Thanks, Prime Minister Justin Trudeau, for going after a rarity in Canada: the “wealthy” small business owner.
The prime minister has said the government plans to eliminate tax incentives that he believes benefit wealthy small business owners.
We’re skeptical of how many wealthy small business owners there are in Canada, and if these measures won’t punish other entrepreneurs.
As part of Trudeau’s plan, business owners would no longer be able to lower their tax rate by sharing income with family members in lower income brackets, even if those relatives are not active in the business.
There would also be limits on the use of private corporations as a way to gain tax advantages when making passive investments, and caps on the conversion of a corporation’s regular income into capital gains that are typically taxed at a lower rate.
This is an example of the prime minister having the wrong priorities. There are more pressing things for the government to worry about than successful small business owners.
Small businesses are the backbone of the Canadian economy. Regardless of whether you’re in small-town Saskatchewan or a big city in Ontario, these communities rely heavily on their small businesses. They employ people, provide excellent service and selection, and donate to various causes in the community.
Most small business owners are not wealthy people. They are dedicated individuals who work every day, put in long hours, employ a few people and treat their staff like royalty. They aren’t making great sums of money, and those profits are often reinvested back into their businesses.
They aren’t owners of a big, fancy house with a four-vehicle garage and a pool in the backyard.
They didn’t start up a small business in an effort to get rich. They did it because they had a dream to be an entrepreneur, because they saw a need in the community, or because they didn’t want to work for anyone.
Those who enjoy success in their business have done it based on work ethic, customer service and ingenuity.
And you can be sure these government measures will hurt a lot of small businesses who aren’t wealthy.
The Trudeau Liberals have tried to position themselves as champions of the middle class. And you can be certain they received a lot of support from small business owners and employees in the last federal election.
Small business owners have played a key role in the Liberals status as the natural governing party of the country.
So it’s astounding that the Liberals would want to go after what has traditionally been a strong base of its support.
By all accounts, Liberal MPs are receiving a lot of criticism over this issue, and deservedly so.
Even if the Liberals do the right thing and back away from this scheme, hopefully entrepreneurs will have long memories when it comes time for the 2019 federal election.
