Canada: Recommendations for tax measures | KPMG | GLOBAL

Canada: Recommendations for tax measures, federal budget

Canada: Recommendations for tax measures

The House of Commons Standing Committee on Finance released its recommendations for measures that could be included in the federal budget on 22 March 2016.


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The recommendations are contained in the committee’s report on its pre-budget consultations, issued 11 March 2016.


One of the recommendations concerns the tax treatment of Canadian controlled private corporations (CCPCs). The Liberal party’s election platform indicated that a Liberal government would consider changes to “…ensure that CCPC status is not used to reduce personal income tax obligations for high income earners rather than supporting small business.” However, the committee recommended that the federal government not make any changes to the current federal taxation regime and other rules as they apply to small businesses, including professional businesses, incorporated as CCPCs. 

The report does not include any specific recommendations related to the stock option deduction, capital gains inclusion rate or international tax.

KPMG observation

The committee usually tables a pre-budget report each year with recommendations for budget measures developed through its pre-budget consultation process. Although this year’s consultation was significantly shorter than the committee’s normal pre-budget process because of the 2015 federal election, the report is 117 pages and includes 56 recommendations for inclusion in the federal budget. 

Based on previous experience with majority governments, the recommendations in these reports often form the basis for the government's budget proposals—if not in the current year’s budget, then in a later year. However, these recommendations do not necessarily supersede the elected party’s platform and mandates. The budget may also include other measures not mentioned in the report.


Read a March 2016 report [PDF 58 KB] prepared by the KPMG member firm in Canada: Finance Committee Issues Last-Minute Pre-2016 Federal Budget Recommendations 

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