Stories collected about tax concerns
The Strait Area Chamber of Commerce is collecting stories from members about how they believe proposed federal tax changes will affect them.
The federal Liberal government is coming under mounting pressure from some groups over the proposed changes, including the curtailment of “income sprinkling,” a method by which business owners shift a portion of income to family members, either through salary or dividends. Another proposal would curb “passive investment income,” which the government has described as the investment of money left in a corporation, for purposes other than to invest directly in growth.
Amanda Mombourquette, executive director of the Strait chamber, said members have raised the issue during recent meetings with chamber officials. They also had a meeting with Cape Breton-Canso MP Rodger Cuzner.
“We had a really frank discussion about the potential impact to small business in the new proposed legislation and how we think it’s going to harm small business and he was good to meet with us, for one, and number two, he did commit to bringing it back to his caucus meetings,” Mombourquette said.
In a mailing to its members, the chamber has asked that they respond with their thoughts via email to amanda@ straitareachamber.ca or by directly contacting MPs.
The stories will be shared with the national body, Mombourquette added, “to get a collective national voice going.
“We need to hear what is the impact to you,” Mombourquette said.
She noted she recently received a letter from a small business owner who started his business a bit over a year ago. He launched the venture after working in a government job for about two decades, Mombourquette said.
“He wanted to use his expertise to start a business that would be a family business, he took that risk … he’s providing work for his eldest son, I know that his spouse supports the business as well, he’s taken quite a bit of risk in terms of his family’s income,” she said. “He doesn’t get vacation pay … he doesn’t get a lot of things that salaried employees are entitled to in this province.”
The changes would mean he would not being able to make use of income sprinkling or invest retained earnings back into the business without being taxed at a higher level, Mombourquette said.
“Now he’s facing a great deal of uncertainty that he never anticipated,” she said. He’s an example. He’s not rich, he’s never been rich. He lives a pretty modest life here in Cape Breton.”
Mombourquette was also due to take part in a roundtable meeting on the issue with another group of business owners from the Strait area.
The federal Liberals say the changes are to close tax loopholes, with Finance Minister Bill Morneau arguing most business owners won’t be affected by the changes if they come into effect.
“We had a really frank discussion about the potential impact to small business in the new proposed legislation and how we think it’s going to harm small business …”