Small business essential to Canada’s future

It was just over a year since Prime Minister Justin Trudeau and Finance Minister Bill Morneau first launched their attack on local business to pay for their out-of-control spending. While mounting pressure eventually forced the federal government to back off from the most extreme parts of their proposal, the Liberals did implement tax increases and complicated compliance rules that will hurt many in our community.

The new tax rules restricting passive investments and family income-splitting will mean that an estimated $1 billion will leave the pockets of small business owners and into government revenues. Small business owners, tax professionals and even the Canada Revenue Agency are still struggling to understand how the new rules on family income-splitting will apply even though they have been in effect since the beginning of 2018. As a result, family-owned businesses will face more red tape trying to comply and some may face higher tax bills.

The Liberals also announced that they would be hiking Employment Insurance premiums by 3 per cent, and that there would be at least five years of Canada Pension Plan (CPP) increases. In reaction to the CPP increases alone, 69 per cent of small business owners say they will feel pressure to freeze or cut salaries, and 30 per cent say they will be forced to reduce investments in their business. The implementation of the carbon tax has also imposed huge costs on local business owners, especially those who are heavily reliant on utilities to run their operations.

In fact, nearly 200 businesses recently surveyed by the Canadian Federation of Independent Businesses in our communities opposed the tax changes, noting it would hurt them and their employees. It’s not just one area of our economy — all types of business say they are or will be hurt by the changes — from trucking to music, learning centres to ranchers, construction to restaurants. More than 90 per cent said they would be hurt by all the tax changes. The message is clear from our business owners: We are facing tougher times with the Liberals hiking taxes.

Small- and medium-sized businesses employ more than 10 million individuals, or more than 90 per cent of the total private labour force in Canada. But with at least five years of CPP increases, new carbon taxes, the federal tax changes on passive investment and income splitting rules taking effect, many business owners are left feeling as though they are being hit from all sides. These changes come at a time when our local businesses are facing a host of other challenges, including minimum wage hikes, shortages in skilled labour, and competition from other jurisdictions like the United States, where the federal government has significantly reduced the corporate tax burden.

Locally owned businesses grow our communities and create jobs. They are essential and should be supported, not given higher taxes and more red tape. Our Conservative team will continue to fight for lower taxes and push back against the Liberal attacks on local businesses every step of the way.

Glen Motz is Member of Parliament (CPC) for Medicine Hat-Cardston-Warner.