Those who will be affected by the federal government's proposed changes to the Income Tax Act are plagued with uncertainty, brought to light this week as the Senate Committee on Income Tax hosts public hearings in the Western provinces.
Those who will be affected by the federal government's proposed changes to the Income Tax Act are plagued with uncertainty, brought to light this week as the Senate Committee on Income Tax hosts public hearings in the Western provinces.
“Overall, we're pretty concerned about it and it would appear the Liberals are going to march forward with it despite significant opposition, ” said Chuck Collins with the Cochrane and District Chamber of Commerce.
Collins said the initial small business reaction to Finance Minister Bill Morneau's tax reform was “pretty severe, ” when the initially proposed changes came down the pipe this summer. Essentially, the changes would place restrictions on income splitting; limits on use of private corporations for investments unrelated to the business; and limit conversion of income into capital gains.
Initially touted as a means to end tax advantages for the wealthy, significant small business backlash asserts the changes will be damaging to the economy and hurt the middle class.
For Banff-Airdrie Conservative MP Blake Richards, he is hopeful the Senate Committee can shed some light on the angst experienced by many.
“I'm glad to see the Senate Committee is doing some consultations on this - it's certainly something the government didn't do, ” said Richards, adding that the potential impacts are “seriously detrimental ” and would particularly impact family-run businesses.
Richards said the added layers of bureaucracy would wind up putting strain on businesses that often run on pared-down budgets, forcing them to track every contribution made to their business to determine if its income equivalency should be taxed.
Senator Scott Tannas, who resides in High River, took part in the public hearing Tuesday in Calgary at the downtown Delta Hotel.
Explaining that the Senate Committee is on a “cross-country listening tour ” that will inform their recommendations, Tannas said concern and confusion are at the forefront for many.
“We heard a lot about confusion and paralysis as a result of these halfway proposals … a lot of people are stuck, ” said Tannas, explaining that those with inter-generational land sales or transfers, as well as those with matrimonial settlements are left in limbo until further direction is passed down.
Tannas said as it stands, the proposed changes would prove a “bureaucratic nightmare ” that would make it difficult for small businesses to grow and hire people.
He added “regional fairness ” is important to the committee.
The committee will table its final report that will include its recommendations to the Senate by Dec. 15.
Richards will be hosting a fundraising brunch that is free to attend at the Cochrane Legion from 10 a.m. to noon on Nov. 18 where he will be discussing the proposed tax reform and their effects on small businesses. Attendees are asked to RSVP by Nov. 16 to [email protected] or call Lori Rehill at 1-877-379-9597.
