Scheer To Turf Trudeau’s Small Business Changes

Today is a good day. Today the Conservatives announced that, if elected, they would:

• Reverse the ‘savings’ tax increases that Justin Trudeau and Bill Morneau (#eaueau) announced on July 18, 2017, that targeted private companies and their owners;
• Exempt spouses from the new, ambiguous TOSI rules;
• Take steps to address the administrative nightmare that is the Canada Revenue Agency;
• Cut federal regulations, by 25%, for small business owners over the next 4-years. Now, this is something;
• Eliminate two federal regulations for every new one adopted.

https://www.conservative.ca/scheer-pledges-support-to-small-businesses/

Remember that the 2017 Liberal proposals targeted:

• Private company owners who save too much in their companies, taxing their corporate savings at WAY higher rates than passive income of public multinational companies;
• Entrepreneurial families who pay dividends to certain family shareholders;
• Intergenerational transfers of family businesses, making it way more tax effective to sell to a foreign multi-national (later abandoned);
• A few other estate planning items (later abandoned).

It turns out that July 18, 2017, was the exact day when I took a severe interest in federal politics. It was the day my client’s businesses, and my family’s company came under attack by the ruling Liberal government. Ever since I was a junior accountant, I have been frustrated by the complexity and ambiguity of our tax system. It was on July 18, 2017, that I was finally able to articulate why. So, earlier this year, I wrote a blog and recorded a video about Tax “loopholes” and the real problem with Canada’s tax system.

The Liberal’s 2017 proposals were poorly thought out, terribly delivered, and full of ambiguity. Private company owners, farmers and fisher-people from across the country revolted. Their efforts forced a significant climb down from the original proposals, as well as a re-introduction of a tax rate reduction that Stephen Harper announced in 2015. Still, private company owners were left holding a new bag of increased tax complexity and ambiguity.

On January 1, 2019, the Liberals tried to use Stephen Harper’s planned private company tax rate reduction as a way to win back favor with private company owners. I thoroughly debunked this in a video that I made called “The truth about the 2019 small business tax cut to 9%”, (which received a lot of attention).

Today we learned that a political party has been listening to us. Listening to the thousands of business owners and leaders, professional associations (CPA Canada included), provincial leaders, business leaders, and tax professionals who called foul on this ill-conceived mess.

In May, I was invited to testify in Parliament about the 2019 Federal Budget. Since the budget was very light on tax policy, I decided to help Members of Parliament understand the barriers that our government puts in front of Small Businesses. It was a spirited encounter. My main task was that our country’s leaders consider modernizing our dated and excessively complex tax system. I asked as many others have (including CPA Canada) for a non-partisan review of the state of things.

Although this announcement falls short of the full-scale independent review of our tax system that we have been asking for, the elimination of 25% of our federal regulations is significant. If achieved, this policy should reduce/remove barriers to owning and operating private companies in Canada.

Anyways, I commend the Conservative Opposition for taking a stand with private companies and their owners. It’s a significant policy announcement that many of Canada’s job creators will appreciate. I certainly do.

Do you have questions about this blog? Ask us anything, during your FREE 30-min consultation call.