You may be aware that whenever McDonald’s has a new product, they test it out in a smaller market to see how it does.
The CRA does this on occasion with Quebec. The province has their own separate tax authority, so they’re able to try out their own things. Normally, the two systems are very similar, but once in a while, the Quebec government rolls out a new rule and the CRA waits to see the reaction before implementing it nationwide.
The CRA looks to Quebec as a pilot project – and if Quebecers don’t complain about a change, on a few occasions the CRA has said ‘we like those programs, we’re going to try it!’
Case in point: a change in tax regulations affecting small businesses in Quebec. For those who have a corporation or were thinking about incorporating to save taxes, this would eliminate that benefit.
Basically, in order to help small businesses grow, the government has traditionally taxed them at lower rates than large businesses, but with the change, a one to three person operation would be taxed at the same levels as Bell Canada.
One exception is those companies in the primary or manufacturing sector, so interestingly enough, those who produce maple syrup won’t see their taxes go up. Small business owners in the rest of Canada should hope that Quebec business owners don’t take this sitting down, otherwise the CRA could end up imposing the tax version of the Mc D.L.T. nationwide.
If you have any questions about how this could affect you and your business, please get in touch. Click here for more about the changes in Quebec.
The Globe also has a great article on this topic here.
Ian Edmonds is a CPA, CA and CPA (NC) working in Toronto with small and medium-sized businesses, individuals, and not-for-profit organizations in Canada and the US to provide personalized, approachable tax and accounting advice and services and help people avoid expensive tax situations. Contact us now to set up an appointment.