Ottawa's CATA calls for ‘reset button’ on feds’ business policies

JohnReid
CATA CEO John Reid.

Spurred by backlash to the federal government’s proposed tax changes, the Canadian Advanced Technology Alliance has launched a campaign calling for the government to pause and reset its priorities on small business- and startup-focused policies.

Ever since they were unveiled in July, Finance Minister Bill Morneau’s proposals have been the subject of criticism from doctors, farmers and members of the technology community who insist the proposals are misguided.

The federal government claims the proposed changes to the tax plan, which include penalizing small business owners who use tax planning procedures such as income sprinkling, are meant to target only high-income earners who take advantage of “loopholes” in the tax code.

But members of Canada’s tech sector have fired back at those claims, insisting the government’s proposals will hurt entrepreneurs and small business owners by treating them the same as their employees. Numbercrunch founder Susan Richards told Techopia Live’s tax panel the changes would discourage entrepreneurship and people who are willing to take risks to build businesses.

“They put a lot on the line. At the end of the day now, they have followed best practices … now we’re in a situation where those best practices that they have followed will be negated. It questions fair play,” she said.

With the 75-day consultation period on the proposed changes nearing its end, CATA’s advocates are asking both sides of the discussion to “press the reset button” and take more time to think through what alterations are necessary to the tax code.

“If we keep going down this path, we’re going to end up with more animosity than ever,” said Dan Wasserman, an author and entrepreneur with experience in Canada and the United States, in a video launching the CATA campaign.

“If we could look at things dispassionately, sit down with both sides at the table and work out a new, appropriate tax regime that is good for Canada based on what our costs are, then we have a real upside,” he said.

Mr. Morneau is showing signs of easing on specific measures in his new tax plan. Speaking to a recent parliamentary committee, he suggested there would be “technical fixes” to allow for family succession of farms, a key concern in the agricultural industry.

He said he is open to adjusting his proposals after the public consultation period ends next week, and suggested that critics have spread misinformation about how the proposed changes might affect particular groups.

John Reid, CEO of CATA, is urging Mr. Morneau’s boss to reconsider the coming changes to the tax regime.

“We are asking Prime Minister (Justin) Trudeau, in his public appearances and on social media, to press the reset button to improve Canadian business growth, entrepreneurship and innovation,” Reid said in a statement.

“It is a conversation that should be the top headline for all Canadians, and the prime minister’s role is to make it so.”