Several business owners from a wide range of sectors, including retail, farming, and medicine, gathered on Tuesday for a Sarnia Lambton Chamber of Commerce-hosted event that highlighted the impact proposed changes by the Federal Government would have, not only on their economic livelihood but the entire nation.
The picture being painted is not a pretty one.
Debra Taylor, a CPA who outlined the various changes that were put forward on July 18, said she objects to comments made by Finance Minister Bill Morneau that the proposed moves are intended to close loopholes.
“The reason we have corporations set up by people in business is to limit personal liability,” she told the gathering of business people at Manley’s Basics in Point Edward.
“If these changes are implemented, the incentive to take risk—which is at the heart of our economy—will be gone.”
Taylor said the government, if it truly wanted to be fair in making any changes, would have allowed a reasonable period of time for the transition and grandfathered existing businesses. “The 75 day consultation period is too short,” said Taylor. “There should be an extended period of consultation and feedback.”
But Taylor also made it clear that adding complexity to the tax burden is not the best way forward, pointing to a current tax code book that is substantially bigger than ever before.
“It’s not sustainable.”
But people like Carolyn Luciani, who with her sister Lisa Hewton owns Manley’s, says she is making far less than what the Federal Government suggests and that others might believe. “Financially, I’d be better off with a government job that offered vacations and benefits. None of that is the case when you own your own business.”
And she too objects to characterizations that the government is concerned about loopholes.
“These are not loopholes,” said Luciani. “They are reasonable provisions that offer stability and predictability for our business.”
Karen Sanders, who along with her husband Steve own Wild Hog Farms in Watford, said the proposed moves by the government will decimate the family farm.
Referring to two of her children who have expressed an intent to continue the operation, which employs seven people outside the family, she said her children would have to pay triple the tax than if their parents sold the operation to an unrelated business.
Al Langford, also a farmer who works other jobs outside his family’s cash crop operation and who is president of the Lambton Federation of Agriculture, said there is a real risk that his generation will be the last to farm the 750 acres that have been in the family for 107 years.
“We’re struggling,” he said.
The changes being proposed will have a huge impact on his community and he and others intend to spread the word about those impacts.
They plan to gather on Tuesday, September 26 at the Brooke-Alvinston Arena for a meeting to draw attention to the issues being raised.
“We’re on the edge,” said Langford. “We can’t allow it to happen. We have to stand up to it. Our whole lives are in this.”
Dr. Sean Peterson is a family doctor who also practices emergency medicine and runs a clinical research company in Sarnia. He’s also, with a partner, expanding his office building to create a team-based practice that would attract new doctors who want to work in that atmosphere.
But, Peterson, who is also a director of the Ontario Medical Association, said he’s concerned that the changes being proposed will make it harder to attract doctors who see the U.S. as being a potentially better place to practice.
And Peterson objects strongly to comments by Prime Minister Trudeau that a doctor pays less tax than a nurse in the same room.
“I can tell you, the only time that would ever happen is if the doctor is on maternity leave and isn’t receiving employment insurance payments,” he said.
According to Chamber research, two-thirds of Canadian small business owners make less than $73,000 a year, and half of those make less than $33,000 a year.
The Chamber of Commerce has a detailed guide to the proposed corporate tax changes on its website. The document can be seen HERE.
A website sponsored by the Canadian Chamber of Commerce (www.protectgrowth.ca) outlines some of the issues. It states:
“Canadian small businesses represent almost 97% of all businesses in the country and employ nearly 70% of all Canadians working in the private sector. Encouraging the growth of small business is critical to creating jobs and supporting the economy.
“The Government says it’s all about “fairness,” but there are good reasons why owners are taxed differently than employees. Because unlike an employee, a business owner doesn’t get a pension or health benefits or vacation pay. She invested her own money to get the business started. Or, she pledged her personal assets (house, car) as collateral for a loan. She has employees who depend on her. And, if nobody wants her goods or services next month, she does not earn a penny.”