CDA Essentials 2017 • Volume 4 • Issue 6

CDA at W ork Small Business Taxation: Federal Government to Amend Proposed Changes The federal government recently held a 75-day public consultation on proposed tax changes for small businesses. CDA, in conjunction with the provincial dental associations, was among the more than 21,000 groups and individuals that made formal submissions to this process. CDA submitted its briefing on October 2, emphasizing that the tax policies addressed in the government’s consultation should not be deemed “loopholes,” but in fact were long- standing tax measures that recognized the risk small business owners take and their valuable contribution to Canada’s economic and social well-being. Shortly after the public submission deadline, the Honorable Bill Morneau, Minister of Finance, announced that the government had heard the public’s concerns and would soon offer amendments to the initial proposals. In a series of announcements in October, the government outlined a new approach to these tax issues, including:  Reduction of the Small Business Tax Rate: This tax rate will be reduced from 10.5% to 9% over the next two fiscal years. The maximum savings from this reduction will be $7,500 per year. CDA had asked for such a reduction as part of previous Pre-Budget submissions and Days on the Hill meetings.  Passive Investments within a Corporation: Minister Morneau outlined several principles as they move forward on passive income. C All past investments, and the income earned from those investments, will be protected; C Businesses can continue to save for contingencies or future investments in growth; 11 Issue 8 | 2017 |