The principle travels: control of cash flows beats a minority claim on them. What does not travel unexamined is where the paper sits, because in Canada that has a measurable price.

A CCPC’s small business deduction is ground down by $5 for every $1 of adjusted aggregate investment income above $50,000, and is eliminated entirely at $150,000 of AAII. AAII counts interest, portfolio dividends, net rents, royalties and the taxable half of realised capital gains. Separately, letting passive assets pile up inside the operating company can break QSBC status and cost the lifetime capital gains exemption on an eventual sale — $1.25m, indexed from 2026, so confirm the current year’s figure rather than quoting the one you remember.

Two things worth knowing before anyone quotes a number at you: the capital gains inclusion rate is still 50% — the proposed move to two-thirds was deferred and then cancelled on 21 March 2025 — and Ontario does not mirror the federal grind in the same way, so the federal arithmetic is not the whole answer in your province.

FIRST STEP THIS WEEK — pull the last two T2 returns and compute adjusted aggregate investment income for the most recent year. If it is anywhere near $50,000, that is a conversation to have with the accountant before year-end, not in the spring.