Submitted by Rick Strankman, MLA Drumheller-Stettler
The role of government in the economic development and sustainability of a free market should always be aimed towards raising the standard of living in the jurisdiction they are responsible for. Governments that foster the growth of sustainable wealth creation have proven to have a higher standard of living.
The Trudeau government is considering the most significant tax changes in decades that will directly affect family owned and operated businesses. These changes have the potential to severely harm the backbone of the economy – small family owned and operated businesses. The new proposed tax changes combined with another round of carbon taxes set to be imposed for the start of 2018, Alberta businesses will be facing completely unnecessary financial hurdles.
The proposed federal changes will make it more difficult for Canadians to income share within their own family. The changes will affect thousands of Alberta family run operations which illustrates that the federal and provincial governments have no regard for how a small business really works. Most small businesses include everyone in your family and they generally all have some level of risk; regardless of whether they’re employed directly by them or other forms of support.
Existing tax laws allow for certain types of investments that allow you to retain income in your business or a holding corporation, acting almost as if it were a savings account. These investments are important for owners who want to reinvest or grow their businesses. The federal plan calls for a dramatic increase in the taxation of business investments virtually eliminating reinvestment and hindering a businesses ability to retain emergency funds if needed.
The concept of wealth creation and reinvestment and family involvement in business is very well understood by Canadian farmers. The reinvestment that facilitates generational farms is not only a proud tradition; it is integral to the stability of the agriculture market. Many Alberta farm operations have been in existence for over 100 years while feeding the world in the process.
The most disturbing consequence of the changes will directly affect the future status of family run operations by limiting the possibility of passing down your business to your children. Despite having contributed to the business/farm their entire lives, the new changes would seriously limit the transfer.
The ability to stabilize agricultural operations is in serious jeopardy with these ill-advised federal tax change proposals. The opportunity to create wealth and stability for our families is critical to maintaining strong and free markets that will achieve economic stability. The average person’s time in the workforce is a time to create the wealth that will allow them to sustain their families and themselves.
Taking a market-friendly approach where government concentrates its efforts on allowing markets to operate organically (supply and demand) rather than imposing unnecessary taxation, will go a long way to allowing markets and businesses to sustain themselves. The assets of Canadian family owned businesses and the legacy left to the heirs is fundamental in the long-term success of the Canadian economy.