Morneau draws criticism

Businesses, premier express concerns, reservations in Nova Scotia

Finance Minister Bill Morneau took his “listening tour” over Ottawa’s controversial tax proposals to Halifax on Friday, drawing criticism from some small business owners and concerns from Nova Scotia’s Liberal premier.

Morneau met with local small business owners at a library in downtown Halifax, and said afterwards he heard concerns about the changes, but also an understanding that a system is needed that is fair for all Canadians.

He met later with Nova Scotia Premier Stephen McNeil, who told reporters Friday that he was concerned about the impact the tax changes could have on health care recruitment in a province already dealing with a family doctor shortage.

“I’ve raised the issues that I’ve heard from Nova Scotians and I’ve raised my concerns that I have with them as well around the impact I believe it will have on our province,” McNeil said at the Nova Scotia legislature.

“The opposition is clearly wrong in looking at this solely as a financial one for the province.

“There’s a much greater risk in my view - looking at what will this do around health care recruitment, doctors and health care providers.”

Morneau’s proposal has drawn complaints from doctors, lawyers, tax planners and other small business owners who have used incorporation to reduce their income tax burden.

But Morneau said the changes are meant to end tax advantages that some wealthy business owners have unfairly exploited and to ensure all Canadians have a level playing field.

McNeil said the status quo allows doctors to plan for their retirement and is also an important tool for small-business owners that allows them to reinvest in their businesses or to weather a change in the economy.

“It’s an important tool that entrepreneurs need to have to be able to do that, otherwise there’s only one other avenue for them: to go try to find leverage somewhere else from a lending institution and we believe the mechanism in place has worked well for the province,” said McNeil.

Doctors Nova Scotia, the association that represents all physicians in the province, said they are “absolutely concerned” about the changes and a meeting is being held in Halifax on Saturday with about 300 doctors to discuss the issue.

Kevin Chapman, the association’s director of partnerships and finance, said the province gave doctors the right to incorporate in the mid-1990s as a way of retaining and recruiting physicians “at a time they were leaving the province in fairly significant numbers.”