September 28, 2017
Mr. Tony Clement
17 James Street
Parry Sound, Ontario
Dear Mr. Tony CLement,
On July 18, 2017, the Department of Finance released a set of proposals – including draft legislation and explanatory notes - that significantly impacts private corporations and their shareholders especially for small and medium sized business owners despite the Liberal government’s constant message to the public that the tax changes will not affect these persons and are meant to tax the rich. I find this rather appauling and very misleading to the public.
I recently moved to the Parry Sound area and opened up an accounting office in Parry Sound. I have 20 years of tax experience and I can hardly understand the rules. What I do understand is this will add significantly complexity for small and medium sized businesses to comply with the proposed tax laws if and when they are enacted and will also result in an increased tax burden to most.
As you are aware, within the Parry Sound area businesses mainly consist of small and medium sized businesses with the odd large business here and there. Small and medium sized businesses will have to incur additional annual professional fees, in some cases significant to try to comply with the proposed tax laws, in my view there is no way in hell that the vast majority of these people will be able to understand how to apply the proposed changes without the help of a professional. If the rules are applied incorrectly, they would incur significant additional income taxes, interest and potential penalties over and above what they already pay.
As a private business owner, my unequivocal message to you is that these tax measures are ill-conceived and will – without a doubt - have unintended consequences. Overall, the proposals are harmful to the hard-working families who assume extra-ordinary risks when operating businesses in Canada.
As a citizen, constituent, and entrepreneur, I implore you to take an active interest in the proposals and determine for yourself how such proposals will result in dramatic tax increases for many entrepreneurs – small, medium and large private corpoations. Ultimately, the proposals, if enacted as proposed, will result in significantly increased tax loads for entrepreneurial families. Please do not allow the Federal Finance Minister to enact these changes.
In 1964, The Royal Commission on Taxation (the “Carter Commission) was provided over two years to study and develop recommendations for a new tax framework for Canada. The government then took another six years to finalize reasonable legislation. With the current proposals, our government has allotted 75 days of consultation. This is clearly an inappropriately short period.
Please take your time and consider the full ramifications of what is being proposed. There is an opportunity to create tax fairness for all Canadians. However, as proposed, the proposals fall short and could cause serious economic damage to the lifeblood of our country’s economy.
David Patten, CPA, CGA