Mr. Speaker, I am pleased to be here in the House waiting for my turn to speak.
I thank my friend, the hon. member for New Westminster—Burnaby for giving me the opportunity to talk about what our government is doing to ensure that our tax system is fair to all Canadians. We were elected on a promise to strengthen the economy and support the middle class and those working hard to join it. An important part of that promise is to ensure that our tax system is fair.
Therefore, on the one hand, the government has made intelligent investments to grow the economy and, on the other hand, it is ensuring that all Canadians benefit from these investments. I did say all Canadians and not just the wealthy. To that end we cut taxes for nearly 9 million middle-class Canadians and we created the Canada child benefit, which gives more money than before to nine out of 10 families with children. This money can be used to purchase school supplies or sports equipment, for example.
That is also why we are cutting the small business tax rate. As of January 1, it is 10%. On January 1, 2019, in less than 11 months, it will be lowered to 9%. The combined tax rate for small business will continue to be the lowest by far of all G7 countries.
We have helped small business create jobs. When entrepreneurs grow their business, they find new markets and create well-paid jobs, and that benefits Canada. However, when the system is used by fortunate individuals who incorporate to take advantage of unfair tax breaks, that is detrimental to Canada. We must take action and standardize the rules. That is why, in budget 2017, we announced that we would be looking into this issue.
Last summer, we held consultations and we met with Canadians across the country. My colleague, the Minister of Finance, will have more to say about that in budget 2018, but I can reassure my colleague opposite that tax fairness for the middle class remains one of our government's top priorities.
Over the past few months, we have heard from business owners, professionals, and experts on how to improve our proposals. We listened to what Canadians had to say and are acting on their suggestions. As a result, the government announced that it will no longer implement some of its initial proposals because they would prevent people from transferring their businesses or family farms to the next generation.
We have also clarified the rules on income sprinkling, which allows high-income business owners to greatly lower their personal income taxes by shifting income to family members with little or no income. We want to better regulate this practice. However, we are going to make sure that we do not penalize family members of business owners who make a meaningful contribution to the business. There are now very clear criteria in place. Adults who are 18 and who work in the business at least 20 hours a week on average will not be affected by the changes. Adults aged 24 and over who own at least 10% of a service-based business will also not be affected.
The same goes for the spouse of a business owner, as long as the owner has made a significant contribution to the business and is 65 years of age or older.
Last fall, the government also reaffirmed its commitment to take steps to limit tax deferral opportunities related to passive investments. We already said that a detailed proposal would be included in the 2018 budget.
The government remains determined to improve the integrity of the Canadian tax system. By taking action to prevent tax evasion and close tax loopholes, we are contributing to fiscal sustainability.
The government’s priorities consist of looking out for the well-being of Canadians, growing the economy, creating jobs, strengthening the middle class, and helping the women and men working hard to join it. To do that, maintaining the integrity of the tax system is vitally important. Everyone needs to do their part, and ensuring that remains a goal of our government. I am convinced that the hon. member will agree that this is vital and essential.
In closing, I firmly believe that my colleague across the way will support this government’s efforts.