The Truth About Trudeau’s Tax Hikes: Preview
Despite misleading rhetoric about targeting the wealthy, Trudeau’s tax hikes will hurt a wide-range of Canadians unless big changes are made.
WINNIPEG, MB – The Trudeau government has proposed significant changes to how businesses – particularly family run businesses – are taxed.
While these changes have been sold as only targeting the wealthy, the truth is far different.
To get a sense of the true impact of Trudeau’s tax changes, I interviewed Larry H. Frostiak, FCPA, FCA, CFP, TEP, of Frostiak & Leslie Chartered Professional Accountants Inc.
Larry explained how a wide range of Canadians will be impacted by these changes, including, entrepreneurs, their employees, and in time, many Canadian taxpayers.
Here’s how he broke down the changes:
“The Finance proposals target 3 main initiatives against private corporations, including:
- Income-splitting and dividend-sprinkling;
- Restrictions on the capital gains exemption and how transactions are treated between related persons;
- Proposals on how passive income, including capital gains will be taxed in a private corporation”
Of the 3 initiatives, the last two will create broad and far-reaching tax consequences for private business owners who (in the ordinary course of their business cycle)
- Sell shares and transition their business to a related family member;
- Have arranged for corporately-owned life insurance to fund out a buy-out on death
- Die holding assets in a corporation (there can now be double or triple taxes to the estate)
- Are incorporated farmers and wish to sell farmland or quota within their corporation
- Own real estate or other appreciating capital assets that will be subject to tax within the corporation
In an upcoming series of articles, I will help shed more light on how these tax changes will be bad for Canada. I’ll help you get the truth about Trudeau’s tax changes.
Spencer Fernando, MyToba News