The Editor,
As a small business owner in Port Moody (Rocky Point Ice Cream and Rocky Point Kayak), I am deeply concerned with the flawed income tax proposals that will harm many local businesses like my own as well as my family’s future.
The climate for successful small business in Canada has never been as challenging as it is in 2017. As a private, incorporated business owner, I face numerous obstacles on a daily basis — none more challenging than from our own federal government and its proposed tax reform measures released by the Department of Finance on July 18.
The tax changes as they are proposed today are extreme and punitive to those that are driving B.C.’s economy. Why is the government doing this? The minister says it’s about “fairness,” and his consultation document compares the tax treatment of a business owner to that of an employee to point out corporations have “unfair” advantages.
Really? This makes no sense. There are good public policies for reasons owners are taxed differently. Are employees investing their own money to get their business off the ground? Are employees risking their personal assets (homes, cars) as collateral for a loan? Do they face the myriad obstacles we face on a daily basis all while not guaranteeing that we will even earn a penny while keeping the business afloat?
Small business owners expose ourselves and our families to financial risk; invest and re-invest our time and capital in our businesses; innovate and add value to the Canadian economy; and pay taxes and supplement CPP and EI contributions for our employees. Many businesses, including ours, also contribute greatly to our communities through involvement and charitable giving because it is important to give back for the greater good.
The three tax measures proposed by the government will greatly interfere with our businesses’ ability to operate, achieve these goals and provide the societal contributions that benefit all Canadians. In virtually every advanced economy, businesses can accumulate and invest after-tax retained earnings so they have money to get them through an economic downturn —or a bad summer, in our case — to make big capital investments and to save for retirement (something we couldn’t do in our first 15 years of business because we didn’t make any money beyond the living expenses required to support our family).
While I certainly believe in tax fairness, I do not support what the finance minister is proposing and the uncertainty and harm that will result. The changes being contemplated go against the notion of tax fairness. In essence, the changes being contemplated will single out privately held business owners — many of whom are middle-class income earners — treating them worse than publicly held and foreign-controlled businesses. And for what? Finance Canada expects to raise $250 million (less than 1% of the federal deficit) by cracking down on “high income earners.” But these rules would apply to all incorporated companies, most of which are small businesses, including our local restaurants, tradespeople, farms and home-based consultants. To pull in that $250 million, CRA will have to tax more than $1 billion in salaries and audit hundreds of thousands of businesses.
The consultation period is far too short, and precludes the consideration of alternatives to the proposed changes that are fair to small businesses.
I urge our local businesses to write our government to set aside the current proposals and hold more meaningful consultation. This would allow us to properly consider tax changes that will ultimately impact the backbone of the Canadian economy.
Jamie Cuthbert, Port Moody
