Personal Finance

Trudeau going after Personal Services Corps disguised as small businesses

  • Last Updated:
  • Aug 24th, 2018 11:56 am
Deal Addict
Nov 13, 2013
1281 posts
486 upvotes
OTTAWA
BrianV wrote:
Nov 15th, 2017 5:04 pm
Wow, so a business making $500k net every year can save $5k to offset the potential $30-$50k in extra salary expenses? How generous of them...
Yeah but on the other hand many profitbale businesses with nobody earning minimum wage will benefit from this and those struggling but employing people won't benefit at all.
Deal Fanatic
Nov 24, 2013
5074 posts
1676 upvotes
Kingston, ON
BrianV wrote:
Nov 15th, 2017 5:04 pm
Wow, so a business making $500k net every year can save $5k to offset the potential $30-$50k in extra salary expenses? How generous of them...
Actually, if they have an extra $50K in wage expense, then their taxable income is reduced by $50K, so their 'tax savings' would be $6,750 (provincial corp tax burden would drop from $22.5K to $15.75K). Wow, what a deal!

Nevermind the corp's NI after tax would drop from $425K (Fed/ON 15% combined) to $389K (Fed/ON 13.5% combined) when factoring in the drop in earnings. Face With Stuck-out Tongue And Tightly-closed Eyes
Sr. Member
Jul 20, 2017
509 posts
109 upvotes
fogetmylogin wrote:
Nov 16th, 2017 1:50 am
Yeah but on the other hand many profitbale businesses with nobody earning minimum wage will benefit from this and those struggling but employing people won't benefit at all.
It seems that at both federal and provincial level the govs have this jerky reaction anytime they see a backlash...throw in some goodies or what looks like a goodie so they don't loose next election
in the minimum wage case they could have implemented a tax reduction based on the total wages. The present tax reduction has little meaningful relationship to the effect of minimum wage increase. But seeing how loud small businesses reacted to the federal changes, and considering that ontario liberals are behind in polls, they did something.
They seem to have good spin doctors....what is advertised as free tuition is actually a reduction of gov grants and loans for most middle class taxpayers, considering the loss of tax credits too.
The hydro reduction advertised as 25 % comes from high interest borrowed money, and is actually 6%
Most people believe the headlines...and the opposition did not find the same communication efficiency to dispel the gov message
Deal Expert
Feb 29, 2008
19530 posts
2151 upvotes
Montreal
Is there any hard data on the new dividend rules for 2018? I need to plan out my payment schedule for me and my wife.
Deal Addict
Oct 7, 2007
3831 posts
1132 upvotes
mr_raider wrote:
Nov 19th, 2017 3:32 pm
Is there any hard data on the new dividend rules for 2018? I need to plan out my payment schedule for me and my wife.
I am curious to know too. It seems the last news stories I was hearing was that there was some kind of ethics issues with Morneau and all of his companies, Justin was trying to speak on Morneau's behalf at a news conference, and then all went radio silent.
Deal Expert
Feb 29, 2008
19530 posts
2151 upvotes
Montreal
choclover wrote:
Nov 20th, 2017 11:00 am
I am curious to know too. It seems the last news stories I was hearing was that there was some kind of ethics issues with Morneau and all of his companies, Justin was trying to speak on Morneau's behalf at a news conference, and then all went radio silent.
I need to know starting when the "reasonableness" test for dividends will be applied
Newbie
Oct 25, 2010
89 posts
11 upvotes
Cornwall
From https://www.theglobeandmail.com/news/po ... e37027738/ this morning:
Mr. Morneau's shares in Morneau Shepell rose by nearly $1-million in value in the first few days after he introduced the legislation to rewrite federal pension law, which he had advocated for while still in the private sector.

At the time the bill was tabled, Mr. Morneau was relying on an ethics loophole to continue to indirectly own one million shares in Morneau Shepell.
I don't see how he didn't think this was a conflict.

Oh, and even if his shares had been put in a 'blind trust' while he was in public office, do you think he wouldn't have known that these changes would have benefited his company and been making him money?
Deal Addict
May 22, 2003
2812 posts
1225 upvotes
Vancouver
mr_raider wrote:
Nov 19th, 2017 3:32 pm
Is there any hard data on the new dividend rules for 2018? I need to plan out my payment schedule for me and my wife.
AFAIK, nothing is clear yet. I'm sitting tight for now too.
Deal Addict
May 22, 2003
2812 posts
1225 upvotes
Vancouver
So are they going to increase the $50k limit over the years to match inflation at least? Also, have they figured out they can implement this in a simplified manner that won't lead to an administrative nightmare for small businesses to keep track?
Sr. Member
Apr 14, 2015
532 posts
145 upvotes
Tsuu T'Ina, AB
No details yet! You all just have to trust them that they won’t screw this up... again...
Deal Addict
Oct 7, 2007
3831 posts
1132 upvotes
This has all been handled very poorly by the Feds. I am assuming that if they proceed with it, they will still need to vote on it in the House, no?
Deal Addict
May 22, 2003
2812 posts
1225 upvotes
Vancouver
choclover wrote:
Nov 24th, 2017 10:28 am
This has all been handled very poorly by the Feds. I am assuming that if they proceed with it, they will still need to vote on it in the House, no?
They have majority of the house and will push it through.

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