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The Truth About Trudeau’s Tax Hikes: Preview

Spencer Fernando

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.

Stay tuned.

Spencer Fernando, MyToba News

Spencer Fernando is a columnist and reporter for MyToba News. You can read more of Spencer’s writing at his website SpencerFernando.com
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