Fredericton Chamber of Commerce CEO Krista Ross says Finance Minister Bill Morneau’s proposal to impose a $50,000 passive income threshold is a “step in the right direction”, but said business owners want more details on how the federal government will roll out any of their newly proposed changes to the initial tax reform proposal.
“Our initial reaction is that they’ve made a couple adjustments that I think are probably favourable, but overall, I think the business community is looking for a more simplified solution,” Ross said.
“We have been watching very closely, and early this week they mentioned that they’re not going ahead with the changes that would impact capital gain, so I think that’s a win for the business community, certainly with the inter-generational transfer of business, small business, within families… they’re leaving things the way they were so I think that’s a good thing,” Ross said.
“If a business makes a profit and they put that money aside for a rainy day or to invest in the future in their business or perhaps to take things like a maternity leave later on, once they get to a point where they are earning $50,000 in income then the tax level will change. What we didn’t hear was what they would be taxed at,” Ross said.
She said that leaves questions regarding whether that money will be indexed for inflation and what happens when the interest rates change and said chamber members would like to see more details prior to the 2018 budget.
ServiceMaster Restore president Chris Long said the details surrounding Wednesday’s announcement remain unclear.
Long tried to attend the minister’s meeting with business owners prior to the announcement and said he was asked to leave because it was an invitation-only event.
“We really need open communication and we need analytics back on these changes they’re proposing and we need to know exactly what those changes are and how they affect our small businesses and professionals,” Long said.
He said there is limited information surrounding the $50,000 threshold, and said there are a lot of questions that will need to be answered. Long said he and other business owners he spoke with would like to know what impact any changes to the tax system will have on company growth in the future and what long-term impacts it could have on the Canadian economy.
“All these things impact how the economy moves forward and the economy has slowed. People are not making decisions because they need to understand the financial impact of this tax change,” Long said.
Long said he’d like to see a royal commission established, similar to what occurred in 1967 surrounding tax reform.
“We haven’t had tax change in 45 years and when they did it last time they took five years, so we really need to have a proper review and have professionals that review the analytics and see how that impacts jobs and the future and innovation and entrepreneurialism,” Long said.
Ross agrees there should be a royal commission established.
“I think in the overall picture the biggest takeaway we have from this is that a royal commission looking at how the tax structure actually works, looking at the entire system, looking at and making sure that there are no unintended consequences for small business,” Ross said.
In an email statement, Saint John-Rothesay Liberal MP Wayne Long told Global News he’s feeling “very positive” over the finance minister’s announcement in Hampton.
“I am receiving a lot of feedback that is mainly positive,” Long said.
Long said he’s looking forward to sitting down with leaders in his riding to discuss the latest changes presented by the minister.
“I think this shows we have listened,” Long said.