The Trudeau government's plan is to close (legal) loopholes that it says give a growing number of wealthy, small-business owners an unfair tax advantage over other Canadians. The key argument to this is that the tax incentives targeted by the Liberals are critical for Canada's economically crucial small-business sector. The current tax structure is necessary for doctors, lawyers and entrepreneurs, including those in the so-called middle class, who take personal financial risks when they decide to open a company. One change seeks to eliminate an incentive that enables small-business owners to use their corporations as a way to shift some of their income to family members who face lower personal tax rates, even if those relatives are not active in the Business.
Another change would limit the use of private corporations to make passive investments in stocks or real estate. The proposed change is designed to ensure that taxes on passive investments inside a corporation are treated the same way as those outside the company.
The third reform would limit the ability to convert a corporation's regular income into capital gains, which are typically taxed at a lower rate.
Whats key here is that if the government can't regulate you to the point that you cannot compete with large corporations or in the international marketplace then they want to eliminate all financial incentives as well. We will soon be a country of government workers, bankers and insurance companies!
I am a concerned Canadian that is fed up seeing companies and people leave Canada due to the high cost of doing business and living.