OTTAWA, March 22, 2017 –Raymond Chabot Grant Thornton publishes its summary of the main tax measures announced and highlights certain measures. Prepared by a team of tax specialists in the lock-up, this tax document may be consulted here.
Measures for the middle class …
This second budget tabled by Canada’s Finance Minister, the Honourable Bill Morneau, includes measures to build a stronger middle class. Raymond Chabot Grant Thornton salutes the injection of an additional $1.8B over six years, starting in 2017-2018, so Canadian workers can acquire the necessary skills and tools to succeed in a changing economy. “The $400M investment over three years in late-stage venture capital for more established businesses is also noteworthy,” stated Tax Partner, Luc Lacombe.
“These are interesting measures for the Canadian economy. Nevertheless, it would have been advisable to provide our business leaders with additional tax and financial incentives to support their sustainability, in the national, continental, and international markets. The trade dynamics with the United States, Canada’s main trading partner, could be transformed following the adoption of protectionist measures by the U.S. This situation further supports the need to implement a reduced tax rate or tax credits to foster entrepreneurship and innovation, among others,” stated President and CEO, Emilio B. Imbriglio.
Additionally, Raymond Chabot Grant Thornton salutes additional initiatives to close loopholes and crack down on tax evasion and tax avoidance, issues the firm has often publicly raised.
… pending stronger measures for businesses!
Zero tax on a portion of SMEs’ taxable income
In connection with the recent pre-budget consultation process, Raymond Chabot Grant Thornton had recommended a number of measures it believes are relevant for stimulating growth across the country (see the pre-budget comments at www.rcgt.com/budget-recommendations).
Among these, Luc Lacombe, reiterated, “Low taxes attract investments and create jobs. With the tax rate holding at 10.5%, Canadian SMEs will not have sufficient tax manoeuvrability for sustained investments in their businesses.”
Raymond Chabot Grant Thornton continues to lobby for the elimination of tax on a portion of SMEs’ income (the first $500,000 of taxable income) provided they invest the savings into productivity, job creation and innovation initiatives, while avoiding abuses.
The firm continues to hope that these measures will be adopted in the near future.
Business transfer tax equity
Another matter that should be resolved quickly is the issue of taxes and entrepreneurship where there is still a lack of equity on business transfers to members of the same family or not at arm’s length.
The Quebec government recently extended tax equity on business transfers to all businesses in all activity sectors. “The federal government is taking a first step in this direction today by announcing its intention to publish a document in this issue in the coming months. This measure should be harmonized across Canada to ensure tax equity for business owners wishing to transfer their business to family members. A public consultation initiative on business transfers that goes beyond the tax issue should be undertaken and would serve to mobilize stakeholders throughout Canada,” added Éric Dufour, Regional Vice-President and Entrepreneurial Succession National Leader.
Lastly, Raymond Chabot Grant Thornton always supports major infrastructure investments to stimulate growth and invites the federal government to publish its long-term investment plan in the near future. “In order to maintain healthy public finances and balance the budget, announcing this program would be a productive move, for both strategic and efficient investments with maximum results and avoiding overinvestments and recurring deficits,” added Imbriglio.
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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