Overhaul Canadian tax system but leave small businesses out of it: finance committee

OTTAWA – The Liberal-dominated House of Commons finance committee is recommending the us government “provide targeted support” to regions battered by low commodity prices, and consider overhauling Canada’s tax system – although not touch current small-business tax rules.

The committee, in its budget recommendations tabled Friday, also calls around the government to look at reinstating the Kingston Prison Farm program and consider additional prison farms at other locations.

Prime Minister Justin Trudeau and the Liberal government have promised they will evaluate the small-business tax rules to make sure higher-income Canadians aren’t abusing the machine as a way to lower their tax bills.

But small-business owners as well as their main lobby group happen to be pushing back in front of the March 22 budget.

Dan Kelly, president from the Canadian Federation of Independent Business, addressing 109,000 small and medium-sized businesses, told the committee in mid-February that his group was “a tiny bit freaked out” the federal government was considering clawing back access to the small-business tax rate for many professionals, that could include doctors, dentists, chiropractors, accountants and lawyers.

It appears their message resonated using the committee members, who are urging the government not to tinker using the tax rules.

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The committee recommends “the federal government not make any changes to the current federal taxation regime and other rules as they apply to small businesses, including professional businesses, incorporated as Canadian-controlled private corporations.”

Liberal MP and committee chairman Wayne Easter tabled the panel’s final pre-budget consultation report Friday in the home of Commons, following a marathon session of meetings in February that saw the committee hear from 92 witnesses and get an additional 175 written submissions from individuals and groups.

It might be past too far to include a few of the recommendations in a federal budget that will be delivered in less than fourteen days, however the report provides interesting understanding of what Liberal MPs, who hold a majority around the committee, want their government to include in your budget.

The committee can also be urging the government to produce a comprehensive overview of Canada’s tax laws to make the system “simpler, fairer and more efficient.”

The authorities should also provide “targeted support” to regions experiencing “the most unfortunate effects” from the low Canadian dollar, low oil and other commodity prices, and slow development in emerging markets – no doubt a reference to hard-hit energy producing provinces like Alberta, Saskatchewan, and Newfoundland and Labrador.

The government should focus these supports in areas that “would come with an immediate impact in creating jobs and assisting anyone who has lost their jobs,” the committee said.

Other finance committee recommendations include:

Examine reopening the Kingston Prison Farm and consider additional prison farms in areas. The former Conservative government turn off the nation’s six prison farms, which saw about 300 inmates across the nation assist with such things as milking cows and producing food for local communities;The government should launch research and implement an airplane pilot project “consistent with the concept of an assured income;”Address the “negative impacts” of the Temporary Foreign Worker Program on certain sectors, including livestock and fish processing;Boost funding in several areas, including: airport security screening, food safety, First Nations education and h2o, the CBC/Radio-Canada, and tourism marketing;Launch a national transit strategy with predictable long-term funding, along with a national auto strategy that will keep current assembly plants open in Canada and attract brand new ones; andPursue the feasibility of the universal, national prescription drug program that has been enhanced investments home based care.

In an additional report, the Conservatives on the committee said the present economy “may justify limited measures to boost growth,” but the spending ought to be targeted toward “depressed regions and economically productive infrastructure projects.”

The Conservatives urged the federal government to obtain its fiscal house in order, “prevent runaway borrowing” and steer clear of structural deficits.

“We are very concerned there will not be sufficient fiscal prudence included in the upcoming federal budget,” the Conservatives wrote in their report.

The NDP, in its supplementary report, said the Liberal government “cannot hide behind the economic situation to reduce Canadians’ expectations before tabling your budget and backtracking on its promises.”

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