Tax changes needed to avoid ‘two classes of Canadians’: finance minister
VANCOUVER — Federal Finance Minister Bill Morneau says income-tax reforms are needed because small business owners have an unfair advantage that could create two classes of Canadians for tax rates and retirement income.
He said the current system means business owners who incorporate their companies pay lower taxes while a second class of citizens ends up with a higher tax bill.
Proposed changes introduced in July would do away with “inappropriate” tax planning methods and deal with unintended consequences benefiting the “privileged few” whose numbers have grown significantly, Morneau said on Tuesday.
“We’ve had a 300-per-cent increase in the incorporation of professionals in the last 15 years,” Morneau told reporters after meeting with small business owners in Vancouver as part of cross-Canada consultations.