CME recognizes federal government clarifications to income sprinkling rules as part of the changes to CCPC regulations
Ottawa, December 13, 2017
Canadian Manufacturers & Exporters (CME) welcomes today’s announcement that clarifies rules for the tax treatment of Canadian-controlled Private Corporations (CCPCs) and that addresses some of manufacturers’ concerns regarding the proposed tax changes.
Specifically, CME supports the simplification and clarification of rules concerning income sprinkling eligibility and compliance. These modified rules will make it easier for businesses who legitimately employ family members to continue to do so.
In addition, the announced exemption for spouses (65+) and family members who perform significant work for the company respond to CME concerns that the original reforms did not reflect the important contributions family members make to small businesses and failed to account for key differences between business income and salaries/wages.
While CME believes these steps improve upon the reforms as originally proposed, we maintain that the Government of Canada should be focusing its efforts not on isolated tax amendments, but on comprehensive reform that helps attract new manufacturing investment to Canada and that fosters entrepreneurship and growth. CME urges the government to continue its reforms of the tax system with the purpose of incentivizing investment and growth; rewarding and supporting risk-taking, innovation, and entrepreneurship through simple, clear and fair rules.
Small businesses are the engine of the Canadian economy. In the manufacturing sector alone, there are nearly 68,000 establishments with fewer than ten employees and another 20,000 with fewer than 100 employees. Many of these manufacturers are CCPC’s and collectively they employ over 1,000,000 Canadians.
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Since 1871, Canadian Manufacturers & Exporters has been helping manufacturers grow at home and, compete around the world. Our focus is to ensure manufacturers are recognized as engines for growth in the economy, with Canada acknowledged as both a global leader and innovator in advanced manufacturing and a global leader in exporting. CME is a member-driven association that directly represents more than 2,500 leading companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.
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