Tough Year for Small Businesses in Canada

December 18, 2017

It has been a tough year for small business owners in Canada. Recently, Canada’s Finance Minister Bill Morneau sought to clarify the role of a family member and whether or not they would be excluded from potential earnings of their family business. This came after his summertime announcement to change the way the small and medium-sized businesses are taxed. These tax changes are proposed to be effective for the 2018 and subsequent taxation year.

As soon as we caught wind of this proposal, my Conservative colleagues and I took to apply pressure on the Liberals on behalf of the farmers, and small business owners who would be affected. As a result of this pressure, Liberals announced in October that they would revise some of their proposals. As the MP for Edmonton Manning, I provided feedback to the Finance Minister that I received from constituents via emails, phone calls, meetings and from the participants of my Business Tax Town Hall held in August.

Much to my dismay, Morneau’s December 13 announcement still does not lower the small business tax rate. The two main elements that small business owners have raised with me since the summer are: income sprinkling and passive investment. Both of these policies have been poorly communicated and are difficult for Canadians to understand.

The Liberals are still exposing Canadians to higher taxes, vague language and are saying one thing, but doing the opposite. This unclear policy has been causing Canadians to read between the lines and interpret this proposed legislation for themselves.

In deep contrast, Conservatives believe that taxes should be lower for all Canadians. This means for businesses, families and individuals. This is the core of a Conservative vision – to create prosperity and opportunity for everyone. We have a positive vision for Canada, one that recognizes and responds to the challenges hardworking Canadians face every day.
Unfortunately, the government announced new details about their policy just days before the holidays giving small and medium-sized business owners two and a half weeks to determine the impact of these tax changes set to take effect in January 2018. This short timeframe and confusing information is unfair to Canadian business owners.

So far the policies of this government have been to spend irresponsibly, largely while borrowing money with no plan to pay it back, or balance the budget for decades to come. Conservatives care about hardworking Canadians and this type of tax policy is dangerous for small businesses with a great potential to prevent them from continuing to grow.