The president of the Kelowna Chamber of Commerce is refuting Prime Minister Justin Trudeau’s defence of proposed federal tax changes that claim the people earning $250,000 are paying less tax than someone earning $50,000.
The rationale has been used repeatedly by Trudeau during his last three days in Kelowna when challenged about the controversial proposed tax changes aimed, he says, at closing loopholes used by owners of Canadian private corporations (i.e. small business) to pay less tax.
But chamber president Tom Dyas said there are no “loopholes,” just existing tax laws, adding that of the 2.8 million business in Canada, only 125,000 have income over $200,000.
“This is like killing an ant with a sledgehammer or a stick of dynamite,” said Dyas.
The Kelowna Chamber of Commerce has a paper coming out soon responding to, and refuting, Trudeau’s claim that small business owners making more than $250,000 are paying less tax than someone earning $50,000.
The chamber has been vocal in its criticism about the tax change proposals, labelled the biggest change to Canada’s tax code in the last 40 years. It says the changes will hurt small businesses across the country and Liberal MPs have been getting an earful from constituents. Liberal MPs have relayed those unhappy messages directly to Finance Minister Bill Morneau and Trudeau this week in Kelowna at the Liberal’s summer caucus retreat.
Trudeau was challenged several times about the proposed tax changes Wednesday night during a large town-hall-style meeting at UBC Okanagan. One woman, a local doctor, said they will force her to decide between starting a family and continuing with her practice because of the financial implications.
Dyas, who has had a chance in recent days to have one-on-one conversations with both Morneau and Trudeau about the proposed tax changes, said he believes the pair are at least listening and said he is now hearing talk of “tweaking” the proposals, something he had not heard before.
“They seem to be receptive, but they still have their rhetoric and the mantra they bring forward,” said Dyas.
That mantra is the changes will make the tax system fairer for the middle class by making those who earn more than $250,000 a year pay a little more in tax while those the prime minister describes as the middle class will pay less.
Dyas, however, remains concerned, especially about the 75-day consultation period announced for the changes.
He said when the current tax rules were announced 50 years ago, there was four years of consultation and the new rules went into effect three years after that.
The current proposed changes don’t take into account that in many cases, it may have taken years for a small business owner to build up his or her business and the financial sacrifices they may have made along the way, he added.
Dyas also noted large corporations are not being hit the same proposed rules.
Critics of the tax proposals say they could affect investments in small business, spending on innovation and even the hiring of new staff.
“Small business is the backbone of the Canadian economy,” said Dyas. “With the uncertainly down south and the Canadian economy getting stronger, why would they want to attack small business?.”
The Kelowna Chamber of Commerce is the second largest chamber B.C. and Dyas said he has heard loud and clear from its members they are not happy with what is being proposed.