Ontario government rejects federal tax changes on passive investment income
OTTAWA — The Ontario government is refusing to follow the federal Liberals’ lead with a controversial tax change related to passive investment income in personal corporations.
Federal Finance Minister Bill Morneau’s office has maintained the change was about ensuring wealthy people didn’t start tiny corporations just to get a better tax rate than people in the middle class.
The federal tax change was part of Morneau’s package of reforms last year, which he eventually watered down following a backlash from small-business owners and incorporated professionals, such as doctors and lawyers.
In its fall economic update today, the province’s Progressive Conservative government says it will introduce new legislation to reverse a plan by its Liberal predecessors to parallel the federal changes in Ontario.