On November 23, 2017, the PBO released its analysis estimating the potential fiscal magnitude of changes to passive income taxation based on Finance Canada’s July 18, 2017, consultation document.

The PBO’s analysis also factors in the October 18, 2017 Department of Finance press release suggesting an annual exemption from these rules up to $50,000 per year.

Notable findings from the analysis include:

  • The projected increases to annual federal revenues is expected to be up to:
    • $1 billion in the short term (1-2 years after implementation);
    • $3-4 billion over the medium term (5-10 years after implementation); and
    • $6 billion in the long term (20 years after implementation); and
  • Approximately 47,000 CCPC’s are expected to be affected.

A more detailed analysis of the PBO report will be posted to our blog in the coming weeks.

The full report is available at http://www.pbo-dpb.gc.ca/web/default/files/Documents/Reports/2017/Analysis%20Changes%20CPII/Taxation%20of%20CPII_EN.pdf.