Content provided by the Atlantic Chamber of Commerce
Today marks a significant milestone in the fight against ill-conceived changes to the taxation of Canadian Controlled Private Corporations. This morning the Senate Committee on National Finance released their report on pan-Canadian consultations. The gist of the recommendations (below) is that the federal government should withdraw the tax reform proposals in favour of a comprehensive review of the entire tax system.
Equally important, Finance Minister Morneau made an announcement regarding updates to the government’s efforts to reduce the use of income sprinkling to reduce tax obligations.
Summary of Senate National Finance Committee Recommendations
Recommendation 1: That the Minister of Finance withdraw his proposed changes to the Income Tax Act respecting Canadian-controlled private corporations.
Recommendation 2: That the Government of Canada undertake an independent comprehensive review of Canada’s tax system with the goal of reducing complexity, ensuring economic competitiveness, and enhancing overall fairness.
Recommendation 3: That, should the Minister of Finance proceed with his proposals to amend the Income Tax Act respecting Canadian-controlled private corporations, then he should delay their implementation until at least 1 January 2019, and:
- release, as early as possible, draft legislation and related guidance documents;
- undertake thorough, cross-Canada consultations with businesses, tax specialists, physicians, farmers, and other Canadians on draft legislation;
- undertake, and release publicly, an economic impact assessment of the proposals;
- conduct, and release publicly, a gender analysis of each of the proposals; and
- assess, in cooperation with provinces and territories, the potential impacts of the proposals on the accessibility of health care, and consider measures to avoid these consequences.
Click here for a copy of the report.