How much is that? Is it 54%?
Evidence of meeting #109 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was system.
A video is available from Parliament.
Evidence of meeting #109 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was system.
A video is available from Parliament.
10:50 a.m.
Liberal
10:50 a.m.
President, Canadian Medical Association
I will ask Mr. Feeley if he knows the average of the—
10:50 a.m.
John Feeley Vice-President, Member Relevance, Canadian Medical Association
Yes. The average, I think, would be $339,000.
10:50 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
It is $339,000. The average income of a small business across Canada is $73,000, and here it is at $339,000.
10:50 a.m.
Vice-President, Member Relevance, Canadian Medical Association
That is gross income.
10:50 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Yes, the same with the $73,000.
What about employees? What is the average salary for an employed doctor?
10:50 a.m.
Vice-President, Member Relevance, Canadian Medical Association
The average salary for an employed doctor—I don't know.
10:50 a.m.
Vice-President, Member Relevance, Canadian Medical Association
I'm sure we could find out.
10:50 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Okay, it would be great if you could send that information.
I have a lot of doctor friends. I have a lot of lawyer friends, and a lot of the professionals at my age.... I practised law for a year before I was elected. They have strong feelings about these proposals because they are now getting to the point where they would benefit from them, or be taking advantage of these things. We're having a healthy debate among my own social circle on what type of country we want to live in and how important it is for a level playing field. So thank you for your testimony. We'll definitely take it into consideration to make sure there are no unintended consequences, because there is some validity to be said, especially.... Somebody gave an example of one spouse working while the other spouse attends medical school. That's an important contribution to society.
Moving on—
10:55 a.m.
Liberal
10:55 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you very much.
My question is for the witnesses from Meyers Norris Penny. The government is proposing to remove the refundable dividend tax on hand that currently ensures that small businesses don't pay double taxation on their passive income. When that's removed, double taxation will be instilled in the system. What will be the highest tax rates people will pay on their passive income held within a company?
10:55 a.m.
Partner, Peace Region Tax Leader, MNP LLP
When their income is flowed out, there will be, say, a 50% immediate tax at the corporate level.
10:55 a.m.
Partner, Peace Region Tax Leader, MNP LLP
When the dividends are taken out to the individual, that tax rate can be another 45% on the remaining $50. That being said, the tax rate effectively is up to 73% to 74% depending on the province.
10:55 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Okay, and will that tax rate apply on the shareholders of publicly traded companies or just on private companies?
10:55 a.m.
Partner, Peace Region Tax Leader, MNP LLP
Absolutely not. It will not apply to public companies at all. The public company on inactive income would be paying 27% tax. A foreign-owned company would be paying 27% tax.
10:55 a.m.
Partner, Peace Region Tax Leader, MNP LLP
A private company is going to be 50% and a REIT is zero.
10:55 a.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Right, okay. That's 50% on the private company plus the additional 45% on what's left.
10:55 a.m.
Partner, Peace Region Tax Leader, MNP LLP
Yes, so effectively, the public company ends up with a flow-through rate of just under 50%.
