Taxation of private corporations
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