The Edmonton Chamber of Commerce has joined small businesses across the country in their vocal opposition to the federal government’s tax proposals.
The Chamber of Commerce has asked the Edmonton business community to speak up and protest against the tax reforms.
“The message from our members has been clear: the federal government should be focused on making it easier for small businesses to succeed, not more difficult,” Edmonton Chamber of Commerce CEO Janet Riopel said.
The Liberals have introduced tax reforms that would, among other things, limit the practice of “income sprinkling,” which involves paying income to family members, even if they don’t work for the business, so that business owners can avoid paying higher taxes.
Another reform relates to “passive income,” or money that’s been saved by a business in banks, stocks or other investments. The Liberals’ reforms include an additional tax on this income when it’s paid out as dividends.
The owner of Doddcor Ltd., an Edmonton-based consulting company, is already speaking out about the potential tax changes.
Lindsay Dodd has 25 employees and has owned his business for six years in Edmonton. He said the proposed changes will harm businesses like his.
“As a small business owner, I risked my savings and future earnings to start my consulting firm,” Dodd said.
“The majority of small business owners like me fund their growth by reinvesting their after-tax income back into their companies. Growth in good jobs and the overall economy is largely fueled by entrepreneurs growing their small businesses.”
An Angus Reid Institute poll, which gathered results from 850 small business owners and over 1,000 non-business owners, didn’t find many entrepreneurs willing to say that the tax reforms would have positive impacts.
But 42 per cent of respondents said the changes would be negative, while 43 per cent said they wouldn’t have any impact at all.
A majority of small business owners (63 per cent) said the changes to income sprinkling would not affect them, while 24 per cent said the change would be negative.
Forty-two per cent of them said that the changes to passive income would bring negative impacts, compared to 43 per cent who said it wouldn’t have any impacts at all.
The Ministry of Finance and some of Canada’s most prominent economists are portraying this as a move that will increase fairness in the country’s tax code, preventing high-earners from using sophisticated accounting techniques to dramatically slash their tax bill.
The Canadian Medical Association (CMA) predicts the changes will “destabilize health-care delivery.” The Canadian Federation of Independent Business (CFIB) said they will hurt many small business owners with middling incomes and discourage Canadians from starting new companies or growing existing ones.