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Federal tax reform: what we're doing to get the government to modify its unfair plan

In the summer of 2017, the federal government proposed the most drastic overhaul of the tax system in decades. These changes would have hurt small business owners by increasing your tax burden and adding complex red tape—so we fought back, and so did you.

In reaction to pressure from CFIB and small business owners like you, the government announced that it would make some adjustments to the sweeping tax changes it proposed, and then made further changes in the 2018 budget. There was some good news as some proposed measures were taken off the table and the government reinstated its promise to lower the small business tax rate. But other changes may be a concern for you if you use them in your business.

Here are some of the major changes:

Keeping up the fight for tax fairness

We have come a long way from the original proposals, but the changes may still have a negative impact on your business. That’s why we’re still pushing the government to:

  • Delay implementation of new income-splitting rules until at least 2019, so you have time to prepare;
  • Exempt spouses from the income-splitting test, to recognize the crucial formal and informal roles they play in your business;
  • Ensure that previous passive investments are protected, as was promised in the earlier proposals.

We are also urging the provincial governments to not move forward with similar changes to passive investment income that would reduce access to the provincial small business tax rate. 

How we got here

Since the announcement of the tax proposals, CFIB has mobilized to fight for your business. Here are some of the ways we have pushed back:

  • Forming a coalition with more than 70 associations in all sectors of the economy. CFIB is a leading member of the Coalition for Small Business Tax Fairness, which has publicly called on government to drop the proposed changes.
  • Wrote and met with MPs and Cabinet to tell them how these changes will hurt our members, urging them to reconsider. We sent 22,500 Action Alerts opposing the unfair overhaul to MPs.
  • Participated in the consultation. You can read our submission to the Department of Finance, which was informed by your input. We also testified before the Commons and Senate finance committees.
  • We made a lot of noise in the media, with publications or news releases almost every week. Read our op-eds in the Financial Post, Winnipeg Free Press, Huffington Post and Globe and Mail.

July 31, 2019

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Topics in this Article: Taxes

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