The federal Budget tabled on June 6, 2011 included no changes to the income tax measures originally announced in the Budget on March 22, 2011.
The Budget announced that the government will be reviewing the existing rules for Employees Profit Sharing Plans (“EPSPs”) to determine whether amendments are required to ensure that these plans are used for their intended purpose. The Budget cites the use of these plans by employers in recent years to direct profit participation to family members or to avoid Canada Pension Plan contributions and Employment Insurance premiums on employee compensation as examples of unintended purposes. It should be noted that such Plans are also used by some taxpayers to avoid income tax withholdings. The Budget states that the government will undertake consultations with stakeholders before proceeding with any proposals.