Mr. Speaker, helping businesses grow is central to the Government of Canada's bold plan to create an economy in which all Canadians can have confidence in their future. However, when some people pay less than their fair share of taxes, it undermines that confidence. That is what we want to address, because an unfair tax system is a burden on all Canadians.
As part of our consultations on the proposals to address the tax planning strategies involving the use of private corporations, the government is taking steps to ensure that no one is paying any more or less than their fair share.
Canada has one of the lowest corporate tax rates in the world, with a combined average small business income tax rate of 14.4% across the federal, provincial, and territorial levels, or the lowest in the G7.
Our low corporate income tax rates leave businesses with a higher after-tax income, which supports business growth and job creation.
Since the release of the consultation paper, the government has received comments from business communities, tax advisers, commentators, farmers, and other Canadians. We are addressing the chief concerns that have been raised since the launch of the consultations and dispelling some of the myths regarding this important policy issue.
Let me be clear on a few points. The changes proposed will in no way restrict businesses from paying salaries to family members or others who are productively contributing to their businesses, nor will they restrict who is allowed to incorporate as a business. They are not targeted at certain groups or professions. Doctors and other professionals who are allowed to incorporate will continue to be able to do so, and to enjoy the many benefits that incorporation can offer. Changes relating to passive portfolio investing will have no impact on private corporation owners who reinvest their retained earnings into the business each year.
The problem we are addressing is that the current system is encouraging wealthy individuals to incorporate to pay less tax. These strategies are all completely legal, but that does not make them fair. We know that small businesses are the backbone of our economy. Our proposed changes will protect and maintain the ability of small businesses to succeed and create jobs while ensuring that the wealthiest pay their fair share.