'It's a business killer': Calgary business owners slam Liberal tax proposals

A controversial proposal from the federal Liberal government to remove"unfair tax advantages" has some Calgary small business owners crying foul.

In July, Finance Minister Bill Morneau released aplan aimed at closing tax loopholes that the government has said unfairly let business owners pay lower taxes.

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The plan would crack down onwealthy Canadians avoidinghigher tax rates byincorporatingthemselves and drawingincome from their businesses while paying lower corporate taxes.

In a letter to Morneau, Yale & Partners LLP Chartered Professional Accountants said the proposed changes could lead to a tax rate of 73 per cent on a corporation's investment income, a rate that Calgary business owner Tom Spenceley says is far too high.

"It's a business killer,"Spenceleysaid. "Why would I start a business and do anything at all when I'm subject to a 73 per cent tax? Why don't I just go work for someone?"

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Spenceley has called a meeting with Liberal MP Kent Hehr to contest the proposed tax changes, changes Spenceley says unfairly target small businesses.

"That's hardly fair because weplayedthe rulesrightup to this point from day one only to find out now they want to change the rules,"Spenceleysaid."Where does fair come from that?"

'These rules impact business'

The proposal wouldrestrictbusiness owners fromspreading income to family members in lower tax brackets,limitthe use of private corporations to make passive investments, and limit the ability for a corporation to convertregular income into capital gains.

A 75-day consultation period to review the proposed changes ends Oct. 2a window Amber Ruddy with the Canadian Federation of Independent Businesses says is too short.

"If this were to address cracking down on people abusing the system, that would be one thing. But that's not the case," Ruddy said.

"These rules would absolutely impact business owners across the spectrum well beyond these so-called 'wealthy' individuals."

The CalgaryChamber of Commerce also said it wants more time to providefeedback on the proposed changes and is polling its members on how they will be impacted.

Issue for caucus retreat

Liberal backbenchers who have been bearing the brunt of the backlash fromdoctors, lawyers, accountants and other small business owners upset about the plan arepreparing to vent their concerns during the government's summer caucus retreat next week in Kelowna, B.C.

"There is a genuine outrage among people who have made all their financial calculations and planning based upon a certain set of tax assumptions and are now seeing those tax assumptions challenged," said Toronto MP John McKay.

"I don't know at this stage how locked-in the government is on their proposals, but I do know there is significant outrage among a relatively influential group of people."

Those people would be "really irritated" if the consultation turns out to be strictly pro-forma, McKay added.

Winnipeg MP Robert-Falcon Ouellette said he's heard loud complaints in his riding about the proposed changes, but has also received feedback from others who say it's time for a more level playing field when it comes to taxes.

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