Liberal attack on small business just their latest tax grab

September 12, 2017

Many of you have asked for details on the proposed elimination of certain tax measures by the Liberal Government and Finance Minister Bill Morneau.

Many average Canadians have used incorporation as a management tool for decades. However, Justin Trudeau, who has lived off a family trust, put a bullseye on small companies in the 2015 election when he said that they were just a way for Canadians to avoid paying taxes. Since then, it has been clear that the Liberals are deliberately targeting small companies in order to try to deal with their own out of control deficit spending.

This is a very serious issue which will affect all Canadians. It is frustrating that in his latest pronouncements about these changes, Justin Trudeau has either deliberately lied to Canadians or he does not even understand his own proposal.

I am very concerned because the Liberals’ proposed tax changes regarding small companies will:

  • Make it harder for Canadians to recruit and find family doctors and consequently will increase wait times;
  • Make life harder for Canadian farm families and make it more expensive for Canadians to buy food;
  • Discourage young Canadian entrepreneurs from starting their own businesses;
  • Make Canadian businesses uncompetitive and drive away foreign investors; and
  • Result in layoffs, fewer working hours, and reduced health insurance and other benefits.

In addition to these impacts, we know that previous Liberal tax hikes (higher small business tax rates, increased payroll taxes and a new carbon tax) are making it increasingly difficult for entrepreneurs to maintain and grow their businesses. Now, the Liberals have suggested major changes to family corporations. Those changes will include:

  • Restricting or eliminating the opportunity to share income inside private corporations, which can reduce income taxes by allowing income that would otherwise be realized by a high-income individual facing a higher personal income tax rate to instead be realized by family members who are subject to lower personal tax rates or who may not be taxable at all. The reality is that our farms and local businesses are family ventures. Everyone chips in. The teenage daughter does shifts at the cash register. The son might run daily errands. The spouse might do the bookkeeping. They all share ownership in the company’s success. For Liberals to characterize them as tax-cheats is insulting.
  • The new Trudeau taxes will mean a 73% tax on investments income by small businesses and farmers. Big publicly-traded multinationals with billionaire CEOs will not pay a penny more.
  • Preventing business owners from “converting a private corporation’s regular income into capital gains.”

The core of the Conservative vision is to create prosperity and opportunity through lower taxes for businesses, families and individuals. Our government created a low tax, competitive business environment to drive investment and create hundreds of thousands of private sector jobs.

The Liberals are reversing those tax cuts and this latest attack on small companies is just another Liberal tax grab designed to make Canadians pay for the government’s out-of-control spending habits and legacy of deficits.

I need you to send your concerns to the Hon. Bill Morneau, Minister of Finance at: Bill.Morneau@canada.ca and to contact Justin Trudeau at PM@pm.gc.ca and Ralph Goodale, MP at Ralph.Goodale@parl.gc.ca.

Please let Trudeau know that these changes are unacceptable by participating in the government’s 75-day public consultation which ends on October 2nd: http://www.fin.gc.ca/activty/consult/tppc-pfsp-eng.asp.