In July of this year Federal Minister of Finance, Bill Morneau, released a package of proposed tax reforms aimed at small businesses. In the months since the announcement, my office has been inundated with letters, emails, and phone calls from medical specialists, farmers, accountants, and countless other incorporated professionals who are concerned these changes will dramatically affect their long-term commercial viability, their personal ability to save for retirement, and the overall competitiveness of the Canadian marketplace.
As someone who has owned a small business in the past, I am very concerned these tax reforms, if implemented, could have serious implications for the many entrepreneurs in the Signal Hill riding. Small businesses and private corporations are at the foundation of our economy, and those who would choose to start a business deserve credit for the risks that come with being a small business owner. The three important tax measures the government is proposing to eliminate or reduce are:
- Keeping investment income inside a small business to take advantage of a lower tax rate;
- Conversion of a corporation’s regular income into capital gains; and,
- Ending income sprinkling whereby owners of private corporations pay family members in a lower tax bracket to shield such dividends from being taxed.
In profitable business years, the tax strategies being targeted allow small business owners to put money into their savings, or toward their retirement, and generally offset some of the risks associated with owning their own business. In difficult economic periods, which Alberta has endured for the last few years, small businesses often have to draw on such resources to make payroll and keep their doors open. The current system also recognizes that, in many cases, the family members of small business owners are impacted by the risk of owning a small business.
These proposed changes could remove three important pillars that Calgary-based small business owners rely on to save for their future and to provide all the benefits that normal employees enjoy, such as vacation pay, medical benefits, maternity leave, and retirement savings.
I am staunchly opposed to these changes and continue to apply pressure in the House of Commons, in Parliamentary Committees, in the media, and in our riding.
If you feel strongly about these proposed changes take a moment and make your voice heard – email the Finance Minister at firstname.lastname@example.org and Prime Minister Trudeau at Justin.email@example.com.