CFIB calls on other provinces to follow this important precedent
TORONTO, Nov. 15, 2018 /CNW/ - The Canadian Federation of Independent Business (CFIB) is calling on all provinces to follow Ontario's lead by keeping access to the provincial small business tax rate open for businesses affected by new federal tax rules on passive investment income.
CFIB's call came today after the new Ontario government announced that it will reverse the previous provincial budget measure to begin taxing small firms at the large corporate level if they earn more than $50,000 in passive investments income each year. The previous Ontario government adopted the new federal rules in its spring budget.
"We are very pleased to see Premier Ford and Finance Minister Fedeli stand up on behalf of small business owners," said CFIB president Dan Kelly. "Given the rising federal tax burden on small firms with multi-year plans to raise CPP premiums and carbon taxes, it is critical that provinces ensure all small firms retain access to the small business tax rate."
CFIB renews its call for all provinces to reject the federal approach, and is encouraged that the incoming New Brunswick government has made an election commitment to do the same.
The federal government's new rules on passive investment income mean that some small businesses that have passive investments will lose access to the 9 per cent small business tax rate and be taxed at the same 15 per cent rate as big businesses. If provinces follow in the federal government's footsteps, small businesses will also lose access to the lower provincial tax rate. Many small business owners use their income from investments to keep their doors open and pay their staff during economic downturns, as well as for retirement savings.
"Many small firms are facing a giant hike in their corporate tax bill as a result of their passive investments and Ontario's move is welcome news. CFIB will continue its efforts to get other provinces and all federal parties to commit to reversing this harmful measure in the months ahead," concluded Kelly.
The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
SOURCE Canadian Federation of Independent Business
For further information: For media enquiries or interviews, please contact: Milena Stanoeva, CFIB, 647-464-2814, [email protected]