Minister Morneau Talks Tax Fairness With Business Leaders in St. John's
September 13, 2017 – St. John's, N.L. – Department of Finance Canada
Small businesses are important job creators for middle class Canadians. And the Government of Canada is committed to supporting them and all business owners and professionals to help them grow, invest and create good, well-paying jobs.
Finance Minister Bill Morneau met with the local business community, including the St. John's Board of Trade, as part of a cross-Canada listening tour in support of the Government's ongoing consultations on tax fairness proposals involving Canadian-controlled private corporations. Small Business and Tourism Minister Bardish Chagger is also meeting with business owners and professionals to advance the Government's cross-country dialogue on ways to build a fairer tax system for middle class Canadians. Canada has one of the lowest corporate tax rates, and the lowest small business tax rate, in the G7. These rates are designed to help Canadian businesses create middle class jobs, invest in their community and grow. We want to make sure they are being used fairly.
"I know first-hand that running a business is hard work. It involves taking risks, suffering setbacks, and often a great deal of sacrifice. I want to reassure middle class small business owners that they are not the focus of these changes. I am committed to ensuring that their hard work is rewarded, and that Canada's tax system continues to help businesses small and large to expand and create jobs. Meetings like the ones today are an important part of the dialogue as we consult on ways to ensure a competitive and fairer tax system for all Canadians."
- Bill Morneau, Minister of Finance
"Over the coming weeks I look forward to engaging with Canadians, including small business owners, professionals and experts, on how to achieve tax fairness. There is misinformation about our Government's proposals that needs to be dispelled. For example, reasonable dividends paid to adult family members will not be affected. And our proposal on passive investment income will only be effective going forward, while still protecting an owner's ability to invest in their business and save for downturns. We are committed to making Canada's tax system fairer for all Canadians. And we want to make sure we get it right."
- Bardish Chagger, Leader of the Government in the House of Commons, and Minister of Small Business and Tourism
- An increasing number of Canadians—often high income individuals—are using private corporations in ways that allow them to reduce their personal taxes. In some cases, someone earning $300,000 with a spouse and two adult children can use a private corporation to get tax savings that amount to roughly what the average Canadian earns in a year.
- The Government of Canada is consulting Canadians on proposals to ensure equity in Canada's tax system while maintaining Canada's low and competitive business tax rates. According to the Coalition for Small Business Tax Fairness, two thirds of businesses in Canada earn less than $73,000 a year and these hard-working middle class small businesses are not our focus.
- Canada has a combined general corporate tax rate that is 12 percentage points lower than our largest trading partner, the United States.
- Small businesses in Canada benefit from support that includes a reduced federal income tax rate of 10.5 per cent on their first $500,000 of active business income.
- The combined federal-provincial-territorial average tax rate for small business is 14.4 per cent, the lowest in the G7 and fourth lowest among Organisation for Economic Co-operation and Development countries. Small businesses can retain more of their earnings to reinvest, supporting growth and job creation.
- In addition to generous tax support, small businesses also benefit from direct program support for scaling up, including access to financing and foreign markets, support for innovation, and services to build entrepreneurial and management capacity through programs such as the Industrial Research Assistance Program and the Canada Small Business Financing Program. A number of federal entities provide support for small and medium-sized enterprises including Innovation, Science and Economic Development Canada, Global Affairs Canada's Trade Commissioner Service, Export Development Canada, and the regional development agencies. Most notably, the Business Development Bank of Canada serves 49,000 Canadian small and medium-sized enterprises and has reached a total of over $29 billion committed to small and medium-sized businesses.
- Ministers Morneau and Chagger Kick Off National Listening Tour With Small Business Owners
- Minister Morneau Announces Next Steps in Improving Fairness in the Tax System
- Minister Morneau Brings Message of Tax Fairness to Toronto Region Board of Trade
Media may contact:
Office of the Minister of Finance
613-369-5699 / 613-462-5469
Department of Finance Canada