Federal tax proposals disastrous for small businesses, says CFIB
A survey from the Canadian Federation of Independent Business says 94 per cent of small business owners and 95 per cent of tax practitioners oppose the changes
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OTTAWA—94 per cent of small business owners say the Trudeau government’s proposed federal tax changes will hurt Canadian businesses and their families, according to a new survey by the Canadian Federation of Independent Business (CFIB).
“The government is trying to convince the public that these proposed changes are meant to support the middle class—that they are only targeting high income business owners. The reality, however, is these are broad-brush proposals that are going to affect businesses at every income level across the country,” said Dan Kelly, president of CFIB. “Nine out of 10 business owners have told us that these tax changes are significant to their business.”
One of the government’s proposals would limit the ability of small businesses to share income with family members, a change CFIB says would affect two-thirds of small business owners, including more than 50 per cent who share income with their spouse.
Another proposal would limit sheltering passive business investments as a hedge against economic downturn, which CFIB says would affect 65 per cent of small businesses.
“The implications of these changes for small businesses—and by extension to the national economy—are huge,” said Kelly. “These aren’t loopholes for the wealthy, as the government claims. These are legitimate ways for small business owners to grow their business, ensure the stability of the firm during uncertain times, or to save for retirement. Without these measures, businesses will not be able to create as many jobs for Canadians.”
The survey found a majority of business owners, 88 per cent, believe the proposed changes will make it more difficult for their businesses to grow and create jobs.
Tax practitioners surveyed by CFIB also expressed disdain for the tax reforms, with 95 per cent saying the changes will further complicate the tax system and increase the cost of tax compliance for their small business clients.