Proposed tax changes harmful to small business and rental housing
The Liberal government was elected in part on a pledge of wealthy Canadians paying their fair share of taxes, and giving some tax relief to the middle class. What is being proposed in the way of federal tax changes is not that. What is proposed is uncertain and is largely directed at small business owners.
Small business owners employ 70 per cent of private sector workers in Canada. One has to struggle and invest to make it work. If it doesn’t work it can mean bankruptcy for the business owner. Small business owners often have no days off, benefits, or are wealthy. For the Liberal government to say small business owners are getting away with tax loopholes is unfair.
A rental housing business, if it has less than six full time employees is called passive and taxed federally at 46 per cent. Numerous changes since the 1970s have overly taxed the rental housing sector and is the reason why there is a shortage of rental housing today.
Proposed is increasing the tax on money kept within a business, also proposed is increasing the tax on money taken out of a business. Additional taxation will increase the already run down rental housing stock and the lack of investment. Rental housing supply is best dealt with by private sector investment, not government programs. Increasing taxation on small business, including the rental housing industry, would not be beneficial for Canada. Being vocal and voting based in part on this issue can sway policy.
Taking away the small benefits business owners have in tax planning will result in increased cost of doing business. Inevitably, these costs are passed along. Small businesses will lose competitiveness and eventually there will be no point in taking the risk in creating a small business. Who will be Canada’s major employer then?