‘Will provide a lot of relief:’ Ottawa’s passive investment tweaks to ease
Amid the controversial proposed tax on passive investment income, the Finance Minister has recently made a decision to soften the changes by not subjecting the first $50,000 of passive investment income earned by private corporations to the new tax. Given that just 3 percent of Canadian businesses earned above the threshold in 2015, this means that 97 percent of private corporations in Canada will not be affected. Only the remaining 3 percent, which make up 88 percent of taxable income, will be affected. It will go a long way to quelling the criticism about the proposed changes, but it still leaves questions about how future gains on these investments will be treated.