Published On: Tuesday, 03 October 2017
Fed's Attack on Tax Planning Targets Small Businesses Only
- Kelly Darwin sits on the Board of Directors of the Esquimalt Chamber of Commerce and is owner of Seriously Creative.
ESQUIMALT - The recently proposed tax changes for consultation from the Federal Government will have a devastating impact on small businesses across Canada. The proposal is being considered to stop private corporation’s ability to use tax-planning strategies to gain unfair advantages, but it fails at going after the wealthiest Canadians, resulting in higher taxes and an increased administrative burden for small businesses.
Unfortunately for small business owners, the changes that the Department of Finance are proposing attack strategies that have a long history in Canada and don’t extend to publicly traded companies. The business community and tax professionals both agree that this proposal brings up numerous issues.
The planned proposal suggests that corporations are often formed solely for tax reasons, which is simply untrue. One example, among many, is that for many businesses, tax deferral on portfolio investments inside a corporation gives a huge advantage not only to the growth of a business but its survival in general.
The ability to do so has often saved businesses during times of economic decline. This taxation will also affect retired business owners that have planned their entire retirement off these funds, putting the retired business owner’s entire retirement plan essentially in the toilet.
These proposals put the future of small businesses at risk. Say goodbye to being able to do any successful planning in the future. Oh, but don’t worry, because of course owners are rewarded for selling their small businesses to larger corporations which could mean giving jobs away to foreign investors.
This isn’t just detrimental to business owners but the employees that need these jobs to provide for their families, pay for schooling, support themselves, or quite possibly all three. We must fight for the little guys.
The consequences of these harmful tax changes don’t end here. Are you a business owner or know a business owner? The Government of Canada’s “consultation” period closes October 2, 2017.
I encourage you to do your research about the proposed plan and express your concerns to the federal Finance Minister, Bill Morneau (firstname.lastname@example.org) and/or your own Member of Parliament. Let’s show our government that there is no place for greed in our country.