Proposed tax changes by Liberals an attack on entrepreneurs

I think the summer sun has left Finance Minister Bill Morneau with a touch of heat stroke. The man has clearly lost his ability to reason. Why else would the person responsible for advancing the economy choose to hamstring its very engine of growth?

Morneau’s proposed tax changes (floated in late July) attempt to remove specific tax incentives related to small business incorporation. He suggests these incentives allow business owners an unfair advantage over salaried workers, and claims his proposed changes create tax fairness.

In fact, these changes undermine the very middle class the Liberals claim to want to support. Tax incentives provided to small businesses do exactly what they should — encourage more people to become entrepreneurs.

In Calgary, where I live, 90 per cent of business is so-called small business. Their ranks include countless tradespeople, local farmers, store operators, general contractors and a host of professionals. Small businesses are the engine of the Canadian economy. Small business owners also represent a wide, diverse and robust entrepreneurial class into which more Canadians should be welcomed.

But if these tax change go through, far fewer Canadians will seek to join the ranks of the entrepreneurial class. And that shameful — and highly illogical — outcome would be at odds with a public that is increasingly embracing entrepreneurship, and the stated Liberal goal of supporting the middle class.

When I first started out in business, my father would routinely ask when I was going to get an actual job. He was of the generation that had more faith in traditional workplaces over the uncertain prospect of entrepreneurship. That was back in the early 1980s. A lot has changed.

Today, Canadians are having a love affair with entrepreneurship. Never has it been more widely embraced or respected. Canada has created more entrepreneurs than any country in the world, except the United States. Television shows that celebrate entrepreneurship — like CBC’s Dragons’ Den — have only grown in popularity.

University campuses are crammed with young people from every area of study wanting to learn more about starting their own businesses. Even children are catching the bug. And let’s not leave out Baby Boomers, who are choosing entrepreneurship over retirement.

This percolating spirit of entrepreneurship is wildly encouraging. Entrepreneurship isn’t just a major economic driver, it’s also an important route out of poverty for many. Over the past four decades, entrepreneurship has helped lift billions out of poverty worldwide. If we want to lift more of Canada’s lowerincome earners into the middle class, entrepreneurship is the way to do it.

Entrepreneurs aren’t asking for a guaranteed income, paid vacation, health benefits, sick days, employment insurance, or (ahem) cushy pensions, as our public sector enjoys. They are looking to the federal government to make it fair and equitable for them to succeed at what they do.

It’s one thing to start a business, and another thing to make it grow. It takes more than passion and drive to succeed. It takes financial fundamentals.

Tax incentives provide those fundamentals. Without them, Canada’s entrepreneurial class is doomed.

If the Liberals want to build up the middle class, let’s give Canadians more reasons to incorporate, not fewer. Let’s give them more incentives to create new businesses, retain their earnings, grow and hire (and generate more revenue for government coffers in the process). Let’s create a middle class of tax-incentivized entrepreneurs rather than hamstring the very people who have the best hope of making our economy bulletproof.

Morneau’s tax proposals will sap job growth, innovation and productivity at precisely the time we need them most. If he really wants to build up the middle class, Morneau should find ways to empower the entrepreneurial class, rather than gut it.

This is not about gated communities protecting themselves and their wallets — this is about real people running real businesses, employing real people paying real taxes. As we move into fall, let’s hope that cooler heads will prevail. Let’s get real.