Business Attraction Retention and Expansion (BARE) committee chair Terry Cody is urging those concerned about tax changes proposed by the federal government to write and voice their concerns now, because the window for comment closes Oct. 2.
"Sign a petition, write a letter to your MP, to every Alberta Liberal MP, to the finance department, to the prime minister. If you send the same letter five times to five different people, that is probably a good thing," he says.
He notes form letters and petitions regarding the proposed changes are available at the Everything Olds office and on the Everything Olds and Olds & District Chamber of Commerce websites.
He also suggests if those who are concerned about the changes belong to any kind of association, they should urge representatives of that group to convey their concerns to the government.
According to Finance Minister Bill Morneau, the goal is to close "loopholes" that he says enable wealthy Canadians to pay taxes at lower rates than they otherwise would have.
That includes people who incorporate themselves, then draw income from their businesses or farms by paying lower rates of tax that are allowed under incorporation.
In general, according to critics and accountants, the federal government wants to eliminate or drastically change the following:
Income sprinkling, whereby a business owner pays family members a salary or dividend in order to cut the business's total tax burden.
Passive investment retention, under which a business owner invests income for reasons other than immediate reinvestment into the business. According to those attending the Aug. 23 meeting, that can include taking income from the business as a source of retirement income.
Income conversion to capital gains, which, according to critics, is essentially declaring income in a way that creates a lower tax burden.
Cody and local business people say those changes will hurt small businesses' incomes, possibly putting jobs in jeopardy, and will be a disincentive to create new businesses.
They say the existing rules were put in place to compensate business owners for the fact that, for example, they don't get pensions, like their employees do.
Cody says the question of who is "rich" is murky these days anyway.
He says "the vast, vast, vast majority" of people making $250,000 or more are actually employees themselves ñ of large corporations or the government, so they would not be affected by these changes.
Critics also say the super rich have their own ways of hiding their income offshore as well.
More than 100 people came out to the Evergreen Centre conference room on Monday, Sept. 18 to hear Calgary tax lawyer Arthur Olsen explain the impact of the proposed changes. The Olds Institute, via the BARE committee, arranged for his talk. The room was so packed it was standing room only.
Cody is hopeful those who heard the talk will register their concerns. He's also hopeful concerns raised by people across the country, as well as the federal Conservatives, will have an impact on the federal Liberal government, forcing them to back down, at least a bit.
"I'm hopeful that it'll have an impact, because I think that Mr. Morneau and Mr. Trudeau did not fully understand the impact of the proposed changes," Cody says.
He says, ironically, through these proposed tax changes, the federal government itself is being unfair.
"I think at the end of the day, what is happening is small business people across the country are saying, ëwait a minute, for 30, 40, 50 years, these concessions have been in place ñ by design ñ to encourage small business. Ripping them out, holus-bolus, with no consultation, is the height of unfairness.'"
"For 30, 40, 50 years, these concessions have been in place ñ by design ñ to encourage small business. Ripping them out, holus- bolus, with no consultation, is the height of unfairness."TERRY CODY CHAIR BUSINESS ATTRACTION RETENTION AND EXPANSION COMMITTEE
