ARTICLE · 01 MARCH 2018

Budget 2018: A Targeted Approach

Torkin Manes LLP

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On February 27, 2018, the Federal Minister of Finance, Bill Morneau, tabled the current Liberal government's third budget.

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On February 27, 2018, the Federal Minister of Finance, Bill Morneau, tabled the current Liberal government's third budget. Following the proposals announced last year, there was much anticipation (and concern) that Budget 2018 would introduce additional sweeping tax changes. As expected, Budget 2018 proposed new tax rules applicable to passive investments held by private corporations. However, in the end, the changes in the latest budget proposals (the "Proposals") were much more targeted and measured than some had feared.

Here are some of the highlights.

Passive Investment Income in a Private Corporation

On July 18, 2017, the government released a consultation paper in which it proposed to restrict the tax-deferral advantage currently available to private corporations that reinvest after-tax profits in passive investments. In October 2017, the government announced that the proposals would be targeted at private corporations with annual passive

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