Chamber calls for petition
Fed’s tax plan faces opposition
The Saskatchewan Chamber of Commerce has waded into the debate surrounding the Federal Liberal government’s plan to reform certain taxes in a big way.
In an email sent out Thursday the chamber asked members and supporters to put their names to a petition opposing the plan currently being considered by parliament. The proposed legislation would close certain tax loopholes that incorporated business can use to reduce their overall tax bill.
CEO for the Moose Jaw and District Chamber of Commerce Rob Clark said the organization’s membership is concerned.
“A lot of people don’t understand what’s going,” he said.
Clark is hoping to sit down with the chamber’s accountant to figure out what any potential changes might mean for local businesses, and then educate businesses on the issue. Clark was also critical of the 75-day consultation period the government has proposed to hear potential feedback.
“I don’t think it’s a big enough window,” he said.
Clark added he doesn’t feel the proposed changes are fair to small businesses.
The Saskatchewan chamber’s call to action received support from Moose Jaw-Lake Center-Lanigan MP Tom Lukiwski.
“I am pleased to see the chamber becoming proactive,” Lukiwski said.
I think the government needs to go back to the drawing board. Tom Lukiwski
member who owns a business to transfer money earned by that business to another member of the family, who would likely pay a capital gains rate as opposed to that of earned income, which is higher. He added that ending this program would be especially unfair to farming families. “Everyone on a farm works,” he said. Besides farmers, Lukiwski said he has talked to many physicians who do not like the proposed changes.
“I’ve talked to doctors who are talking about leaving, either going down south or to Australia,” he said.
The MP said it is unfair to compare self-employed professionals or small business owners to people who are employed in job.
“Most professionals (and small business owners) don’t have access to the same benefits as people who are employed by an established company,” he said.
On the overall issue of taxes and specifically tax reform, Lukiwski thinks the whole system needs to be looked at and that rates need to be made more “flat.”
“Lower taxes are beneficial to us as Canadians,” he said.
New Democrat MP for Regina Lewvan Erin Weir has a very different take.
Weir agrees with Lukiwski that the consultation period needs to be expanded in order for people to voice any concerns they may have, but said the root of the current problem is that since the 1970’s there has been a rise in the number of people incorporating themselves, the only purpose being to lower their tax burden. “Tax avoidance is a problem,” he said. Weir agreed that it is important that family farms be protect and felt the proposed legislation does that.
“The government proposal stops sprinkling (to) people not involved directly in the business,” he said.
Weir also said the current loopholes allow for people to pay money to themselves from their private corporations via dividends, where the money is taxed at a lower rate compared to earned income.
In regards to the issue of physicians potentially leaving the country, Weir said he does not believe that will be an issue.
“Taxes are a small part of the picture when people are determining where they are going to live,” he said.
Weir added he would be open to talking about the levels that physicians are compensated at, but said special tax breaks are not a justifiable option. He also said these proposed changes will not affect a large number of people.
“Only a small minority of Canadians can incorporate,” he said.
According to Weir, the number of Canadians who are utilizing these loopholes is even smaller; 22,000 according to the Canada Revenue Agency.
“It’s a small fraction of a small Weir said. fraction,”