Small Business Tax Rate Drops in 2018
December 28, 2017 – Ottawa, Ontario – Department of Finance Canada
When you have an economy that works for the middle class, you have a country that works for everyone. The Government is committed to building a strong economy and a fairer and more efficient tax system that benefits all Canadians. That is why as one of its first actions, the Government raised taxes on the wealthiest one per cent in order to cut taxes for the middle class. As well, the Government’s first budget replaced the previous child benefit system with the Canada Child Benefit, which is simpler, more generous, and better-targeted to those who need it most.
The Government is building on its efforts to support the middle class and help those working hard to join it by lowering the small business tax rate in the New Year, better enabling businesses to grow and create good, well paying jobs.
Effective January 1, 2018, the small business tax rate is proposed to be reduced to 10 per cent, as a first step toward lowering it to 9 per cent in 2019. As a result, the combined federal-provincial-territorial average tax rate for small business will be by far the lowest in the G7 and fourth lowest among Organisation for Economic Co-operation and Development countries.
This intended reduction will provide a small business with up to $7,500 in federal tax savings per year. With the small business tax cut, entrepreneurs can retain more of their earnings to reinvest, supporting the growth of their business and job creation.
The Government’s investments in people, communities and in the economy are working to strengthen the middle class and to ensure Canadians have the support, resources and confidence they need to succeed, create jobs and grow the economy. The investments the Government has made in Canadians and their families, in communities and in the economy are working. Canada now has the fastest growing economy in the G7 and among the best job growth in a decade.
“Over the last two years Canada’s economy has created nearly 600,000 jobs, and today we lead the G7 in growth. Our ambitious plan to help strengthen the middle class is having a real and positive impact for families and the job creators who support communities from coast to coast to coast. In 2018, we are doubling down on that plan, by cutting taxes for small businesses and keeping them low for middle class families.”
- Bill Morneau, Minister of Finance
Media may contact:
Office of the Minister of Finance
Department of Finance Canada
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