changes
- Professionals and Work in Progress
- International Tax Measures
Contact us today to discuss how you and your business may be affected by changes proposed in the 2017 Federal Budget.