Federal tax changes were one topic of discussion at the 2018 St. Albert Business Breakfast hosted by the City of St. Albert on Wednesday.
About 100 people listened to a tax professional who spoke about changes expected in the upcoming federal budget on Tuesday.
Stephanie Boldt, senior manager of tax services at Pricewaterhouse Coopers LLP, said income splitting is one item that is on the table at this point.
“It’s been an interesting year for tax advisers and private business owners and unfortunately I don’t think we’re done yet,” she said.
Last July the government released proposed changes on the taxation of private businesses that included income splitting, capital gains and passive investments.
Since the announcement the federal government has made a few revisions, which included a simplified version of income splitting, and walking away from capital gains deduction planning and surplus stripping.
“They wanted to understand more intergenerational transfer of business,” she said.
In September farmers from across Sturgeon County attended a meeting at Cardiff Hall to hear about the proposed tax changes. Many were concerned that they wouldn’t be able to pass the farm onto their children.
Boldt said she expects the government to revisit capital gains once they’ve spoken to farmers about the issue.
She said she was surprised to learn that the federal government still has plans to move forward with changes to passive investments, since the issue is so complex.
Passive income is money earned from investments. Owners use these assets to expand their company, save for retirement or prepare for a rough financial period.
The Liberal government has decided to allow for some passive investment in corporations. The changes to passive investments is expected to be in the 2018 budget.
After the proposed changes were announced, Boldt said the federal government was faced with public outrage. In response to the criticism, she said the federal government lowered the business tax rate to 10 per cent in January 2018. Next January it will be lowered to nine per cent.
Boldt said the government has tried to simplify the changes, but has only ended up doing the opposite.
“It’s not simple at all. There’s nothing simple about these rules,” she said.
She said not enough time was given during the government’s consultation period, where Canadians had from July to October last year to give input.
At the breakfast the City of St. Albert also provided updates on numerous developments around the city including the recent opening of Landmark 8 Cinemas in Jensen Lakes Crossing; two new schools under construction in the Jensen Lakes area, and the progress on the mammoth Alberta Liquor and Gaming Commission building in Campbell Business Park.