MP Pamela Goldsmith-Jones was in damage control mode last week as she addressed a firestorm of criticism raised by the local business community regarding proposed federal tax changes.
The government intends to change the tax system in effort to remove what it considers to be loopholes, but small business owners are railing against the idea, saying it will make things unaffordable for them.
It’s a sentiment that Goldsmith-Jones appeared to be well aware of as she addressed dozens of members of the Squamish Chamber of Commerce last week.
“There’s deep concern ranging...to resentment to outright hostility,” she said of the hundreds of people who contacted her to voice their opinions on the proposed tax reforms. “I have literally never seen anything like the response I have received throughout the riding.”
“Mr. Morneau’s intention is to deal with large reserves of money that aren’t in the economy,” she said, referencing the federal Finance Minister Bill Morneau. “That’s the main idea. But in trying to look at that question, he’s ended up catching up everything in a net from people who are small businesspeople.”
She added she had spoken recently with the minister and expected him to be in touch in the coming weeks with plans that would address these concerns.
The proposed changes would eliminate income sprinkling, which allows business owners to pay their relatives a portion of their income. This could allow business owners to qualify for a lower tax bracket, because as individuals, they would report making less money.
There will also be changes for capital gains taxes. Currently businesses can convert their surplus into capital gains, which are taxed at a lower rate. The government is seeking to curb this behaviour.
Ottawa is also taking aim at passive investment income, which is taxed a lower rate.
“That was just very badly addressed,” Goldsmith-Jones said.
The federal government has since announced that small businesses will be reducing taxes to nine per cent, down from 10.5 per cent, effective 2019.
In the meantime, taxes will be lowered down to 10 per cent, starting January next year.
This announcement was a follow-up to a campaign promise made in 2015, but many noted that its timing coincides with the outpouring of concern regarding the other changes to business taxes.
Goldsmith-Jones also touched on other issues during her talk.
She presented a pin to Squamish resident Byrdie Funk, who had just recently regained her citizenship after a bizarre bureaucratic rule left her stateless for years.
Goldsmith-Jones had previously promised to advocate on behalf of all “lost Canadians” stuck in this situation.
During the lunch, she said her team was looking into the matter.
Funk also said that she and a team of advocates were meeting with officials in Ottawa to address this issue.
