On Tuesday, February 27, 2018, the Honourable Bill Morneau,
Minister of Finance tabled his third budget: Equality and Growth
for a Strong Middle Class.
Despite a relatively strong economy, the government is projecting
sizeable deficits stretching to 2023 (and presumably beyond). The
deficit for the current year ending March 31, 2018 is projected to
be $19.4 billion.
Given the recent activity around the taxation of private
corporations this past year, MNP is pleased to see the
government listened to the voices of Canadian business
owners. While the tax on split income rules will proceed as
drafted, a more practical approach to the passive investment
proposals was introduced.
While Budget 2018 states the government will analyze the
U.S. tax changes over the next few months, it does not
contain any provisions to enhance Canadian tax competitiveness. It will be important for the government to formulate a response in the near term as the U.S. tax changes will
have a significant impact on business in Canada.
Below are highlights from Budget 2018.
CORPORATE TAX RATES
As previously announced, the federal small business rate is 10
percent as of January 1, 2018, and will further decline to 9 percent,
effective January 1, 2019. The combined federal and provincial
corporate tax rates for calendar 2018 are as follows:
MNP Federal Budget Summary
FEDERAL BUDGET HIGHLIGHTS A. Corporate Tax Measures