Federal Budget -> October 24, 2017 Fall Economic Statement
October 24, 2017 Fall Economic Statement - Tax Changes
Fall Economic Statement - on Department of Finance website
- starts the indexation of the Canada Child Benefit on July 1, 2018, where it was previously legislated to be indexed starting July 1, 2020. Both the benefit amounts and phase-out thresholds will be indexed.
- Working Income Tax Benefit (WITB) will be further increased starting in 2019, coming into effect in that year as part of the enhancement of the Canada Pension Plan.
Tax Changes for Private Corporations
The October 24, 2017 Notice of Ways and Means Motion (link above):
- revises the gross-up rate for non-eligible dividends from 17% for 2017 to 16% for 2018 and 15% for 2019 and later years
- revises the tax credit for non-eligible dividends from 21/29ths of the gross-up in 2017 to 8/11ths in 2018 and 9/13ths in 2019 and later years.
- Increases the small business deduction from 17.5% in 2017 to 18% for 2018, and to 19% for the 2019 and subsequent taxation years.
Further changes announced:
- move forward on restricting income sprinkling effective for 2018 and subsequent taxation years, simplify the proposed measures, and provide greater certainty as to their application. Revised draft legislation has been released - see Small Business Tax Changes.
- limit the benefit of investing passively in private corporations, including an annual threshold of $50,000 of passive income. Details of proposed rules to be released in Budget 2018.
- the proposed measures to limit access to the Lifetime Capital Gains Exemption will not happen.
- the proposed measures relating to the conversion of income into capital gains will not happen.
- the government intends to bring forward legislative proposals to ensure that farmers and fishers are not inappropriately denied the small business deduction on income from sales to a cooperative.
Revised: November 24, 2021
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