The Federal Government notes that Employee Profit Sharing Plans ("EPSPs") are an effective way for business owners to align the interests of their employees with those of the business, but says they are increasingly being used by some business owners to direct profits to family members in order to reduce or defer taxes and to avoid paying Canada Pension Plan contributions and Employment Insurance premiums.

The Federal Government says that it will review the existing tax rules for EPSPs to see if technical improvements are required and will undertake consultations to obtain the views of stakeholders before proceeding with any changes.