Request a Quote

Budget 2018: Key Considerations for Small Business

Canada’s Finance minister, Bill Morneau has just tabled his third federal budget, and here are just some of the key highlights that will be important for small business owners and operators to keep front of mind:

  • Small business tax rate will go from 10.5% to 10% for 2018 and to 9% in 2019. The general corporate tax rate is 15%.
  • Introduction of new rules around passive income for small business owners.
  • There is now a $50,000 threshold on passive income held in corporations. When passive income reaches $150,000, a business owner will lose the Small Business Tax Rate. They’ll be taxed as a large corporation at that time.
  • New funding for research, commercialization and support for exporters.
  • Govt. to invest $90.6 million over the next five years to combat tax avoidance.
  • $231M over 5 years to address the opioid crisis, including $165M this year.
  • Legislation has been promised this year on federal pay equity, but no estimate yet on when, and on how much this will cost.
  • A new “Apprenticeship Incentive Grant for Women”  to give women in male-dominated trades fields $3,000 per year of training (or up to $6,000 over two years). Almost all Red Seal Trades are eligible.
  • A “use it or lose it” 5 weeks extra leave for two-parent families under the EI Parental Sharing Benefit (Not in effect till June 2019). Expected to cost $1.2 billion over 5 years.
  • A promise to allow new mothers and those on sick leave to keep more of their employment insurance benefits if they work just a few hours every month.
  • A rebranded “Canada Workers Benefit” (formerly the “Working Income Tax Benefit”) aimed at low-income workers, with earnings at or below the poverty line. It enriches and expands eligibility at a cost of $1 billion. The changes will mean an extra 170 a year to a maximum of $1,355 for unattached workers, and $2,335 for couples or single parents. benefit refunds however don’t begin till 2020.
  • A bump in EI premiums paid by both employers and employees, to cover the cost of new measures introduced. The increase will come into effect in the fiscal year beginning in April.
  • The creation of advisory council on implementing national pharmacare – but no money announced yet.
  • As expected, there will be a tax on cannabis (excise duty) as well, which depends on whether the plant product is a seed, flower, trim or seedbag. More details to be provided when non-medical marijuana becomes available for legal retail sale.

If you’d like to review the federal budget, its available at the link below for download and review.

Federal-Budget-2018