Small business owners want tax clarity, not Liberal spin
Prime Minister Justin Trudeau speaks with media during the federal Liberal cabinet retreat at the Fairmont Palliser in Calgary, Alta., on Tuesday, Jan. 24, 2017. (Lyle Aspinall/Postmedia Network)
The Liberals' initial tax reform measures were widely criticized by small business owners as an attack on their livelihoods and a move that would hurt the Canadian economy.
Doctors and shop owners spoke out but before anyone could really get answers and clarity, the tax rules changed again.
On Sunday night, Prime Minister Justin Trudeau announced the small business tax rate would be cut to 9% from the current 10.5% … even though this was never included in the budget and went against all the rhetoric the government had used to date.
Their line, seemingly overnight, went from “small businesses are just a way for wealthy people to cheat on their taxes,” to talking about how beneficial it will be for small business owners to keep more of their “hard-earned money.” Of course, they wanted their government to be painted as the one who gave that money back to them.
As Conservative MP Pierre Poilievre said on CBC’s Power and Politics: “He’s giving back what he snatched away.” Only it’s much worse than that. The only thing worse than a restrictive tax rate for small business owners is uncertainty. As a small business owner myself - with the majority of my clients being small-business owners themselves - I can tell you that tax is not an afterthought that we cut from our vast year-end profits.
Tax money is something most of us small business people diligently squirrel away so we are not caught unprepared. There are a lot of risks inherent in business but tax is supposed to be one of the certainties.
We need to know how much we have to put away so we can make decisions about how to run our business. Can we hire another employee, invest in new technology now or will those things have to wait another year?
This massive flip-flop indicates the Liberals are out of touch with the Canadians these tax changes affect most. The changes to the tax rules around small businesses were a significant portion of the last federal budget and completely changing their rules and rhetoric show the tax changes were not that well thought out in the first place.
While we can momentarily rejoice that the small business tax rate is going down, we also need to look at the bigger picture of how and why this decision came to be. Do we trust a government who really seems to know nothing about what it is like to run a small business and will not listen to those who do until the outcry reaches peak volume? Because unlike the well-heeled decision makers, most of us can’t afford these kinds of mistakes.