By Dominic Abassi

Small biz tax reform sparks concern over loss of local jobs, doctors

Sep 18, 2017 | 10:23 PM

NANAIMO — Small business owners and professionals in Nanaimo are scrambling to add their voices to a growing chorus of discontent over Ottawa’s plan to end what it calls “unfair tax advantages.”

Greater Nanaimo Chamber of Commerce president Kim Smythe said there were equal parts fear, anger and confusion at a recent information session on the federal government’s proposed small business tax change.

“These are far reaching pieces of legislation that will attack every small business in Canada,” Smythe said. “In Nanaimo specifically, somewhere over 90 per cent of all businesses in our region qualify as small businesses…So many of the people we know personally who are working hard to contribute to the local economy.”

The loopholes being closed target “wealthy individuals,” the federal finance minister said.

“That isn’t true at all. It affects small businesses that make $80,000 or less…all the way up to professionals who make $250,000 or more,” said Lisa Trimmer, from Nanaimo’s Baker Trimmer Chartered Accountants.

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“That’s lower-middle class to upper-middle class. That’s not the super wealthy and those are the people who live in our community.”

Trimmer said the proposal has a big impact on doctors, a commodity desperately needed in the Nanaimo region. “For professionals, they’re talking about possibly leaving where rates are higher and tax rates are more beneficial for them.”

People who rely on the jobs created locally by small businesses will likely be touched by the changes as well, Trimmer said.

“Owners are either going to not hire more people or they’re going to bring their businesses down into just themselves and their spouses.”

Nanaimo-Ladysmith NDP MP Sheila Malcolmson said she received nearly 500 letters and emails from concerned constituents. She said the topic dominated discussion in the House of Commons on Monday, with the Liberals repeating the mantra of targetting Canada’s wealthiest. 

“We kept saying ‘but our accountants and our small business people at home are saying that you’ve drawn the rules so badly that you’re capturing them,’” Malcolmson said.

She said the public consultation, which ends on Oct. 2, was too short and “badly managed.”

Smythe said the Chamber is planning another information session with tax professionals to address a “lack of clarity” around the Liberals’ plans.

The proposed changes have raised the ire of doctors, lawyers, tax planners and other small business owners who’ve used incorporation to reduce their income tax burden.

They would, among other things, restrict the ability of incorporated business owners to lower their tax rate by sprinkling income to family members who do no work for the business.

Finance Minister Bill Morneau said the changes will address unfair tax strategies used by the wealthy and are not aimed at hardworking entrepreneurs.

dom@nanaimonewsnow.com

On Twitter: @domabassi