On June 13, 2016, the Organisation for Economic Co-operation and
Development (OECD) released its Economic Survey of Canada. There were some
interesting comments and criticisms about Canada's overall
economy. However, as it relates to small business taxation, the
following quote should be noteworthy for Canadian private client
tax advisors:
Small business dynamism and
productivity would also benefit from focusing small business
programmes more clearly on reducing market failures. The programme
with the largest budget cost, the preferential tax rate for
companies under a threshold size based on taxable capital (known as
the Small Business Deduction [SBD]), is not so focused. The aim of
this arrangement is to leave them with more money to invest,
effectively making it a financing programme. However, the economic
literature on capital market failures does not establish a case for
subsidising SMEs based on their size alone – such market
failures can result in too much or
