Rumour suggests feds will loosen tax reform
VANCOUVER — British Columbia’s finance minister is citing rumours the federal government intends to back off on elements of its proposed tax reforms that have drawn heavy criticism from small business owners across the country.
Speaking to the Greater Vancouver Board of Trade on Friday, Carole James said she would be surprised if the Canadian government did not make adjustments in light of the backlash since unveiling its tax plans over the summer.
“I believe you’ll see a shift. Certainly the rumour that is out there is that you’ll see some kind of shift coming forward,” James said during a question-and-answer session with members.
James later told reporters that she has no inside knowledge of upcoming changes.
“The rumours I’ve heard have mainly come from individuals who have said that the pressure that the federal government is getting around the lack of consultation on this issue means that they will have to make some kind of adjustments.”
James said more consultation is needed to avoid unintended consequences that could harm small business owners, whom she described as the backbone of the provincial economy.
The federal government announced plans to eliminate several tax incentives designed for private corporations, which Prime Minister Justin Trudeau has said unfairly encourages wealthy Canadians to incorporate to avoid paying their fair share.
Trudeau has so far resisted calls from doctors, farmers and small business owners to scrap or amend the reforms, but federal Finance Minister Bill Morneau has said he is open to making changes following a 75-day public consultation period that wraps up on Oct. 2.
Morneau said Friday ahead of a meeting with Nova Scotia Premier Stephen McNeil that he wants to clear up misinformation about how the proposal will affect business owners. “Our goal, of course, is a long-term, fair tax system that provides a basis for people to invest, to make our country successful,” he said.
Provincial pressure is intensifying against the Trudeau government’s controversial tax-reform proposals, which have angered business owners, doctors and farmers across Canada.
On Friday, provincial leaders representing different political stripes — Liberals, New Democrats and Conservatives — spoke out about tax reforms recommended by Ottawa’s Liberal government.
Manitoba Premier Brian Pallister, flanked by business owners and a farmer, held an afternoon event in Winnipeg where he aired his frustration over the federal tax proposals.
On the East Coast, Nova Scotia Premier Stephen McNeil expressed concern that the changes could hurt his province’s physician recruitment efforts and hamper the ability of small businesses to create financial cushions as protection during downturns.
The comments by the provincial leaders added to waves of complaints that have come from a range of sectors — as well as backbench Liberal MPs. Newfoundland and Labrador Premier Dwight Ball has also said he thinks the tax changes would hurt his province.
At issue are Ottawa’s plan to eliminate several tax incentives designed for private corporations.
Morneau and Prime Minister Justin Trudeau have argued that the tax system unfairly encourages wealthy Canadians to incorporate, so they can get a better tax rate than middle-income earners.
They say 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. But the federal explanations have yet to ease many concerns.
Friday marked the inaugural address by the NDP finance minister to members of the Vancouver Board of Trade. James also faced questions on the government’s opposition to large-scale energy projects, $10-a-day child care and how it intends to fund transportation infrastructure after eliminating tolls on two Lower Mainland bridges.
The only applause she drew outside of the start and end of her address came after she reaffirmed there would not be another referendum on transit funding.
James was asked about the government’s decision to send the Site C hydroelectric megaproject to the B.C. Utilities Commission for review.
“There is no reason not to ensure there is a good, strong business plan for Site C. That did not happen,” she said.
“Spending public dollars wisely should be a commitment that every politician has.”
Such reviews by the utility commission were standard practice before the previous Liberal government’s clean-energy laws allowed some projects to bypass the regulatory agency.
James also defended the government’s decision to include a per-vote subsidy in its campaign finance reform bill, a move Premier John Horgan had rejected during the May election campaign without first going to Elections B.C. and an independent committee for review.
Political finance was a central campaign issue and people expected quick action on it, James said.
“Our premier took a look at the evidence and made the decision when we came in that that was the way to move the bill ahead.”