Morneau reveals tax treatment on small business income

When Ottawa reworked the rules on passive investment income inside private corporations, a lot of business owners wanted to know how much it would actually cost them. This piece covers those revised rules in plain language. The headline is that a corporation can earn a certain amount of passive investment income each year and still keep the full small-business tax rate, but once income climbs past that threshold, access to that lower rate starts getting clawed back. The column walks through how passive income is measured and uses examples to show where a business crosses into trouble, which is more useful than the political back-and-forth around the change. It's aimed squarely at incorporated business owners and their advisors, who need to understand how investments held inside the company affect the rate the operating side of the business pays on its profits.