Announced Proposed Changes to Canada’s Tax System Targets Small Business Owners
August 25, 2017
Starting a small business is not easy and the Liberal government’s proposed changes to Canada’s tax system is making it harder for small businesses to continue operating. When small businesses are successful they benefit the broader community by growing the economy and creating jobs. Increasing the tax burden on these job-creators will decrease the incentives for individuals to take important risks and rob people of their livelihood.
On July 18th the Trudeau Liberals announced proposed changes to Canada’s tax system that target small business owners – farmers, restaurant owners, retail and convenience store owners, as well as important service providers such as accountants and doctors.
Canada already has one of the highest effective tax rates on business investment in the G7. Business owners already pay tax twice: first when their business earns money from sales and then again when they withdraw money from the company for their personal use. Two years ago, when the Liberals took office they increased the tax rate on investment income by over 17%.
The Liberals are hoping to have legislation passed as early as October. If passed, small businesses, farmers and their employees will suffer as a result. This could make it more difficult for Canadians to find a family doctor, increase the costs of local produce at the grocery store, discourage young Canadians from starting their own businesses, and make Canadian businesses uncompetitive. This may result in many small businesses making hard decisions resulting in layoffs, fewer working hours, and reduced health insurance and other employee benefits. It will also make it more expensive, if not impossible, for parents to pass on family businesses or farms to their children due to these proposed tax changes.
Justin Trudeau says a “significant portion” of small businesses serve as a screen for wealthy Canadians who want to avoid paying taxes and that is “unfair.” Does he really understand business and the economy go hand-in-hand?
Small business owners do not have job security, employment benefits, employer sponsored pension plans, employment insurance, sick days or vacation days. As a result entrepreneurs rely on their ability to save from their earnings to retire. These proposed changes will also be retroactive without the ability for taxpayers to plan ahead.
Justin Trudeau is out of touch with the plight of farmers, professionals, small business owners and their employees—a demographic that makes up nearly 97% of Canadian businesses and approximately 70% of Canada’s workforce.
Our Conservative Party believe taxes should be lower for all Canadians: for businesses, families, and individuals. This is a core part of our Conservative vision of prosperity and opportunity for all Canadians.