Mr. Speaker, if the hon. member had listened to my introduction, he would know that I mentioned that the Minister of Finance worked with the Conflict of Interest and Ethics Commissioner and that he will continue to do so in order to be fully compliant with all her recommendations at all times, as he has done from the start by working transparently.
As I said in the introduction, the Conflict of Interest and Ethics Commissioner did a thorough review of the minister's file before he took office, and the minister followed her recommendations. We believe that the Conflict of Interest and Ethics Commissioner always acts in a perfectly honest and independent manner, and we respect her independence.
I would like to speak more specifically to the good work that the Minister of Finance does for Canadians.
Strengthening the CPP will increase the maximum benefit by about 50% over time, giving retired Canadians a more dignified retirement.
Now we are moving on to the next step in our plan to grow the economy and achieve better tax fairness for middle-class Canadians and those working hard to achieve the middle class.
We will be the first to point to small business as being one of the reasons the economy is growing the fastest in the G7.
Our government is committed to ensuring that businesses can prosper in Canada. In keeping with that commitment, I am pleased to inform the hon. members in the Chamber that the Prime Minister announced the government's intention to lower the small business tax rate in 2019, while presenting proposals intended to fix a tax system that is inherently unfair for the middle class.
The government intends to lower the small business tax rate to 10% as of January 1, 2018, and then to 9% as of January 1, 2019. These tax cuts are in recognition of the importance of small businesses to the lives of Canadians and of their contribution to the Canadian economy. Small businesses are a key driver of the Canadian economy. They represent 98% of all businesses and are responsible for over 70% of all private sector jobs.
Low corporate tax rates are meant to promote capital investment in business and growth in Canada. These investments, whether they are for the acquisition of more efficient equipment or technology or for the hiring of additional personnel, make companies more productive and competitive.
These investments also stimulate economic growth and help create jobs and raise wages. However, as the government lowers taxes for small businesses, it must ensure that Canada's low corporate tax rates support businesses rather than give unfair and objectionable advantages to a small number of wealthier and higher-income individuals, who use private corporations as a tax planning tool. That was not the intent of the measure.
Our current tax system encourages the wealthy to incorporate so that they obtain a tax advantage. This means that, in some cases, a person who earns hundreds of thousands of dollars a year may benefit from a lower tax rate than a middle-class worker who earns much less. That is not fair, and our government intends to remedy that situation.
This week, the government is introducing the approach it intends to take to better target tax strategies used by a relatively small number of high-income individuals, who benefit the most from existing tax rules. To do so, we are relying on the feedback Canadians provided during our recent consultations on tax planning using private corporations. We have heard from Canadians from coast to coast to coast. We are a government that believes that consulting with Canadians and members of Parliament is a good thing and that it helps us to strike the right balance.
In the coming weeks and months, our government will announce the next steps in its plan to resolve the issue of tax planning using private corporations, a plan that reflects the comments we heard during our consultation period.
With every one of the changes the government makes, it will do the following: support small businesses and their contributions to Canada's communities and our economy; keep taxes low for small businesses and support owners to actively invest in their growth, create jobs, strengthen entrepreneurship, and grow our economy; avoid creating unnecessary red tape for small business owners, who work hard, as we know; recognize the importance of maintaining family farms and work with Canadians to ensure we do not affect the transfer of a family farm to the next generation; conduct a gender-based analysis on finalized proposals to ensure that any changes to our tax system promote gender equity.
As the Prime Minister confirmed at his announcement yesterday, the government is introducing a new proposal designed to limit the ability of a small number of owners of high-income private corporations to reduce the personal tax they have to pay by sprinkling their income to family members. However, the government intends to simplify its proposal on income sprinkling to guarantee that the changes we are proposing do not add any unnecessary red tape. We must emphasize that the vast majority of private corporations will not be impacted by the proposed income-sprinkling measures. In fact, we estimate that only 50,000 family-owned private businesses are sprinkling their income. This is a small fraction, around 3%, of Canadian-controlled private corporations.
We are making changes in order to eliminate the tax advantages that only wealthier individuals with access to the services of accountants can enjoy. We have listened to small business owners, professionals, farmers and fishers, and we are going to act on what we have heard in order to avoid unexpected or undesirable consequences.
This simplified proposal addresses the concerns we heard during the consultations. We heard that our initial proposal was too complicated and caused uncertainty among family members.
We also heard the concerns of family businesses, especially those involved in agriculture or the fishery, about our proposals to limit the lifetime capital gains exemption. In light of the feedback we received from Canadians, we will not for the moment implement any measures that would limit eligibility for this lifetime exemption. We will also continue to carefully examine all the comments that the government has received.
In addition to the middle-class tax cut and the Canada child benefit I mentioned earlier, I would like to highlight some of the government's other key achievements to help support middle-class Canadians.
For example, over the last two years the government prioritized the movement of people and goods by making historic investments in our infrastructure. The government made long-term investments in our infrastructure because it believes it to be crucial to the future of our country and our economy. That is why, in our first budget, we committed $11.9 billion over five years to support public transit, green infrastructure, and social infrastructure.
Also, in the 2016 fall economic statement, we announced a further $81.2 billion that will go towards critical infrastructure over a period of 11 years. These funds will support public transit, green infrastructure, social infrastructure, transportation that supports trade, Canada’s rural and northern communities, and its smart cities. These are investments that improve the way Canadians live, commute and work.
These public transit investments will help Canadians benefit from a faster commute, reduced air pollution, more access to well-paid jobs, and stronger economic growth. These investments reflect Canadians' commitment to one another and to future generations.
We will have even more work to do going forward. Part of the work will involve making changes to create a fairer tax system for the benefit of all Canadians, one where hard-working small business owners are rewarded for their efforts, and big businesses are able to grow, create jobs, and contribute to our country's growth.
Our announcement yesterday means greater support for small and medium-sized businesses. In these times of economic growth, Canadians need to share the fruit of that growth, and they deserve it.