The first Liberal budget has removed a loophole used by Canadian-controlled private corporations to pay lower taxes on investment income, reports Business in Vancouver.
However, UBC economics professor Kevin Milligan said the budget didn’t address the practice of designating spouses as shareholders, which allows them to receive funds they didn’t generate.
“Doctors and dentists will make their spouse a shareholder, you can pay them dividends of $40,000 a year before you pay taxes on it,” said Milligan. “There’s an estimate that it costs the government $500 million a year.”
