The Federal Finance Department is considering major changes as to how corporations are taxed and the proposed changes would have a significant impact on hundreds of thousands of small businesses across the country. We are reaching out to you to raise your awareness of these proposed changes and seek your feedback. These are the most significant tax policy changes in more than fifty years and there has been little consultation.
The Federal Finance Minister Bill Morneau released a consultation paper that outlines the proposed changes and on July 17th it initiated a 75-day consultation process during which it will accept submissions on these proposals. The Kelowna Chamber, along with the hundreds of Chambers across Canada, is raising the red flag and expressing major concern over the proposed changes.
The tax system is already complex and these changes could increase that complexity by targeting income splitting for small business owners and restricting access to the lifetime capital gains exemption. The government’s proposals also target the tax treatment of passive investment income earned in a private corporation and strategies to convert income into capital gains.
It is the outcome of these proposed changes that is most alarming in that it could pull the rug out from underneath thousands of small family owned businesses that have faced significant risk in starting up and maintaining their business. Professionals would also be hard hit and that could make it even tougher to recruit and retain doctors who are cornerstones for so many already challenged small communities across the country.
An announcement was expected, as the federal government had indicated in its Budget that proposals would be put forward to address perceived inequities in the corporate tax system. However, the scope of the proposals went well beyond the expectations of most professionals and will affect most Canadian business owners who carry on business through a private corporation.
We have reached out to our local MPs to raise this issue with them and will work with our national partners to do the same across the country. Kelowna Lake Country MP Stephen Fuhr engaged stakeholders on this issue recently and the Chamber was pleased to participate in that discussion on behalf of our members and the business community.
We will keep you informed on this issue in the coming weeks but in the meantime if you are concerned we would like to hear from you. Please be aware of the following:
•
PROVIDE US YOUR FEEDBACK
- A short membership survey will be coming out soon to gauge your awareness and understanding of the proposed changes. Please respond to this survey as quickly as possible so we can pass on your concerns.
•
TAKE ACTION
– If you feel strongly enough about the proposed changes we would encourage you to write
your local MP
so he is aware of your concerns. You can also submit a response directly to the
Finance Minister
.
The Kelowna Chamber is asking the federal government to listen to the concerns being expressed and re-examine the proposed changes, or at the very least extend the consultation period so the full impact of the proposed changes can be better understood.
Sincerely Yours,
Tom Dyas, President
Kelowna Chamber of Commerce
