By Aaron Mahoney (@Mahones93 on Twitter)

Conservative Finance Critic in town to talk potential Liberal tax changes

Sep 25, 2017 | 1:57 PM

LETHBRIDGE – One issue in Canada has been making all the headlines over the past few weeks, and that’s the Liberal government’s proposed tax changes. The discussion on changes was the focus of a town hall luncheon held today at Legion Branch No. 4 by Lethbridge MP Rachael Harder and Conservative Shadow Minister of Finance Pierre Poilievre to talk to small business, and farm owners from Southern Alberta. 

Finance Minister Bill Morneau announced the government’s plan back in July, which included closing three loopholes they believe have allowed high-earning business owners to avoid paying higher tax rates.

The government wants to change the methods around converting income into dividends and capital gains, and limit passive business income taxation. They’re also targeting income sprinkling, which allows a business owner to split his or her income among family members, whether they’re involved in the business or not.

If these changes were implemented, the government says the biggest impact will be felt by business owners with annual incomes of $150,000 or more.

Poilierve doesn’t buy those numbers, citing that small business makes up a ton of the Canadian economy and two thirds of the people employed at a small business make less than $73,000, which is part of the middle class and not the top one per cent like Prime Minister Justin Trudeau and Bill Morneau say.

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“I’m here today to stand up against this tax grab on our local businesses and family farmers, which is part of Conservative Leader Andrew Scheer’s “Save Local Business” campaign,” Poilierve said in a scrum with the media before the town hall got started. “Small business owners across the country are telling me this tax increase will be devastating , for example there will be a new tax on the savings and investment of small business people that could reach as high as 73 per cent. That’s a tax that won’t be paid by the big players on Bay Street, who are totally exempt from all the tax increases, but your local corner store, grocer or family farm will pay and it will devastate them,” Poilierve added.

He says people have voiced their concerns to him about selling the family farm.

“They’re worried they won’t be able to sell their farms to their children because the taxes on selling to a family member will be set at 45 per cent under these changes, but selling to a foreign multinational will come with no tax charge,” Poilierve continued. “This new tax will make it hard for small businesses to build up a pension, a sick leave fund, or a maternity leave plan; basically the government is ruining the personal lives of these people. I believe the inter-generational family farm will be gone within 20 years if this new tax goes into place.”

MP Rachael Harder says she has heard similar concerns, more from small business owners in town.

“I’ve heard from thousands of people by e-mail, letters and telephone calls who are expressing concern about the proposed changes. They’re worried about the livelihood of their families, but not only that they’re worried about what would happen to their employees as well,” Harder said.

Harder held a town hall with about 150 residents who came out and expressed concerns, and today another group came to offer what personal impacts they would feel as a result of these changes.

“People have told me if they can’t put some savings aside because they’re being taxed through the roof, it’ll affect their ability to create jobs moving forward. Some have even said that if these measures are signed into law, they could be forced to close their doors,” she continued. “For some businesses that means 5 jobs lost, other businesses that means 57 jobs lost, and for others it could mean 20 jobs lost. Add that all up, and you have a ton of employment that is going to be effected. We know about 65 per cent of people who are employed in Lethbridge are in the private sector, and the majority of those work for small businesses, so this is going to have a huge impact on the people of Lethbridge,” Harder finished.

During the town hall, Poilierve addressed the three keys points outlined by the Liberals and took questions from the crowd.

The key point to those in attendance was the tax bracket changes in the proposals, versus what the law looks like now.

“Right now, public corporations pay a total tax rate of 55.41 per cent while a small business that invests their cash in passive income pay a tax rate of about 50 per cent,” Poilierve said. “What Trudeau is proposing is they get taxed a second time on the money that’s left over. That’s what would bring the tax rate close to 73 per cent, it’s double taxation on small business while the rate for corporations stays the same.”

Poilierve says that violates every principle of our tax code.

“Our tax system is set up so money is only taxed once, you don’t get double taxed on the same dollar,” he stated. “Trudeau’s plan would double tax the same dollar, which would leave a small business person with just 27 cents on the dollar of passive income.”

The Liberals continue to look for feedback from Canadians on their tax proposal until Oct. 2 when the window for consultation closes.