Canadian Contractor

Steve Payne   

The Federal Liberals’ small business tax reform: Four ways it may affect you

Canadian Contractor

If you have a question about the Morneau tax plan, please post it here

Federal Finance Minister Bill Morneau has faced a lot of fury from Canadian small business owners over the past three months, as his bureaucrats conducted “consultations” with affected groups on pending legislation to “reform” (translation: increase) taxes paid by professional and private corporations.

Opponents of the plan to reduce the ways in which small businesses can shelter their profits from taxes include renovation contractors and custom homebuilders, farmers, doctors, architects, accountants and other individuals running self-incorporated small businesses.

Tax legislation is complicated. But courtesy (and copyright) of Toronto-based accounting and tax experts Zeifmans, here are links to brief descriptions of each of the four main “areas of concern” of Morneau’s plan that self-incorporated Canadian contractors need to be aware of. We highly recommend you take five minutes to read through EACH of these short pieces that reside on Zeifmans’ very informative website.

Please note also that the final version of the legislation has not yet been written.

  1. Holding passive investments through a Canadian-Controlled Private Corporation (“CCPC”)
  2. Income splitting
  3. The enhanced capital gains deduction (“ECGD”)
  4. The conversion of income into capital gains

You can join Zeifmans’ mailing list to receive their next update, ‘Proposed Changes to Tax Legislation,’ and watch out for Zeifmans’ weekly tax tip.


If you have specific questions about your tax situation, Zeifmans can help. (1) Post your question below and Zeifmans will answer it publicly or (2) contact Zeifmans directly at or 416.256.4000.



Since 1959, Zeifmans has been developing innovative financial, tax and accounting solutions driven by creative insight. Zeifmans is a comprehensive, one-stop firm offering the benefit of access to a global network of accounting and consulting professionals as a member of Nexia International – one of the top ten global networks of accounting and consulting firms.

Zeifmans’ real estate experts provide builders, contractors, developers, managers and passive investors throughout North America with financial management, compliance and tax planning solutions that add to their bottom line. We help our clients create efficient tax strategies so they can keep their energies focused on opportunities and growth. Click here, for more information about our real estate services and industry insights.



Stories continue below