Our family lives, farms and does business in south-central Manitoba. Like many who live in rural Canada, we strongly believe in supporting local businesses and professionals in our communities. Why? Not only because they are our neighbours, but because they support us.
They provide jobs for those who need off-farm income, for students and many others in our small towns. The service they give often goes above and beyond, because they know us so well. Local businesses and professionals support sports teams, school music programs, local fund-raising projects and refugee families; provide scholarships and bursaries to graduates; donate to community and hospital foundations and numerous charities. When a fellow citizen is in need they step up to the plate to help in whatever way they can. As with farmers, giving back is not done because it is expected but because it fills needs, builds a stronger community and many will say, “Because it is the right thing to do.”
Will your government step in to fill the void when their contributions are no longer possible because of your proposed 73% crippling tax rate, and an inability, or desire, to take on the risk of owning a business? Your government committed to providing new opportunities for small business to grow. Please explain how that will be accomplished with your “Tax Planning Using Private Corporations”?
In Canada, 85% of businesses are small to mid-size, and of those, 55% are incorporated. Many do so for the same reasons as our family farm – succession planning, building a retirement, paying down debt and saving to grow our business. We are not using loopholes. We are following the existing set tax structure and rules. In order to survive, and have lending institutions provide us with financing, we must make a profit, which in turn fuels the local economy. We cannot succeed on a perpetual and ever-growing deficit.
Operating a business, making that decision to be your own boss and employ others, requires significant financial investment, time commitment, grit and determination. Like farmers, self-employed entrepreneurs have no employee benefits (employment insurance, retirement plans, sick or vacation pay, vacation pay, maternity/paternity leave etc). Their businesses too, are often passed on from generation to generation. Others may mentor employees, who are interested in taking over the reins, to ensure that business stays in the community.
But if your proposal goes through, why would anyone want to take the risk? It would be simpler and more advantageous to be a wage-earning employee. But who will provide employment? How does this new tax structure encourage the next generation of innovators and entrepreneurs to stay in Canada? And who will be left to support our communities?
Minister Morneau, with your proposed tax changes, I am not only concerned for the viability and future for our family farm, but also for that of the business owners and professionals in my community. We are not the wealthy 1%. We are the hard-working, dedicated, middle-class — the very ones your government claims to be ‘protecting’. But double taxation, changes to capital gains, income splitting, passive income and estate taxes (up to 90%) will dramatically increase our overall tax burden. We are not against taxation, but believe it should be reasonable and the tax dollars you collect from us spent responsibly.
The changes you are proposing are the most sweeping to business taxes in 50 years, yet you are only allowing a brief 75 day consultation period, which ends October 2nd.
Chambers of commerce and agriculture organizations, along with a host of individuals across the country are requesting an extension. Why not let them have a voice at the table? Clarify what the changes entail. If we are misinformed, and our certified profession accountants and their firms are misinterpreting the intent of your reform, why not extend the deadline? Let’s have a broader, thoughtful discussion with everyone concerned. Closely examine at the short and long-term implications for individuals, families, businesses, professionals, their communities and our country.