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Negative Impact of Proposed Canadian Tax Changes to Business

Posted on


August 24, 2017

Earlier this summer, the federal Department of Finance proposed sweeping changes to how private corporations are taxed in Canada.  CHBA has studied these complex proposals, secured advice from tax experts and talked with other industry associations that have small business members (for more details check CHBA’s Industry Issues brief on Tax Planning for Private Corporations).

CHBA has concluded that the tax changes the government is proposing will have significant negative impacts on Association members who operate private corporations, many of which are family-owned. These impact will include:

•    Additional restrictions on distributing earnings to family members, either as salary or dividends.
•    Much higher taxation of capital retained and passively invested within a private corporation.
•    A number of tax barriers that will make business ownership succession within a family more difficult and expensive, and complicate retirement funding for current owners.

Overall, rather than recognizing that you are a risk-taking entrepreneur, these tax changes will treat you as if you were an employee who never has to worry about making a payroll, keeping the bank happy or worrying about your accounts receivable.

CHBA is vigorously opposing the tax changes the government has proposed.  We are also working closely with other business groups to deliver a common message on the both the unfairness of these proposals, and the risks they pose to Canada’s economy.

Right now, if these tax changes sound problematic to you too, your involvement to help deliver this message to Ottawa can make a big difference.

One of the most effective lobbying efforts is when MPs hear from their constituents on how changes will have a negative effect on their business, as well as jobs and the economy in the riding.

The Liberal Party will be having their annual caucus retreat from September 5 to 7 in Kelowna. We need Liberal MPs from across the country to understand the negative impact these changes will have on the industry, affecting hundreds of thousands of small businesses (and voters), and to bring that message to the Cabinet and the Prime Minister during the retreat.

But this isn’t just focused on Liberal MPs. Members from the Conservative Party (which have their own retreat from September 6-8 in Winnipeg) and NDP should also be contacted on this issue, as it will be hotly debated once the House of Commons resumes sitting in late September.

You can let your important voice be heard by taking a few minutes this week to call your MP and let them know you are very concerned about the proposed tax changes.

To help you when talking with your MP, we’ve prepared some talking points on the tax change proposals that will affect private corporations.  Just click HERE to download these.

To find your MP and their contact details, follow this link and use your postal code in the search bar on the right hand side.

As always, if you have any questions, don’t hesitate to get in touch.  If you do contact your MP, it would be helpful if you let us know just by confirming to us you did so via e-mail.  We will keep you updated as work progresses.



Kevin Lee, P.ENG.,M.ARCH.
Canadian Home Builders’ Association
141 Laurier Ave. W. Suite 500, Ottawa, ON K1P 5J3
tel: 613-230-3060 ext. 222

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