Tax­a­tion of pri­vate cor­po­ra­tions

The McLeod River Post - - Viewpoint -

On July 18, the Min­is­ter of Fi­nance re­leased a white pa­per out­lin­ing the gov­ern­ment’s plan to tax pri­vate cor­po­ra­tions. Since that tax plan was re­leased, my of­fice has been re­ceiv­ing emails and phone calls from small­busi­ness own­ers, nurses, farm­ers, in­sur­ance bro­kers, and ac­coun­tants – all deeply con­cerned about the pro­posed changes. And they should be. For decades, tax plan­ning mea­sures for pri­vate cor­po­ra­tions have been rec­og­nized as le­git­i­mate by the gov­ern­ment, and for good rea­son. They help mit­i­gate per­sonal risk as­sumed when start­ing a small business.

The fact is that business own­ers must risk their own cap­i­tal, of­ten se­cur­ing bor­rowed funds against per­sonal as­sets, such as the fam­ily home. They do not have many ben­e­fits that are of­ten avail­able to em­ploy­ees, such as pen­sion plans and ex­tended health cov­er­age. Business own­ers of­ten es­tab­lish pen­sion plans and ben­e­fit pack­ages for their own em­ploy­ees, at their own ex­pense. They pay into CPP as both the owner and the em­ployee, while also con­tribut­ing the em­ployer’s share of CPP and EI for their other em­ploy­ees. These Cana­di­ans put in end­less hours of hard work and take on a lot of risk to make sure their busi­nesses are run­ning smoothly and their em­ploy­ees are paid.

Most lo­cal business own­ers are mid­dle class Cana­di­ans — the peo­ple who put their time, ef­fort, and sweat into pay­ing the bills and pay­ing their em­ploy­ees be­fore they pay them­selves. They’re not big multi­na­tional cor­po­ra­tions. Now the gov­ern­ment is tar­get­ing them with a mas­sive tax hike, threat­en­ing jobs and the com­mu­ni­ties that are sus­tained by our lo­cal busi­nesses. To bor­row from the Lib­eral Party plat­form: That’s sure “real change”, but not for a “stronger mid­dle class”.

The Lib­eral gov­ern­ment held a con­sul­ta­tion pe­riod over the sum­mer on the pro­posed changes. For many small busi­nesses, sum­mer is a very busy time and they are ques­tion­ing why the Lib­er­als chose this time for these con­sul­ta­tions. Such per­ma­nent changes should not be rushed. The gov­ern­ment should take an ad­e­quate amount of time to prop­erly an­a­lyze the im­pli­ca­tions of the pro­posed tax leg­is­la­tion.

The gov­ern­ment says that they are not go­ing after mid­dle-class business peo­ple. They say they are go­ing after the wealth­i­est Cana­di­ans. Does the gov­ern­ment re­al­ize that the pro­posed changes tar­get the very mid­dle-class business own­ers they claim to pro­tect? Why are small-business own­ers be­ing sin­gled out while the big­gest abusers of our tax sys­tem are be­ing ig­nored?

A tax pro­fes­sional from my rid­ing wrote in to me. She said, “If these changes go through they will end up hurt­ing not only small business, but our econ­omy as a whole.” She went on to say, “The Lib­er­als have it wrong, equal doesn’t al­ways mean fair. These changes will dras­ti­cally re­duce the in­cen­tives for peo­ple to start small busi­nesses and pro­vide jobs to oth­ers.”

How ridicu­lous it is that a farmer puts in years of labour and build­ing his farm, years of plan­ning for re­tire­ment, and years of sav­ing – and now the Fed­eral gov­ern­ment wants to tax him again?

Why does the gov­ern­ment in­sist on tak­ing more money from hard­work­ing Cana­di­ans? I have an an­swer to that one – to pay for the Lib­eral Gov­ern­ment’s spend­ing prob­lem.

Busi­nesses thrive on sta­bil­ity, and all they see from this gov­ern­ment is fis­cal un­cer­tainty. They worry for their em­ploy­ees and their fam­i­lies. What choices will they have to make? Will they have to let peo­ple go or just close up shop al­to­gether? These are all le­git­i­mate ques­tions my con­stituents are ask­ing, and ques­tions that the Lib­er­als still have to an­swer. This is why we should not cut the con­sul­ta­tions short. We need to lis­ten to Cana­di­ans and we need an­swers from this gov­ern­ment. The con­sul­ta­tion pe­riod needs to be ex­tended to en­sure lo­cal busi­nesses get the re­spect they de­serve.

Jim Eglin­ski, MP -- Yel­low­head

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