CTF to keep close eye on feds’ revised tax reform announcement today

VANCOUVER (NEWS 1130) – Finance Minister Bill Morneau will meet with colleagues today in Ottawa, where it’s believed the feds will announce changes to the controversial small business tax reform.

Kris Sims, BC director with the Canadian Taxpayers Federation, says the proposed tax changes may have been intended to target the rich, but actually hurts small business owners who try to save money within their businesses to compensate for a lack of medical benefits or vacation pay.

“These folks aren’t salaried,” she says. “These are the pioneers of our business and our workforce. They’re on their own ticket. They need to save their own money.”

Critics of the plan range from farmers who say they can’t pass their business onto their children to business owners who can’t set aside money to pay for medical expenses. Even Liberal backbenchers are upset.

Sims says the Finance Ministry made a big mistake in going after people who are incorporated, hitting everyone from hairdressers to dentists in their attempt to go after the rich.

“The problem here is that rich people like the Finance Minister Bill Morneau and the Prime Minister Justin Trudeau aren’t the ones they’re targeting; they’re going after the average middle-class family.”

Sims says her group has seen an unprecedented number of concerned business owners approach them and thinks Morneau has heard some of these complaints. She adds people do “income sprinkling” to help their adult children go through school or to afford a home.

She expects Morneau will water down the changes so that it won’t affect as many business owners.

“He’s a smart guy. I bet he backs down and waters this down and makes it more nimble [so it] doesn’t hit as many people as he was counting on.”

Lindsay Meredith with SFU’s Beedie School of Business agrees that Morneau will probably back down on some of his proposed changes.

He adds the Canada Revenue Agency put Morneau in a rough spot when it admitted it would cost too much to prosecute anyone who keeps their money offshore, yet wants to go after small business owners.

“He’s doing a sensible strategy here: Don’t try to rescue this one, it’s just going from bad to worse.”

Morneau’s plan intended to target Canada’s super-rich, but critics say it actually prevents small business owners from saving money and prohibits farmers from passing on their business to their children.

Meredith calls small business Canada’s “sacred cow.”

“Remember, the bulk of employment in the country is ascribed to small business, not big-business — those guys outsource. Small business creates the jobs. It would be a pretty dumb strategy to start pounding small business.”

Top Stories

Top Stories

Most Watched Today