September 28, 2017
The Honourable Bill Morneau
Minister of Finance
90 Elgin Street
Ottawa, Ontario, K1A 0G5
Dear Mr. Morneau
RE: Proposed Tax Reform Measures
Our Chamber of Commerce represents approximately 200 small business owners in Antigonish, Nova Scotia and the surrounding area. Following a summer break, the topic for our Business Connects event held on September 20th was the “Proposed Federal Government Tax Changes”. Grant Thornton provided an informative presentation to the gathering. We are writing to share with you the resounding concerns and disappointment we heard from the 75 people in attendance:
- Members are concerned the 75 day consultation period announced on July 18, 2017 is far too short given the magnitude and complexity of the proposed changes. The timing of this consultation period over the summer months further constrains the opportunity for meaningful consultation. Irrespective of the timing, we also heard loud and clear that a 75 day consultation period is much too short.
- Those in attendance thought the reasonability test of compensation in a family run business is an unnecessary intrusion into the complex 24/7 family dynamics required to operate a successful family owned business.
- Everyone agreed the proposed changes to the taxation of investment income do not take into account the necessity and importance of maintaining savings to help weather and sustain operations during economic downturns.
- There was general consensus the proposed changes to family trusts commonly used as a vehicle to plan for children’s education and save for retirement is a disservice to a group who do not have the luxury of company sponsored pension plans.
- The group agreed the proposed changes will add unnecessary complexity to succession planning and the transfer of successful profitable businesses from one generation to another.
- Here in Antigonish, our members are particularly concerned about the impact that the proposed changes will have on the professional service firms of doctors and other professionals. There is already an acute doctor shortage in Nova Scotia and these changes will only serve to exacerbate the problem.
- There was unanimity in the room regarding the fact that there will be unintended consequences to these proposed measures. The social fabric of our community is supported by local charities who rely heavily on contributions from our small local businesses and professional service firms.
Our small and medium sized business believe they will be disproportionately affected by these changes. They are the backbone of what fuels our local economy. These changes will result in more dollars being drained from our local economy and flowing to Ottawa.
We stand in solidarity with our membership and hereby request that the consultation period be extended with a view to modifying and amending the proposed changes in a manner that will ensure fair and equitable taxation treatment of small business and professional service firms.
cc: Sean Fraser, MP, Central Nova
Randy Delorey, MLA, Antigonish