QUÉBEC CITY, April 12, 2022
QUÉBEC CITY, April 12, 2022 /CNW/ – Quebec’s small and medium-sized businesses are at the heart of our economy and our communities. Budget 2022 is tackling barriers faced by these businesses so they can grow and create good middle class jobs.
Today, the Minister of Environment and Climate Change, the Honourable Steven Guilbeault, highlighted important new tax relief measures in Budget 2022 that will help small and medium-sized businesses throughout the province and the entire country to grow and re-invest in their own success. Minister Guilbeault made the announcement at the Grand Marché de Québec, home to dozens of small and medium-sized Quebec businesses.
Budget 2022 proposes to raise the capital threshold for the lower small business tax rate of 9 percent from $15 million to $50 million before the 15 percent tax rate kicks in. This significant change would allow more medium-sized Canadian businesses to benefit from the small business deduction. It would also increase the amount of qualifying active business income that can be eligible for the deduction.
This will deliver an estimated $660 million in tax savings Canada-wide over the 2022–2023 to 2026–2027 period that can be reinvested towards growing and creating jobs.
Budget 2022 will make it easier for Canadian businesses to innovate and become global leaders in the industries that will grow our economy and create new jobs.
“Quebec’s small and medium-sized businesses are the backbone of our economy. Budget 2022 is investing in people and businesses, in the green transition, and in innovation and productivity. By expanding the lower tax rate for small and medium-sized businesses, we are helping to create a stronger Canada—now and for decades to come.”
– The Honourable Steven Guilbeault, Minister of Environment and Climate Change
Small businesses currently benefit from a reduced federal tax rate of 9 percent on their first $500,000 of taxable income, compared to a general federal corporate tax rate of 15 percent. A business no longer has access to this lower rate once its level of capital employed in Canada reaches $15 million. However, phasing out access to the lower tax rate too quickly—and then requiring a small business to pay more in tax—can discourage some businesses from continuing to grow and create jobs.
The Government of Canada is already helping small and medium-sized businesses to invest in new technologies and capital projects by allowing for the immediate expensing of up to $1.5 million of eligible investments, beginning in 2021.
In support of economic growth, Budget 2022 also proposes launching a world-leading Canada Growth Fund that would match every $1 with $3 from private-sector investment and will help meet important economic goals, such as reducing emissions and contributing to achieving Canada’s climate goals; diversifying our economy and bolstering our exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors; and supporting the restructuring of critical supply chains in areas important to Canada’s future prosperity.
In support of economic growth, Budget 2022 also proposes to create a new Canadian Innovation and Investment Agency with $1 billion over five years, starting in 2022–23, to support its initial operations. This Agency will work with new and established Canadian businesses to help them make the right investments to innovate, grow, create jobs, and be competitive in the changing global economy.
SOURCE Environment and Climate Change Canada