Personal Finance

Trudeau going after Personal Services Corps disguised as small businesses

  • Last Updated:
  • Dec 17th, 2017 10:14 am
Member
Jul 20, 2017
322 posts
68 upvotes
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 they only save if they have profits
Deal Expert
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Dec 7, 2012
26977 posts
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GTHA
Sebastian6300 wrote:
Nov 15th, 2017 4:47 pm
Ontario is reducing the small business tax by 1% from 4.5% to 3.5% on first 500k to compensate for minimum wage increase.
http://www.cbc.ca/news/canada/toronto/s ... -1.4402074
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...
Small business tax cut never promised to offset minimum wage hike: Wynne
http://toronto.citynews.ca/2017/11/15/s ... ike-wynne/
Deal Addict
Apr 2, 2008
1081 posts
179 upvotes
Sebastian6300 wrote:
Nov 15th, 2017 7:46 pm
actually they only save if they have profits
If you make 500k and but 0 profit , you should not be in this business
Sr. Member
Nov 13, 2013
760 posts
255 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 Addict
Nov 24, 2013
4212 posts
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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
Member
Jul 20, 2017
322 posts
68 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
16741 posts
1796 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.
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Oct 7, 2007
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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
16741 posts
1796 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
49 posts
3 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
2332 posts
1054 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.

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