Proposed Tax Changes
September 28, 2017
Those writing have made it very clear that they are not the wealthy 1%, but mostly middle-class Canadians who have taken risks to start their own businesses and create their own jobs in the community. Many have laid bare the dire consequences these changes will have for their business and their families. These small business owners warn that they will have to reduce staff, which will raise unemployment at a time when we cannot afford to lose more jobs in Alberta. Others have spoken of their need to consider cutting back on their community support and charitable donations just to keep their business profitable.
It has not been lost on Canadians that the Liberal government chose the middle of the summer to conduct their consultations in an effort to pull a fast one on Canadians. It is clear that the Liberal government did not really want to hear from Canadians and remains determined to proceed with the changes no matter what. The Liberals’ indignant attitude is both reckless and offensive to taxpayers.
A constituent, Joseph Klassen, wrote, “I am a small business owner. I employ 12 people and the annual payroll for this staff runs about $1.25 million. This may appear small to others, but I feel we employ these people giving them a reasonable living while making a positive contribution to the Canadian economy. Once you remove the incentive of being able to earn a reasonable financial return on my total business investment, I will have to consider the possibility of closing this business.”
Dr. Peter Samuels wrote to me and said, “The government’s proposed tax changes for private corporations will make it more difficult for physicians to provide the quality of care that their patients deserve. These proposed changes will harm patients, physicians and their families. Small business owners and their many employees will be harmed. Communities and the Canadian economy will suffer. I encourage the Finance Minister in the strongest terms not to implement the proposed tax changes for private corporations.”
Brian, a constituent of mine, said, “I am a small business owner in Alberta, and have been since 2010. Last year my personal income was less than $50,000. I have had to lay off 23 people due to the downturn in the economy, and the relentless increase in taxes directly affecting my company. Over the past 6 months, we have finally seen a bottom to the Alberta economy, yet with the backdrop of all the tax increases, I have little interest in increasing our staffing at this time.”
Finally, a constituent, Linda Goode, wrote, “I voted Liberal in the last election. At a conceptual level, I support much of the liberal platform. However, I struggle with some of the tactics for achieving that platform. More specifically I am appalled by the proposed tax changes that will directly impact my partner and I as small business owners and as members of the middle class. My partner and I are both 63 years old. We have ‘lived like students’ for decades. We have sacrificed a great deal so that we could be financially independent in retirement and not be a burden on society. ‘Changing the rules’ on retained earnings, directly and dramatically impacts our financial security. At our age we have run out of time in terms of our earning capacity to offset the impacts of the proposed tax changes. The government’s attempt to create greater fairness certainly has missed the mark for us.”
I could go on. I have hundreds of letters like these, but like those who wrote to me, I do not think the Liberal government is listening anyway.
Madam Speaker, I am pleased to have the opportunity to speak about the government’s proposals concerning tax strategies involving private corporations. As members know, we are currently conducting consultations on proposals to address tax benefits for private corporations.
The government has asked stakeholders from across the country to provide their comments. It listened to what they had to say. The government found many of these comments to be helpful as they helped it better understand the impacts of its proposals. I can assure my colleague that we will report on what we heard and that, together, we will make decisions that will result in a fairer tax system.
It is important that we highlight some of the facts. To begin with, we are not increasing the small business tax rate. Canadian small businesses will continue to benefit from the lowest small business tax in the G7. Our proposals will have no impact on business’s ability to save or invest for business. Our proposals will not affect individuals’ ability to incorporate their businesses, nor will they prevent business owners from employing family members. It is also important to know that middle-class Canadians and small businesses are not the focus of our proposed changes.
We recognize that there are business owners and professionals who have saved and planned for their retirement under the existing rules. On this matter, I want to reassure everyone that our proposed changes to passive income taxation would only apply on a go-forward basis, not to existing savings, nor to investment income from those savings.
We will not introduce any measures that compromise this extraordinary advantage. That way, our businesses will continue to create jobs and to invest in their community. After all, Canada’s corporate tax rates are among the most competitive in the world. For example, its small business tax rate is the lowest of all the G7 countries.
Madam Speaker, I appreciate the time my colleague took to respond to my comments, but none of what she says provides any comfort or assurances to me or to my community. The government’s reckless spending has created a fiscal hole that will hurt Canadians today and in the future. The previous Conservative government was able to balance the budget under the current rules. The current Liberal government, addicted to spending, is desperately grabbing more tax dollars from every Canadian.
These changes threaten the very services our communities need. We are risking losing people in some of the professions we need most: the doctors, the farmers, and others.
If changes to our tax system are warranted, then let us make sure we make them after fully considering the problem, our options, and the effects any proposed solutions would have. The consequences of rushing into these changes are too high. Canada cannot afford to destroy those who build our communities, create jobs, and take risks where others will not.
Madam Speaker, we will carefully consider all the decisions we make. They will be guided by our main objective, which is to ensure fairness for the middle class and all those working hard to join it. We want to strike a balance, give everyone the chance to succeed, and put an end to certain injustices. That way, Canadians will be convinced that they have a fair tax system.
A fair tax system is pivotal in making sure our economy is really working for everyone, especially the middle class, and I am confident we are going to get this right.