Red Deer Rotary Club members raise their hands indicating concern about proposed tax law changes, as related by tax lawyer Jason Stephan, at front by screen. (Photo by LANA MICHELIN/Advocate staff).

Central Alberta’s small businesses would be slammed by proposed new federal tax law, says lawyer

Jason Stephan tells Rotary Club members to write to Liberal MPs

“Punitive and destructive” federal tax changes would hit Alberta’s small businesses disproportionately hard, predicts a Red Deer tax lawyer.

Jason Stephan, a lawyer with CA Tax Law, urged small business owners at a Rotary Club meeting on Monday to bone up on a controversial new law that would “dramatically” increase taxation on up to 150,000 small Alberta businesses.

Small businesses need investment to grow — especially in the cost-heavy natural resources field, said Stephan.

Since many foreign investors are already being discouraged from investing in Alberta because of our provincial carbon tax, higher corporate tax rates on profits, and government pipeline policies, the door should be opened to more local investment in resource companies, he added.

But under the new tax changes proposed by the federal Liberal government, private businesses that invest in other private businesses would be levied up to a 70 per cent tax on profits. Where’s the incentive for them to invest and help other businesses grow? Stephan questioned.

“Essentially, they would be punished for investing in other businesses.”

Stephan urged concerned Rotary members at the Quality Inn, North Hill to write to the federal finance minister and to all three Alberta Liberal MPs with their concerns. He stressed that the window for public feedback is less than two weeks, since the proposal was introduced mid-summer and flew under the radar for many business owners.

The federal government laid out a three-part plan to eliminate what Ottawa calls tax loop holes for wealthy small business owners. This seems good, said Stephan. But the government’s definition of “fair” is highly selective, added the lawyer, who spoke at the meeting along with Aina Potts, a business advisor with MNP Tax Services.

Stephan feels Prime Minister Justin Trudeau was badly advised.

Included in the proposal are measures limiting the use of private corporations to make passive investments in stocks or real estate and limiting a corporation’s ability to convert income to capital gains. (Capital gains are usually taxed at a lower level, which has been referred to as a “income-sprinkling” loophole). There are also measures to impede business owners from transferring corporations to family members.

Some business owners are concerned about this impacting the inter-generational transfers of businesses, making it more attractive to sell a business to strangers than their children.

Local commercial realtor Glenn Moore said the government should be helping small business owners create employment to keep Canada’s economic engine humming. The changes proposed appear to do the opposite, he added.

Just Posted

Finishing touches being put on Servus Arena

The finishing touches are being put on Red Deer newest arena. On… Continue reading

New temporary beds will immediately help Red Deer homeless

The 20 new temporary beds approved for Safe Harbour’s warming centre cannot… Continue reading

Red Deer RCMP are seeking man posing as a police officer

Suspect is large, in his 30s, with red hair and beard

Update: “Someone knows something” – police

Motorist dies near Ponoka after loose tire collides with vehicle near Ponoka

Two facing dozens of weapons charges in court

A man and woman were arrested last month after RCMP searched a residence and storage locker

Red Deer police seize rifles and shotguns from storage locker

A man and a woman facing nearly 200 charges after 29 firearms seized last month

Notley criticizes MLA who fired staffer after sex harassment complaint

Notley says if Jason Nixon was her house leader he’d be out of a job immediately.

Red Deer needs to find a solution to syringe debris: city manager

City will consider the problem during the 2018 operating budget talks

WestJet Christmas video turns children’s wishes into reality

This year’s annual video took a new spin on the 12 days of Christmas

VIDEO: Replay Red Deer Dec. 10

Watch news highlights from Red Deer and Central Alberta

VIDEO: B.C. to end geographic area rent increases, close fixed-term lease loopholes

Both clauses allowed landlords to raise rents above the max annual allowable rent increase

UPDATE: Train hits hydro pole, causes outage near Deltaport

No injuries reported but traffic in and out of Deltaport is blocked

A Red Deer daycare coordinator wins provincial award of excellence

Nicole Morrell is a coordinator at Johnstone Daycare

Holiday shopping season picking up in Red Deer

With 18 shopping days left until Christmas, Red Deer businesses are cautiously… 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