Trudeau acknowledges grumbling, but defiant on small business tax changes

OTTAWA — Justin Trudeau says he’s paying attention to the growing dissent over his government’s controversial plan to eliminate tax incentives that he insists only benefit wealthy small business owners.

But the prime minister said Friday he “will make no apologies” for the Liberal government’s commitment to helping the so-called middle class, even at the expense of the wealthiest Canadians.

Speaking to reporters in Saskatoon, Trudeau acknowledged the backlash over what the government calls proposals to inject more fairness in the tax system by closing loopholes used by a growing number of small businesses.

“We’re doing more for the people who need it and doing less for the people who don’t,” Trudeau said.

“I’m hearing feedback from Canadians that want to make sure that this does help the middle class…. I’m happy to have discussions and feedback from interested Canadians who want to make our tax code fairer and we’re going to take all of those reflections into account.”

Entrepreneurs, major industry associations, tax experts and political rivals have warned the three-part plan would hurt the economy and small businesses, including many whose owners would be considered middle class.

The potential changes under scrutiny include ending a practice that allows business owners to lower their tax rate by sprinkling income to family members in lower brackets, even if those relatives are not active in the business.

Another proposal calls for limits on the use of private corporations as a way to gain tax advantages when making passive investments in things like stocks or real estate.

The third change would limit the conversion of a corporation’s regular income into capital gains that are typically taxed at a lower rate.

The government has launched a consultation on the proposed reforms that ends Oct. 2.

Trudeau characterized the changes as being in step with his oft-repeated promise to help the middle class, even if it requires Canada’s wealthiest to “pay a little more.”

“We’re doing more for the people who need it, and less for the people who don’t. That’s the commitment we made to Canadians and will continue to make to Canadians,” he said.

“I will make no apologies for this approach.”

Opponents of the plans include a newly formed coalition of more than 40 industry associations.

The group argues that the incentives targeted by the Liberals are designed to recognize the greater risks faced by small business owners. Those include the use of their family homes as collateral against business loans and having no access to unemployment insurance.

The Conservatives have also demanded that the government allow more time for Canadians and experts to study the proposals.

The growing anger over the proposed changes has also created concerns in the Liberal caucus.

Finance Minister Bill Morneau held a conference call this week to ease the fears of Liberal backbenchers spooked after complaints over the proposals poured into their riding offices.

Morneau listened to the concerns of his colleagues and provided strategies to help them counter what he considers rampant misinformation about his plan. He also reassured them the government is open to tweaking the proposals to avoid any unintended consequences.

Many Liberals also expect the tax proposals to be a major theme at next week’s caucus retreat in Kelowna, B.C.

Just Posted

Relatives of murdered family critical of killers’ sentences

Open letter to sentencing judge criticizes ruling allowing killers to apply for parole in 25 years

City rolling out Green Carts

Green Carts used for organics, such as yard waste, food scraps and pet waste

New teaching standards applauded

New code of standards affecting teachers, principals and superintendents to kick in Sept. 1, 2019

UPDATED: Agriculture minister speaks to cattle producers

2018 Alberta Beef Industry Conference underway in Red Deer

Updated: Red Deer gets WHL Bantam Draft and Awards Banquet

WHL will holds its draft and awards ceremony in Red Deer for next three years

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Twenty years later, figure skating’s most famous backflip remains amazing (and illegal)

Figure skating involves spins, jumps, twizzles and a whole host of other… Continue reading

You don’t need to chop like a TV chef to get the job done

Standing in line at the emergency room, makeshift bandage around my finger,… Continue reading

Seychelles swaps debt for groundbreaking marine protection

CURIEUSE ISLAND, Seychelles — With deep blue waters, white sand beaches and… Continue reading

Trump endorses raising minimum age to 21 for more weapons

WASHINGTON — President Donald Trump endorsed stricter gun-control measures Thursday, including raising… Continue reading

Red Deer blood clinic in need of 600 donors

Aunt encourages Central Albertans to donate blood after losing nephew

Court considers banning diesel cars in German cities

BERLIN — A German court began considering Thursday whether authorities should ban… Continue reading

US women beat Canada in Olympic hockey; Gisin tops Shiffrin

PYEONGCHANG, Korea, Republic Of — A tense shootout, a dazzling deke and… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month