Treasury faces parliamentary grills over taxation on sale of family business


Ottawa-Parliamentary legal experts say they stepped into an unknown territory when the Liberal government decided to postpone the enactment of tax law amendments on the sale of small businesses between families.

A conservative legislative bill passed in late June rewrote part of the Income Tax Act, allowing employers to transfer the company to children and relatives at the same tax rate as selling it to strangers.

Parliamentary lawyer Philip Duflesne told the House of Commons Finance Commission today that the bill was officially enacted when it was approved by the King.

At the time, the Treasury Department said the bill would be submitted by the government to clarify that the changes would apply from January 1, 2022, as the bill did not have an effective date.

Dufresne states that it was an amazing move, not seen in modern history.

Hours before today’s committee meeting, Treasury Minister Chrystia Freeland reversed his position, but the government made its own amendment to close a loophole that would help people avoid paying taxes. He added that he was planning.