Small business owners in Saskatchewan are speaking out against the federal government’s proposed tax changes.
The Liberal government aims to close what it calls “unfair tax loopholes” with three new restrictions.
First, business owners will not be able to put income into a family member’s account, in a way of salaries, to avoid paying a higher tax.
They will not be allowed to convert their income into capital gains, which is taxed at a lower rate than income.
The final proposed change will limit business owners’ passive investments, which include spending on stocks or real estate.
“We're looking at the tax advantages that are going to the wealthy, that are going to some professionals that are incorporating and trying to make sure that our system is fair,” Finance Minister Bill Morneau told Evan Solomon, host of CTV’s Question Period.
But some business owners argue they’re not the wealthy, and the tax will impact their company’s growth.
“We're middle-class people taking a risk, having a corporate loan, trying to make ends meet for the people at our shop,” Chelsea Stebner, partner of Parr Autobody in Saskatoon, said.
“How can we make a plan to let's say buy $100,000 worth of equipment when we don't know the impact of the dollars that we’re going to have to fork over to the government?”
Michael Gorniak, a partner at an accounting firm in Saskatoon, is asking his clients to write letters to government officials opposing the proposed tax changes.
“Rather than just sign a petition, we think we need a stronger message sent to Ottawa and as a result we’re asking our clients to write the minister of finance, we’re asking them to include the minister of small business, their local MP and also Mr. Goodale. Hopefully a large enough voice will make change happen,” Gorniak said.
Gorniak said the changes could negatively impact the economy, as small businesses may have to cut staff to offset their higher taxes.
The proposed changes are under consideration for 75 days, which is set to end on Oct. 2.