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The Coalition for Small Business Tax Fairness, which HRAI recently joined, now has a unified voice of more than 70 organizations representing hundreds of thousands of business owners across Canada. The coalition has written a new letter to Finance Minister Bill Morneau containing a professional analysis confirming that Ottawa’s tax proposals will affect middle class business owners, resulting in higher tax rates than other Canadians with similar income levels.

The government has stated that these proposals would not affect business owners with incomes under $150,000. Tax practioners disagree.

One of the new rules introduced by the government would restrict small business owners from sharing income with family members. Tax practioners say that this can affect business owners with incomes as modest as $50,000. Also, as two-thirds of Canadian incorporated businesses are majority owned by men, the restrictions on sharing income with a spouse are likely to remove a disproportionately higher number of women from benefiting from their family’s business.

The government is also proposing changes that would discourage small business owners from holding certain types of investments in the incorporated company. According to tax practioners, however, business owners retain business earnings in the corporation to safeguard against economic downturns, secure bank financing and invest in other start-up companies.
Tax practioners have confirmed that the proposed tax changes would result in higher combined corporate and personal taxes for business owners across the board and in many cases, small business owners would incur tax rates far greater than what an employee with a similar level of would pay.

HRAI’s President Warren Heeley stated “The Coalition is simply asking the federal government to take the current proposals off the table, review what tax professionals have submitted and to hold consultations with the business community prior to making such changes in tax policy.”

Members looking for the latest information should visit: smallbiztaxfairness.ca and feel free to use or search for the hashtags #unfairtaxchanges #taxesinéquitables on social media. Another way to get involved is to join the GTA HRAI Chapter on November 1st, 2017 from 5:30 to 9:00pm where guest speaker Pierre Bonnhomme, a CPA, will talk to attendees about this very issue. Read more here.

HRAI will keep its members informed of any progress regarding these proposed tax changes. For more information contact: Scott Papp, Manager, Divisional Programs (Contractors) at 1-800-267-2231 ext. 233 or spapp@hrai.ca.