The Liberal government moved to tighten the tax rules for small businesses in Tuesday's federal budget, which reflected some fine-tuning to the changes that prompted an uproar last year.
However, Finance Minister Bill Morneau still faces the challenge of corporate tax cuts in the U.S. that have prompted fears north of the border that companies will choose to invest stateside instead of in Canada.
In the budget, Morneau opted to hold the line on corporate taxes in Canada, opting to help in other ways such as with spending to grow women-led businesses, innovation and diversification of trade.
The minister faced a backlash over his initial plans to change small business taxes last year before backing down on some of the proposals and reviving a promise to reduce the small business tax rate.
In the budget this year, Ottawa moved to eliminate the small business deduction for businesses that earned more than $150,000 in passive income starting in tax years that begin in 2019.
It also moved to limit the advantages that some businesses can obtain when they pay certain dividends.