During the summer break, the Trudeau Liberal government quietly proposed changes to the tax code that would have dramatically impacted the commercial operations of small businesses right across Canada. The response from Canadians has been both definitive and overwhelming: these small business tax proposals are wrong for Canada and, if enacted without amendment, will hurt small businesses.
My offices in both Calgary and Ottawa have been overwhelmed by small business owners who are upset by these changes, and upset at the suggestion that they’re somehow using tax loopholes to avoid paying taxes.
I wanted to take this opportunity to update you on the status of these proposed changes, as well as to provide some clarification on recent announcements made by the Trudeau Liberals.
There are three areas where the government is attempting to change the small business tax code. The first is in the area of so called Income Sprinkling, the second centres on Capital Gains, and the third concerns Passive Investment Income. It is still unclear what parts of their proposed changes the government will not be enacting. I have attempted, however, to summarize what the government has announced and areas that still cause me concern. This summary can be found at http://www.ronliepertmp.ca/taxchanges
Given the opposition to his tax proposals for small businesses, Justin Trudeau and his Liberal government are scrambling to change the channel. Trudeau is even resurrecting a previously broken campaign promise to lower the small business tax rate to 9 per cent.
It’s important to remember that this promise was originally made by Stephen Harper in the 2015 federal budget. Justin Trudeau committed to reducing small business taxes during the 2015 federal election campaign, but he promptly went back on his word once his government was elected.
Trudeau is un-breaking a broken campaign promise now that it’s politically convenient to do so, and Canadians aren’t falling for it.
Beyond the punitive cost of their tax proposals, the real issue with Justin Trudeau and his Minister of Finance is their hypocrisy. On the one hand, they’re proposing to increase taxes on the small businesses they identify as using tax loopholes, while on the other hand they’re personally making use of complicated loopholes to manage their considerable family fortunes. In the case of Bill Morneau, it’s come to light that after being appointed Minister of Finance in 2015 he did not place his considerable financial holdings or his family fortune into a blind trust — despite holding a cabinet position that would require him to frequently introduce legislation impacting the financial sector.
Conservative Shadow Minister of Finance Pierre Poilievre, and the rest of the Conservative Caucus, have been hard at work opposing these changes and holding Justin Trudeau and his Minister of Finance Bill Morneau’s feet to the fire for their hypocrisy.
As this issue is constantly evolving, I will make every effort to provide you with updates as the government becomes more clear on its intentions. In the meantime I would like to share with you a video prepared by Mr. Pierre Poilievre.