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Restaurants Canada Welcomes Corrections on Small Business Tax Change Proposals

Restaurants Canada Welcomes Corrections on Small Business Tax Change Proposals

Ottawa, ON, Oct. 17, 2017 (GLOBE NEWSWIRE) -- The federal government announced that it will cut the small business tax rate from 10.5% to 9% by January 1, 2019. This has been a historical demand from Restaurants Canada and was a key item in the governing party's electoral platform in 2015. Restaurants Canada is satisfied that, under pressure from the business community in general, and from members of our industry in particular, it will now become reality.

The federal government also announced adjustments to some tax change proposals that were put forward months ago. Though not yet to our full satisfaction, they will provide relief to small and medium size foodservice establishments that have been hit hard in the last few years.

?We are encouraged by the announcement by the federal government,? said Shanna Munro, President and CEO of Restaurants Canada. ?They clearly heard some of the complaints and recommendations made by Restaurants Canada members. What was proposed in mid-July was clearly unacceptable and we are pleased it is moving in a better direction.?

Removing lifetime capital gain exemption (LCGE) restrictions is especially appreciated by the restaurant industry, as it directly affects retirement plans that were thought out in good faith by law-abiding Canadian entrepreneurs. This was one of the recommendations in the submission Restaurants Canada presented on October 2.

?Modifications to the passive income provisions and details on what could be a realistic reasonableness test on income sprinkling are still required,? said Munro. ?Government needs to be aware of the pitfalls of such a tax grab on precarious small businesses. However, we are encouraged by some of the provisions proposed.?

Restaurants Canada is still concerned that proposed tax changes will affect retirement tax planning by restaurateurs, and that it would result in prohibitive tax rates. Restaurants Canada also awaits details on in-family business transfers and hope the government will hold its promise not to adversely affect those important transactions. As government unveils more details about its new tax policy, the restaurant industry looks forward to be consulted on any further proposed changes.

Restaurants Canada holds its annual ?Day on the Hill? in Ottawa on Sept. 17 and will be speaking to Members of Parliament on this issue. Though encouraged by new changes presented on Monday, there are still areas of concern that need to be addressed.

Restaurants Canada is a growing community of 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant industry. Canada's restaurant industry directly employs 1.2 million Canadians and serves 18 million customers every day.


A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/71158199-3e98-4a89-a530-7c9afdc00cf7

Lisa Michaels
Restaurants Canada
[email protected]

David Lefebvre
Restaurants Canada
[email protected]

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