Proposed federal tax changes have been cause for concern for small business owners across the country, including here in St. Albert and Sturgeon County.
The controversial overhaul is supposedly about tax 'fairness' and 'closing loopholes.' With the rhetoric from the Liberals one might think businesses across the country have been abusing the system and circumventing taxes for decades.
But let's call a spade a spade: This tax reform is nothing more than a tax hike. And it's one that is going to have an impact on many people.
St. Albert and District Chamber of Commerce recently held an information session at Cardiff Hall about the changes and St. Albert MP Michael Cooper will host a 'town hall meeting' at the St. Albert Inn & Suites on Thursday about the changes.
In addition to small business, the changes would have a great impact on farmers, affecting the profitability of family businesses. The government is accepting feedback on the changes until Oct. 2.
The changes include ending income splitting where a recipient is not active in the business, taxing passive income at the highest marginal rates and preventing a private corporation from converting income into capital gains.
Farmers and small businesses will be subject to a “reasonableness test" from the Canada Revenue Agency if they divert income to lower-earning family members.
Corporations putting aside current earnings for the future will be taxed on those earnings at the highest personal rates, making it difficult to put aside reserves.
It's also a bad message for the government to be sending to small businesses, which according to Innovation, Science and Economic Development Canada employ more than 70 per cent of Canadians in the private sector. These are people who are creating jobs at the local level and stimulating local economies. It seems the Liberals don't trust these people to pay their fair share, thus the need to 'close loopholes.' If anything, it is the government which shouldn't be trusted given the Liberal election promise to cut the small business tax rate to nine per cent which has not yet materialized. And why do the proposed changes not affect the trust funds and tax plans that benefit both the prime minister and finance minister, both of whom had the good fortune to be born into wealthy families?
Small business owners are not simply people looking to pay less on taxes, they take significant risks to incorporate and strike out on their own. When they succeed they create jobs for others. When they don’t they might lose their home. They often don't get the luxuries of sick days, maternity leave, paid vacations or pensions. This all rests on whether their business can generate the earnings to support them.
Perhaps if the government slowed its own spending, it might not need to come after small businesses. This is just another example of an elite Liberal leadership out of touch with the realities faced by the middle class it claims to support. If the object is tax fairness, then stop this piecemeal approach, provide sufficient time to review the entire system and make a true effort at consulting with Canadians.
