Department of Finance

On July 18, 2017, the federal Department of Finance released legislative proposals and a consultation paper dealing with tax planning affecting private corporations. The goal is to close loopholes that allow wealthy Canadians to avoid higher tax rates, largely by targeting people who incorporate themselves and then draw income from their businesses while paying lower corporate taxes. These proposals, if enacted, will potentially affect most Canadian business owners who carry on their businesses through private corporations, significantly increase the complexity of the tax rules applicable to private corporations and reverse many long-standing tax policies that have encouraged business growth.