2016 Federal Budget: Impact On Professionals

Professionals that are regulated by a governing professional body—such as physicians, dentists, veterinarians, lawyers, accountants, engineers and architects—often choose to operate through professional corporations (PCs). In the weeks prior to the 2016 federal budget, there was some concern that the new Liberal government would amend the definition of the types of companies that qualify for the small business tax rate,¹ with the concern being that a PC would no longer qualify for the small business deduction (SBD).²

The measures in the 2016 federal budget did not go this far. However, the budget did propose significant changes to address concerns about partnership and corporate structures that have been implemented to increase or multiply access to the SBD.