Published On: Tuesday, 03 October 2017
Business Taxation Changes: If You Haven’t Acted Yet, Now Is the Time
WESTSHORE - The federal government is proposing the most significant business tax changes in 50 years. If you own an incorporated business or you plan to incorporate your business at some time in the future, you should be concerned. The message from the government has been that these are small changes to address loopholes in the tax system.
This is minimizing the issue in the extreme. While no one supports tax evasion, the proposed changes will have unintended negative consequences to business in Canada. Small business owners with tight margins will find themselves especially hard hit by this proposed legislation. It is no exaggeration to say these changes could hurt Canada’s economy given that approximately 80 per cent of Canadian businesses are small and medium sized enterprises.
I’ve heard some interesting rhetoric on the radio about how small business owners are wealthy and therefore the proposed tax changes are appropriate. Chambers work with small business every day.
I know I can speak for my colleagues across the province when I say that many small business owners are not wealthy, especially in the beginning when they take a risk to get that business going. Some do not succeed. The ones that do, who move beyond subsistence to success, get there as a result of hard work, long hours and thoughtful planning.
Through their business they pay their employees, invest in their company, and save for retirement. To quote the Canadian Chamber of Commerce, “[t]he government wants to tax ‘passive’ (invested) income. It says it’s a crackdown on ‘high income individuals,’ but the rules would apply to all incorporated businesses in Canada, most of whom are restaurants, retailers, farmers and consultants—to punish them for saving and investing.”
“Consultants” includes doctors whose family practices are often incorporated small businesses. Having spoken to a prominent physician recently, the proposed changes mean that for many new doctors, working in a hospital would be preferable to setting up a private practice. Given the severe shortage of family physicians on the south of the Island, this is another huge concern.
Find out about this issue by contacting your local Chamber of Commerce, or go to www.chamber.ca where the Canadian Chamber of Commerce has information available on its home page.
Then write to your local MP and/or Finance Minister Bill Morneau (firstname.lastname@example.org), explaining how these changes would negatively impact on your business.