Middle market reform a central tax theme in Federal Budget 2022

TORONTO, ON – (April 8, 2022) – RSM Canada, the leading provider of audit, tax and consulting services focused on the middle market, issued key perspectives for Canada’s middle market businesses following the tabling of today’s federal budget.

As part of its highly anticipated budget unveiling, the Government of Canada laid out key changes that, among other things, should allow more businesses – especially medium-sized businesses – to benefit from the small business deduction. This provides a preferential corporate tax rate of nine per cent rather than 15 per cent on up to $500,000 of active business income.

“Buoyed by a surge in commodity prices, the federal government finds itself with billions more than it expected in its coffers and a greater determination to exhibit fiscal discipline,” explains Maria Severino, national tax leader at RSM Canada.

“Yet the budget also continues a theme from last year: attempting to correct perceived inequalities in the tax system. Last year, the government introduced a tax on vacant property owned by non-Canadian non-residents, a luxury tax on big-ticket items and a digital services tax. In this year’s budget, the government expects to procure more than $25 billion in additional tax revenue by enhancing anti-avoidance legislation, continuing with international tax reform, imposing an additional tax on financial institutions and life insurers, and eliminating other perceived tax loopholes.”

For more information about the Federal Budget’s implications for Canada’s middle market, read our 2022 Canada Budget: Detailed commentary and follow RSM Canada on LinkedIn.