Sure, and thank you for the question.
Yes, integration has been a long-standing core principle—and a good one, for that matter—for decades in Canada. It goes simply like this. From an investment perspective, people should be neutral as to where they place their investment dollars in a particular legal vehicle. In other words, if you invest your dollars individually, the tax results should ultimately be the same on the investment income you receive on that, including capital gains.
If you invest in a corporation, like a Canadian-controlled private corporation—a small business corporation, for example—and if you realize investment income, the ultimate corporate tax and the tax on the dividend should roughly be the same compared to the individual.
Now, with the $250,000 threshold, individuals get that annual 50% inclusion rate, but corporations, which are apparently evil, do not. They're taxed on a two-thirds inclusion rate right from the first dollar. That incentivizes investors—smaller investors, of course—to invest personally as opposed to corporately, and that can cause a lot of distortions.
For example, it might be better to invest in a corporation for a variety of reasons—to reinvest in a business, to creditor protect, etc., but now Canadians will be incentivized to invest personally.
I'm concerned about that. The complexity it adds to the tax system is tremendous.