Troy Shantz
The Trudeau government’s proposed tax reforms will hurt more than the “fat cats,” it will weaken the backbone of the Canadian economy, local business owners say.
“The assumption is that if you own a business you’ve got lots of money, you’re fine, ” said Linda Sparks, co-owner of All Seasons Trophies and Signs.
“Well, not all business owners are created equal.”
Sparks was one of several who spoke out against the proposed tax reforms at a forum hosted by the Chamber of Commerce last week.
Federal Finance Minister Bill Morneau has said the government is moving to tighten corporate tax laws by eliminating incentives that allow small business owners to shift income to family members in a lower tax bracket.
The proposed changes would also tax passive investments at the same rate as those outside a small business, and limit how a corporation can convert income into capital gains.
But small business owners from the retail, farming and medical sectors said they need such breaks because they don’t have the same access to pensions as private employees.
The tax changes, as proposed, will force many to rethink their retirement plans, Sparks said.
“We’ve tried to be responsible investors and the rug is getting pulled out.”
The president and CEO of the Chamber called the proposals the most radical corporate tax change in the past 50 years.
“Owning a business does not guarantee wealth,” said Shirley DaSilva, noting two-thirds of Canadian small business owners make less than $73,000 annually and about half of those make less than $33,000 per year.
Yet the owners take on all the responsibility for their venture’s success, said Sparks, who purchased her business with her husband a decade ago.
“Being a small business owner is a huge risk, and there needs to be structures in place to help offset this risk or no one would do it,” she said.
The federal tax changes threaten an already uncertain investment climate in Ontario, the local owners say. Businesses are already grappling with soaring hydro bills and a rising minimum wage - which the government’s own accountability office says could cost the province 50,000 jobs.
Carolyn Luciani, a principal at Manley’s Basics in Point Edward, said the federal tax plan removes incentives for current and future entrepreneurs.
“It just leaves less money for the business owners at the end of the day,” she said.
“I would be better off to go get a government job and have guaranteed everything.”