Ottawa Announces Big Changes for Small Businesses

The Background

After a s–t-ton of uproar, Ottawa has finally changed their tune on their proposed tax plan. The government announced yesterday that they’d be cutting the small business tax (like Trudeau originally promised on the campaign trail) from 11.5% to 10% in January and then to 9% in 2019. Clearly backpedalling on earlier ideas, Trudeau said, “This tax cut will support Canada’s small businesses so that they can keep more of their hard-earned money, money that they can invest back into their businesses, their employees and their communities.” (We’ll take it, thank you very much.) Financial Post

What Else You Need to Know

These aren’t the only changes coming to Canada’s tax system. Finance Minister Bill Morneau announced other tweaks to Ottawa’s original plan, including making sure that angel investors and venture capitalists don’t end up facing “heftier tax burdens” and that the government doesn’t end up subjecting small businesses to unnecessary “red tape.” One of the biggest changes comes to the rules around capital gains exemptions. After originally suggesting substantial changes to limit access to the lifetime capital gains exemption, Ottawa has decided not to move forward with that proposed adjustment.

What’s Next?

The government plans to announce a series of changes to the original tax plan (which was proposed in mid-July) throughout the week. Stay tuned.