Evidence of meeting #124 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was important.
A video is available from Parliament.
3:45 p.m.
Conservative
3:45 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
We will continue to make investments on behalf of the long-term future of Canadians, and that's working.
3:45 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
You promised that in 2019 you'd have a balanced budget. Will you balance the budget in 2019?
3:45 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
We will continue to make investments that we see are appropriate to grow our economy. Happily, that's working. We will continue—
3:45 p.m.
Liberal
3:45 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
The minister doesn't know when the budget will be balanced.
Let's go on to his increases in taxes on small businesses. He said that small businesses will be allowed to have $50,000 in passive income before his new penalties kick in.
Is that $50,000 per shareholder, or $50,000 per company?
3:45 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
Perhaps I'll start by setting the record straight.
In fact, we're reducing taxes on small businesses by moving forward on reductions that will move small businesses from where they are at the federal taxation rate currently of 10.5%, to 9% in—
3:50 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
On the issue of the passive investment income, you've said that you're going to allow small businesses to earn $50,000 of passive income before new tax penalties take effect.
Is that $50,000 per shareholder or $50,000 per company?
3:50 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
Perhaps I can step back and conclude what I was saying, which is that we will be reducing the taxes on small businesses.
By January 1, 2019, the federal rate of tax on small businesses will be 9%. We'll do that at the same time as we assure that small businesses don't provide opportunities that are not intended to be there for growth but are—
3:50 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Fair enough, but you said that small businesses will be allowed to earn $50,000 in passive income before new tax measures will affect them. Is that $50,000 per shareholder or $50,000 per company?
3:50 p.m.
Liberal
The Chair Liberal Wayne Easter
Let's try not to interrupt each other. I'm watching the time. The minister's round can be around equal time to the question asked, so there's no need to interrupt each other.
Go ahead, Mr. Minister.
3:50 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
Sorry, I wanted to be clear.
The goal we've set out is an important one, we believe, which is to make sure that incorporating only for the opportunity to defer income is not our goal. Our goal is to ensure people invest actively in their businesses. As such, we've said there will be a limit to the amount of income that can be deferred within a private corporation. That amount will be approximately $1 billion in assets if you look at the $50,000 of investment income. That, we believe, will allow our system to enable people to invest, and at the same time not create advantages for those who are already quite successful.
3:50 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
The minister is running my clock. He can run his own clock during his opening statement. I've asked very short, pointed questions, seeking factual answers, and he's not answering them, so I'd ask for the ability to restate the question.
3:50 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you.
Is that $50,000 per shareholder or $50,000 per company?
3:50 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
As I said earlier, we think this is important. We believe that it's important to—
3:50 p.m.
Conservative
Pierre Poilievre Conservative Carleton, ON
Do you know the answer to the question?
If I could revert to your interview on CBC's The House, you were asked a similar question, and you said that those details have not been worked out, but it's not a detail, Minister. If a company has 10 shareholders, and that company is only allowed to have $50,000 in passive income, then that's actually $5,000 in passive income per person. I don't know on what planet one would have to live to think that $5,000 a year in passive income is enough for a business owner to pay for retirement or maternity leave or some other eventuality.
I'm just asking that you answer the question, because a lot of small business people desperately need answers, and you've been immersed in this matter now for 100 days. You should know, by now, what your policy is. Is your limit on passive investment going to be $50,000 per company or $50,000 per shareholder?
3:50 p.m.
Liberal
Bill Morneau Liberal Toronto Centre, ON
I think now I have a fair amount of time given the length of the diatribe.