December 20, 2018 – Ottawa, Ontario – Department of Finance Canada
Every day, in communities all across the country, Canada's small business owners and entrepreneurs work hard to grow their businesses and create the jobs that middle class families rely on. Collectively, small businesses now account for about seven out of 10 private sector jobs.
To support Canada's hard-working entrepreneurs, the Government cut the small business tax rate from 10.5 per cent to 10 per cent effective January 1, 2018, with a further reduction to 9 per cent coming into effect on January 1, 2019.
With this reduction, the combined federal-provincial-territorial average income tax rate for small business will be 12.2 per cent—the lowest in the G7 and the fourth lowest among members of the Organisation for Economic Co-operation and Development. For small businesses, compared to 2017, this will mean up to $7,500 in federal tax savings each year—savings that they can reinvest in purchasing new equipment, developing new products, or creating new jobs.
The year 2019 also marks the replacement of the Working Income Tax Benefit with the more generous Canada Workers Benefit (CWB). The CWB will put more money in the pockets of low-income workers—encouraging more people to join and stay in the workforce, and offering real help to more than 2 million Canadian workers. In addition to being more generous, the CWB will be more accessible than the program it replaces, as the Canada Revenue Agency will be able to calculate the CWB for anyone who has not claimed it on their tax return. Canadians will begin to receive enhanced benefits under the new CWB in early 2020, when they file their 2019 tax returns.
Details on these and other tax measures coming into effect in 2019 are available through the links below.
In addition, the Government's 2018 Fall Economic Statement introduced three immediate changes to Canada's tax system that will further support investment, jobs and growth in Canadian businesses, creating opportunities in communities across the country. These changes, which apply to qualifying assets acquired after November 20, 2018, include:
- Allowing businesses to immediately write off the full cost of machinery and equipment used for the manufacturing and processing of goods.
- Allowing businesses to immediately write off the full cost of specified clean energy equipment.
- Introducing the Accelerated Investment Incentive, which will allow businesses of all sizes in all sectors of the economy to write off a larger share of the cost of newly acquired assets in the year the investment is made.