February 13, 2018

Coalition for Small Business Tax Fairness reacts to the federal government’s revised tax proposals

Tax & Finance Advocacy, federal Pre-Budget

While Canada does have high potential for innovation and competitive success, we are but a small fish in a big interconnected pond. We cannot afford to be out of sync with major trading partners. When we change the risk to reward ratios through legislation, as we are doing today in a negative way, investment capital and talent pools will decide that other geographies are more attractive to do business. (CATAAlliance, member, Coalition for Small Business Tax Fairness)

++ Action Item: Please download the letter and supporting research below (pdf) outlining the advocacy position of the Coalition for Small Business Tax Fairness on the federal government’s revised tax proposals. CATA is a key member of this one voice coalition.

This advocacy on your behalf was submitted to the Minister of Finance, the Hon. Bill Morneau and we will be following up with meetings with key officials. 

Russ Roberts, Sr. VP, Advocacy, Tax & Finance, CATAAlliance, is keynote panelist on Tax Reform at the Canada Club event on March 1st in Ottawa.

If you have tax and/or innovation guidance for us, please contact CATA CEO, John Reid at jreid@cata.ca and we will help advance as part of the advocacy.

Coalition for Small Business Tax Fairness feedback on revised tax proposals

Download Copy of the letter (pdf)
Download Appendix A: Income Splitting Examples (pdf)
Download Appendix B: Who Has the Advantage? $150,000 – Updated (pdf)

Dear Minister Morneau,  

We are writing on behalf of the Coalition for Small Business Tax Fairness. Together, our organizations represent hundreds of thousands of independent businesses, professionals and taxpayers, across all sectors of the economy and all regions of the country that employ millions of Canadians. We are writing today to raise concerns regarding recently announced changes to income sprinkling rules for families and upcoming changes to passive investment rules…

Conclusion and Recommendations

Given the complexity of these proposals, more analysis and consultation is needed to fully understand the effect on the small business community. We are committed to working with the government to continue to find solutions that don’t negatively affect the small business community’s ability to grow and prosper. We therefore recommend:

  1. Immediately undertake an economic impact assessment of the package of proposed changes and delay new rules until this assessment is complete.
  2. On income sprinkling:
    • Postpone the enforcement of the changes until, at the very least, January 1, 2019. Business owners need more time to fully understand the new rules.
    • Provide a full exemption for spousal income and dividends from the new income sprinkling rules.
  3. On passive investmentDo not proceed with the proposed passive investment rules.
  4. Undertake a comprehensive review of Canada’s income tax system.

Signed by all Coalition members

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Contact: CATAAlliance at info@cata.ca, tel: 613-699-8209, website: www.cata.ca, tags: Innovation. Leadership, Entrepreneurship, Advocacy