We’ve been hearing from our members on a daily basis on this issue. The response is unlike anything we’ve seen at our chamber in recent memory. What’s being proposed by Minister Morneau is going to affect business of all shapes and sizes, in all industries and they are afraid for the future of their businesses and their livelihoods. In short, our members tell us that these proposed changes are the greatest challenge they’ve faced regarding the viability of their businesses throughout their careers - for decades in some cases.
When businesses lose, so does the middle class. Business owners that are affected by these changes will, quite logically, take steps to protect the continuation of their business, their livelihood, their families, their retirement, their rainy day fund. This may mean fewer jobs, fewer hours for employees, less disposable income for charities and community organizations - putting further pressure on the country’s social safety nets. Small business owners are the engines of our communities - these proposed changes will hurt their ability to contribute and disincentivize the next generation of entrepreneurs - not a “fair” outcome for anyone.
Business people have also been quite willing let the government know about their concerns, writing letters, posting on social media, and making phone calls by the thousands.
By the time that Bill Morneau arrived in Fredericton on September 23rd for the Canadian Chamber of Commerce’s annual meeting (joined by MPs Matt DeCourcey, Karen Ludwig, TJ Harvey and Alaina Lockhart for his subsequent news conference), the business community’s message had clearly been received by the government, despite their unending loyalty to their talking points.
This unwillingness of Minister Morneau to have an actual conversation about the proposals - despite the perfect opportunity with President and CEO Perrin Beatty of the national chamber - instead relying on a handful of pre-programmed responses for every situation, has damaged his credibility with the small business community, likely beyond repair. So when the federal government started to markedly shift their tone days later (from “we’re not backing down” to “obviously there’ll be changes”), there was no reason for the business community to trust the minister’s sudden change.
Minister Morneau recently articulated five principles that have been identified to move forward with some changes: support small businesses; keep small business taxes low while supporting owners who invest and create jobs; avoid creating unnecessary red tape for small businesses; recognize the importance of family farms, and ensure tax changes do not affect the transfer of family businesses to the next generation; and ensure any changes to the tax system promote gender equity. While we certainly have no argument with these, it is a great concern to the business community that these most basic of economic principles were not top-of-mind for the government from the very beginning. One of the most common comments I am hearing in the post-consultation period is “what were they thinking”? Given that the minister is only now turning his mind to these principles, I’m not so sure.
We encourage the federal government to go back to the drawing board. The business community has been calling for a comprehensive tax review for many years. Tax policy in Canada is too complicated and compliance is too costly - these proposals will make it far worse in both regards. This should not be surprising, cherry-picking tax policy for political reasons has no other possible outcome than making a bad situation worse. October 2nd was an arbitrary date picked by the federal government to attempt to shut down consultations - it is now more important than ever that business owners continue to let the government know how concerned they are for their businesses, their employees and communities.
Krista Ross is CEO of the Fredericton Chamber of Commerce. With more than 950 members, the Fredericton Chamber of Commerce is one of Atlantic Canada’s largest chambers of commerce. A dynamic business organization, the Fredericton Chamber of Commerce is actively engaged in policy development that affects the competitiveness of our members and of the Canadian business environment. It’s vision is "Community Prosperity Through Business".