The Kelowna Chamber of Commerce is adding its voice to a chorus of chambers across the country speaking out against a federal government proposal that would change the way corporations are taxed.
The changes are outlined in a recently released consultation paper, and show a handful of proposed laws that would limit business owners’ ability to use his or her family to defer taxable income, and reduce tax deferral advantages enjoyed by people working inside corporate structures.
“Many of the richest Canadians are unfairly exploiting the tax rules designed to help businesses thrive,” Finance Minister Bill Morneau said upon releasing the paper. “These tax advantages are in place to help [small] businesses reinvest and grow… We want to make sure those rules are used to do just that, and not to give unfair tax advantages to certain—often high-income—individuals.”
Kelowna Chamber President Tom Dyas says his organization believes in the principle of a fair tax system, but is “concerned some of the proposed changes could have a significantly negative impact on entrepreneurs and family owned small businesses.”
“For the general public this may ‘sell’ well, as it will be framed as going after ‘those rich people,’ but to the small business owners who are the backbone of the Canadian economy, and have risked quite a bit to start up and run their businesses, this could punish them and become a disincentive for others to take risks in running their own businesses,” he says.
Dyas says the chamber “understands and supports” the federal government’s desire to ensure tax fairness, but wants the government to take a close look at what the proposed changes might mean for small businesses should they be implemented.
“The current proposed changes do not result in this desired tax fairness,” Dyas says.
When Morneau released the consultation paper July 18, he initiated a 75-day consultation process during which the government will accept submissions on the proposals.
A more detailed breakdown of the proposed changes is available here.
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