KENTVILLE, NS - Business owners in the Annapolis Valley remain concerned over how taxation changes being proposed by the federal government could impact their bottom line.
The Annapolis Valley Chamber of Commerce (AVCC) held a town hall meeting on the proposed business tax changes at the Kentville Lions Hall on Oct. 5. Deputy Opposition Whip John Brassard, Conservative MP for Barrie-Innsisfi, Ontario, was in attendance.
AVCC President Jeremy Lutz said business people heard from Brassard about the proposed changes to taxation. Many are concerned about their futures and what the changes will mean to their business.
“We have heard extensively from our members about this issue and along with the Atlantic Chamber of Commerce and the Canadian Chamber of Commerce, AVCC wants to ensure our members concerns are heard,” Lutz said.
He said the feeling among the group was that their risks were not taken into account. They have no paid vacation or sick leave and some said any money they can save is often used in a down time.
Lutz said that although the official consultation period is now over, business owners are encouraged to contact MP’s to express their concerns.
Liberal Finance Minister Bill Morneau announced intentions in July to close so-called loopholes that the government says allow business owners earning higher incomes to avoid paying higher tax rates.
The proposal looks to limit passive business income taxation; targets methodology for changing income into dividends or capital gains; and targets “income sprinkling”, which allows business owners to split income among family members whether or not they’re involved in the business.
A 75-day consultation period regarding the proposed changes was initiated. It concluded Oct. 2. Morneau has recently stated in the media that, following consultations, changes to the tax proposal will be needed.
Kings-Hants MP Scott Brison, President of the Treasury Board of Canada, said he’s been taking phone calls and meeting with concerned constituents to provide information regarding the proposed tax changes. These constituents include farmers, commodity groups, business people, accountants and other professionals.
He said all citizens have had an opportunity to participate in the consultation and to send in submissions. Brison said, “We are listening.”
“This is probably the broadest, deepest consultation on tax policy ever conducted in Canada,” Brison said. “We’ve had over 21,000 submissions.”
Brison said issues have been raised around succession of family farms and small businesses and the government is taking that very seriously. They want to ensure that farmers can leave their farms to their children without being disadvantaged and the same goes for small businesses.
“We also want to keep taxes low on small business. We have the lowest small business tax rate of any G8 country and we want to ensure that people can continue to save money in their business for future growth investments or to help them get through a downturn,” Brison said.
He said Morneau has been “very clear” that any changes to the tax treatment of passive investment will not be applied retroactively. For example, anybody who has accumulated capital in a CCPC (Canadian-Controlled Private Corporation) through passive investment under the current rules will not be affected. No future income derived from that capital would be affected.
Brison said the federal government continues to support the Lifetime Capital Gains Exemption of $1 million for farm property.
He said there is some misinformation out there about the proposed changes and in the coming weeks there will be more clarity. He looks forward to continuing to engage with constituents on the matter.
Brison said they want a tax system that is fair and works for all Canadians. Cutting taxes for the middle class was the first thing the Liberals did as a government.
Brison was unable to attend an earlier AVCC session focusing on the proposed tax changes, as it was held the week that the House of Commons resumed sitting. He was in Ottawa for part of that week and at the United Nations for the other part.