Bill Morneau’s Discussion Paper: Update #3
TPC Financial Group Ltd. is committed to keeping all impacted individuals informed of new developments related to Bill Morneau’s proposed tax changes. As you are likely aware, the changes relate to perceived tax “loopholes” that are being used by professionals and small business owners across Canada. The proposed changes look to address the following items:
- Income splitting with family members.
- Passive investment income within corporations.
- Manipulation of income into capital gains.
The general consensus amongst industry experts is that if the proposed changes are implemented, legislation relating to income splitting and passive investment income will not be retroactive and would be implemented starting January 1st, 2018. In this respect, no immediate action should be taken in anticipation of these changes.
Once the result of the consultation paper has been announced in October and federal guidelines have been provided, a TPC Financial Group Ltd. advisor will be available to outline how the changes relate to your specific situation and any necessary action to be taken.
The finance minister has insinuated that professionals are unfairly taking advantage of tax “loopholes”, however, he has conveniently ignored the many challenges professionals and business owners face that are simply not experienced by the majority of the Canadian population.
To help change the narrative, TPC Financial Group Ltd. has provided a case study to the public which outlines some of these challenges through the life of a fictional dentist named John. This account of John’s finances can be found on Huffington Post here.
We encourage everyone to read, comment, and share the article if they agree. The more people who are aware of the challenges faced by young professionals, the softer the federal government’s stance will be on the proposed changes.
Our past newsletter provided a template that anyone can forward to their local MP in order to have their voice heard. We also provided email and mailing addresses to get your letter in front of your MP as quickly and as easily as possible. If you wish to access this letter, you can download a copy here.
Contact information for your local MP can be found here.
- August 14th: Our office will be posting a second case study to the Huffington Post which will show how the proposed changes could potentially impact retirees.
- August 21st: Our office will be drafting an open letter to Bill Morneau that will provide a detailed analysis on why these proposed changes are not in the best interest of the Canadian economy.
- August 28th: We will define the “reasonability test” that is being proposed for income to spouses and family members.
- September 4th: TBA
- September 11th: TBA
- September 18th: TBA
- September 25th: TBA
If you have any questions or concerns about how these proposed changes could impact your specific situation, please do not hesitate to call our office and speak with a TPC Financial Group advisor.
If any of your colleagues wish to be kept informed of ongoing developments, feel free to forward our newsletters or encourage them to subscribe on our website.