Last month, Finance Minister Bill Morneau released a discussion paper that suggested one of the best ways to raise money is to close certain tax loopholes that benefit the wealthiest Canadians. “Many of the richest Canadians are unfairly exploiting the tax rules designed to help businesses thrive,” he said.
In particular, a commonly used provision called “income-splitting” (where a higher income member of the family would split their income with their spouse to lower household taxes) was on the chopping block.
Rather than affecting Canada’s 1%, though, the removal of this provision would hit hardest our small businesses, farmers, and many professionals such as doctors and lawyers.
Needless to say, our small business and professional communities have been outraged. I’m receiving dozens of calls and letter and emails every day concerned about how this tax amendment will affect the very people that the Liberals promised to help: the middle class.
And to add insult to injury, the government gave Canadians only 75 days to make their views known – much of which will be taken up during the late summer and beginning of the school year, when people are distracted and unable to focus on federal tax policy.
There’s no question that we currently have a huge income and tax disparity in Canada. Over the last fifteen years, the incomes of middle income groups have declined. The incomes of the poorest 40 per cent have declined a lot. And the wealthiest 10 per cent? Their incomes have shot up higher than ever.
Sadly, this is not the first time the Trudeau government has chosen to attack the middle class first.
They raised the personal income tax rate on skilled and educated workers from 29 per cent to 33 per cent. According to the Globe and Mail, this “tax hike will discourage economic activity and make it more difficult for Canada to attract and retain knowledge-based workers.”
They also cut the Children's Fitness Tax Credit, the Children's Arts Tax Credit, the Education Tax Credit and the Textbook Tax Credit; and cut almost in half the amount Canadians can put into a tax-free savings account.
At the same time, Canada’s wealthiest corporations have taken advantage of off-shore tax havens to avoid paying little to no taxes at all. Rather than go after them with the full force of the law, the Minister of Revenue made deals to close the tax havens without any penalties – losing billions of dollars in taxes from our government coffers.
Over the past 2 years, I’ve held a series of forums with small business owners across this riding of Kootenay-Columbia. I heard many issues, such as the lack of infrastructure to attract workers. I also heard that many of our small to medium business are struggling to survive, every day.
What can we do about this Liberal tax grab? First, when I return to Ottawa this month, I’ll demand that the consultation period be extended to allow small business to have their say. And with my NDP colleagues, we’ll continue to go after the Liberals to close the loopholes that are actually hurting our economy.
We need to support our small businesses, our professionals, and our educated workers. Let’s not turn back the clock on the middle class.