Conservative Leader Andrew Scheer is pledging to repeal changes to the tax system that led to a near war between small business and the Liberal government two years ago.
Scheer said today he’ll reverse the decision by the Liberals that increased the tax rate on small business investments and made it harder for companies to pay dividends to family members.
“A new Conservative government will continue to celebrate small businesses as drivers of prosperity, and not view them merely as sources of revenue,” he said.
In 2017, the Liberals changed the tax system for businesses to close what they called an unfair loophole. It allowed small businesses to keep income from sources not related to their work inside their corporations, where it was taxed at a lower rate than if they had counted it towards their personal bottom line.
The government had argued that allowing that system meant people were incorporating just for a tax benefit, but a massive outcry ensued among those who felt the Liberals were branding self-employed Canadians as tax cheats.
The government was subsequently forced to change their proposed new rules, and decided to allow businesses to keep a maximum of $50,000 in passive income before the new taxes kicked in.
Scheer said today he’ll just reverse that, and another change the Liberals made around paying dividends to family members.
He’ll also appoint an expert panel to review the entire tax system in order to modernize it, find a way to help businesses better navigate the tax system and reduce regulations by 25 per cent over four years, which would be identified after a review. He said he’d assign a minister specifically to cut regulation.
Scheer is campaigning today in southwestern Ontario, making his tax announcement in St. Catharines before moving on to Waterloo and London, Ont. pushing his central message that the election is a question about who people should trust to help them get ahead.