Finley says Liberal plan is a money-grab
Haldimand-Norfolk MP Diane Finley, centre, played host to a business round-table at the Erie Beach Hotel in Port Dover Monday. The forum concerned proposed changes to the federal tax code and their potential impact on small business. Among those sitting in were engineer Keith Seguin and his wife Lara of Haldimand County. MONTE SONNENBERG / SIMCOE REFORMER
Local MP Diane Finley received so many calls and emails this summer over proposed changes to the federal tax code that she decided to call a business round-table in Port Dover this week.
Farmers and business owners from Norfolk and Haldimand were invited to the Erie Beach Hotel Monday to take in a power-point presentation, ask questions, and provide input about the proposed changes.
Finley’s purpose was to inform and gather feedback she can share with the government in Ottawa upon her return.
The Trudeau government has thrown the floor open to suggestions now that is has tabled its proposals.
At Monday’s round-table, Finley said there is a great deal of fear and confusion as to how the pending reforms will affect small business owners and other self-employed individuals who have incorporated for tax purposes.
The Trudeau government says the exercise is about making the federal tax system fair for all concerned. However, others smell a money-grab from a government that kicked off its mandate by tripling its deficit projections.
“The Liberals have proposed more spending and they need some way to finance it,” Finley said. “Some analyses project they will reap an additional $3 billion from this.
“They should find some other way other than from farmers and small businesses. You can’t create an economy by taxing the life out of the job creators.”
For his part, Finance Minister Bill Morneau says the proposed reforms are about closing “loopholes” that give business owners and self-employed professionals tax advantages not available to the general public.
Proposed changes would make it more difficult for self-incorporated individuals to reduce their taxes by “sprinkling” income on family members who may or may not make an actual contribution to a given enterprise.
Morneau has also taken aim at income that is retained within a corporation as “a passive investment.”
Corporate tax rates are lower than income tax rates, in part, to encourage investment and job creation. The Trudeau government has concluded that some self-incorporated individuals use this provision to unfairly build their net worth.
Ottawa also wants to change rules that allow accountants to convert income within a self-incorporated entity into capital gains, which are taxed at a lower rate.
“Too many people still feel as though the system is stacked against them,” Morneau says in an open letter on the proposed changes.
“They work hard. When it comes to paying their taxes, they pay on time and in full. But there is a sense that some may be getting a better deal than others. It’s time for the next steps in our plan to bolster the confidence Canadians have in their government and their economy. And it starts by making sure that we all pay our fair share of taxes with no exceptions.”
Because the tax reforms are in the proposal stage, “uncertainty” was the good word at Monday’s event.
Jim McGimpsey, executive director of the Simcoe Business Improvement Area, attended as a means of educating himself about what’s in store. McGimpsey doesn’t know what shape the final reforms will take but he suspects it will impact his membership.
Simcoe realtor Bill Culver has the same take. He too is trying to wrap his mind around the proposed changes and how it might affect his business going forward.
“We’re trying to get information on what is happening here,” Culver said. “We know this is not good news. We don’t think this is just going to affect the one-percenters. We wonder if this is going to go to the heart of small business.
“Everybody wants to pay their fair share but you don’t want to give it all away.”