The federal Liberal government says it will lower the small business tax rate to 10 per cent in January and to nine per cent in 2019, the start of a week-long effort to stanch the bleeding from a self-inflicted political wound.
Prime Minister Justin Trudeau is making the announcement as his government faces widespread criticism for a package of controversial tax-reform proposals.
Trudeau campaigned in 2015 on a promise to reduce the small business tax rate to nine per cent from 11 per cent over three years but he announced in Budget 2016 he would freeze the rate at 10.5 per cent, cancelling a legislated reduction to nine per cent instituted by the previous Conservative government.
Faced with a vocal opposition to the tax changes, the Liberal government is now reviving the nine per cent promise. According to Liberal MPs, who were briefed at a closed-door caucus meeting early Monday morning, the reduction will be phased in over two years.