The consultation period on proposed tax changes is coming to a close on October 2nd, many businesses and communities are speaking out. The Canadian Department of Finance claims the plan involves taking action to improve the fairness of Canada's tax system by closing tax loopholes.

"I have to think that we're going to see some sober second thought on the part of this federal government now to back down on these provisions," says Lyle Stewart, Provincial AG Minister. "I hope that they don't just water their bill down a little bit and try to sell it all over again, that would not be adequate, this has to be stopped."

 

The Canadian Government says they plan on adjusting a couple main factors when it comes to taxation. "Income sprinkling" applies to private corporations who take their income and spread it throughout their family to get larger tax breaks. Income sprinkling is in many cases is a legitimate way to compensate family members for work on farms. Passive investment income is another side to the tax changes, by retaining a passive investment in a corporation, they are not encouraging the growth of a business but shielding their investment from a higher personal tax rate. This change is believed to potentially discourage business investments and hurt the economy. Capital gains will also be altered. If a private corporation converts their income into capital gains, they also recieve a large, thought to be unfair tax break.

 

The governments end goal is to cut middle class taxation while raise taxes on the wealthiest one percent. To enhance the integrity of taxation in Canada and use a system that is fair to everyone. This will also hopefully lead to less tax evasion and improve tax compliance.

 

A number of groups across the country see flaws in the plans and are still speaking out against the proposed changes.

 

"We think the changes proposed are really going to negatively impact our local business and small businesses by a few things: by raising taxes, reducing the incentive for private investment and increasing administrative burden and creating additional challenges to those intergenerational transfers of business and especially to family members," says Twila Walkeden, Manager of the Weyburn Chamber of Commerce.

 

Whenever changes are made to taxes there are always questions and concerns, however, with the consultation nearing its end lots of groups like family farm operations, small business and physicians are still hoping for a change for the better.

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