Our firm has been assisting businesses attain success for close to 70 years. We understand their situation and, more important, what they need to achieve their full potential for growth. The purpose of the proposed measures is, therefore, to enhance the performance and competitiveness of our businesses.
– Emilio B. Imbriglio, President and CEO
MONTRÉAL, February 15, 2017 – As part of the pre-budget process, Raymond Chabot Grant Thornton is publishing the budget recommendations it recently submitted to the Canadian and Quebec Finance Ministers designed to allow wealth-creating businesses to better prosper in an increasingly competitive economic environment.
“Ensuring that entities benefit from the best business strategies possible is our constant motivation, which is why we are once again submitting a number of budget proposals. While some have already been put forth, they remain very relevant. Raymond Chabot Grant Thornton takes the success of dynamic local businesses to heart. Their success leads the success of society at large,” stated President and CEO, Emilio B. Imbriglio.
The firm’s proposed measures centre on the four main components it feels are key to our businesses’ competitiveness and productivity: tax incentives, entrepreneurship, innovation and business immigration.
1. Tax incentives
Among others, on the tax front, the firm is asking the governments to:
- Abolish corporate income tax on the first $500,000 of an SME’s taxable income, provided that the savings be invested in productivity, employment and innovation in a manner that avoids abuse. Investments could be subject to accelerated CCA, possibly grossed up in the year, or to a tax credit;
- Commit, in the next budget, to amending tax legislation to make business transfers between family members more equitable, from a tax perspective, for all businesses in all sectors.
The firm proposes the following measures for entrepreneurship:
- Governments should set up a fund to support businesses that call upon professionals to help them implement a formal and complete succession plan;
- The Quebec government should provide a tax credit for entrepreneurs who take courses or professional development to improve their efficiency and effectiveness in carrying out their numerous duties;
- The Quebec government should implement various measures to encourage Quebec businesses to become publicly listed.
For this third strategic priority, Raymond Chabot Grant Thornton is suggesting that, for example:
- Governments create an innovation tax credit to help SMEs increase their technology investments and continue to grow;
- The Quebec government abolish the qualifying expenditure threshold for scientific research and experimental development (SR&ED). Failing this, SMEs should be exempted from the threshold or be able to carry forward their expenditures to subsequent years;
- The federal government improve the performance of the SR&ED tax credit program by eliminating the taxable income or capital restrictions provided businesses reinvest the resulting benefit in SR&ED activities and by abolishing the discrimination in application.
4. Business immigration
In the case of this strategic cornerstone, the firm recommends that:
- The Quebec government increase its quotas (or abolish the quota system) in the Immigrant Investor Program;
- The Quebec government work in partnership with industry players (in particular Investissement Québec and financial intermediaries) to agree on appropriate measures to boost the retention and economic impact of investment immigration;
- The federal government reintroduce its Immigrant Investor Program and give the provinces more latitude for the Immigrant Entrepreneur Program.
Family taxation in Canada: Upcoming Analysis
“We are taking advantage of the pre-budget process to announce that our firm is currently working on an analysis of family taxation in Canada to be released in the coming months. Canadian income tax is marking its 100th anniversary in 2017 and is still based on an archaic definition of the Canadian family in many instances. The analysis to be submitted will be prepared by specialists Brigitte Alepin, Manon Deslandes and Luc Lacombe and is intended to contribute to updating the tax system and highlight 100 years of income tax in Canada,” added Imbriglio.
Additional initiatives are proposed in the memoranda submitted to the two Finance Ministers. For more information on the measures proposed to the Quebec government, read the letter to Minister Carlos Leitão, at www.rcgt.com/qcbudget-consultation-2017-2018 (in French). The recommendations to federal Finance Minister, Bill Morneau, may be viewed here: www.rcgt.com/federalbudget-consultation-2017 (in French).
About Raymond Chabot Grant Thornton
Founded in 1948, Raymond Chabot Grant Thornton has become a Canadian leader in the fields of assurance, tax, consulting services, and business recovery & reorganization. Its strength is based on a team of over 2,300 professionals, including some 200 partners. Together, Raymond Chabot Grant Thornton and Grant Thornton LLP, another Canadian member firm of Grant Thornton International Ltd, help dynamic Canadian organizations unlock their potential for growth with over 4,100 professionals and some 140 offices across Canada. Grant Thornton International Ltd provides clients with the expertise of member and correspondent firms in more than 130 countries, with over 42,000 professionals.
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Senior Consultant – Public Relations
Raymond Chabot Grant Thornton