NSBA Response to 2018 Federal Budget
NSBA disappointed that the government persists with changes to passive income legislation.
Yesterday, the Finance Minister, Bill Morneau, unveiled the 2018 Federal Budget, including clarifications regarding the passive income proposals first contemplated in the 2017 Budget and introduced to the public in July 2017. The NSBA is disappointed that the government is persisting with changes to passive income legislation and adding further measures that have the effect of removing significant amounts of capital that would have otherwise been used to improve economic growth in Canada.
The NSBA is also disappointed to note that the government continues to ignore the feedback of the business and professional community that has widely denounced the proposed changes. These changes simply add to the uncertainty that is paralyzing for small businesses that survive on small margins and encourage new tax planning measures to avoid being penalized under the new regulations. The NSBA notes that the federal government anticipates revenues of $2.33 billion arising from these changes over 5 years.
“In addition to punishing those who have invested wisely under the current rules by not grandfathering existing investments, the measures announced in the budget only serve to make the system more difficult for small businesses,” says Keith Moen, Executive Director of the NSBA. “These new measures applied on top of the previously announced $50,000 threshold will only make the tax system more complex. This is the opposite of what businesses asked for when changes were first proposed.”
The NSBA continues to advocate for a comprehensive review of Canada’s income tax rules with a view to simplifying and bettering the system for businesses and individuals alike. The NSBA believes that a comprehensive review will lead to a better outcome than the proposal-by-proposal approach and lack of true consultation that the government has used so far, and seems intent on continuing, when trying to enact tax changes that affect small businesses in Canada.
Additionally, the NSBA has long been a proponent of balanced budgets and is discouraged to see that the federal government is not taking steps to move the nation’s budget back to a balanced position by 2019, as promised in the 2015 election. The NSBA believes that this represents irresponsible stewardship of our country’s financial future, especially in an uncertain economic time that offers no certainty of improved performance over the long-term.
“It is extremely troubling that the government does not see fit to capitalize on the economic stabilization that we’ve had to move towards a balanced budget,” says Mr. Moen. “With NAFTA being renegotiated, an uncertain trade future with China, a burdensome regulatory process stalling the export of Canada’s resources, and corporate tax cuts in the United States we believe that the government should not continue the practice of running needless deficits when there is potential in the future for such deficits being truly unavoidable and possibly necessary.”
About the NSBA: The NSBA is a member-driven and focused business association in Saskatoon that serves, promotes and protects business throughout Saskatoon and beyond. The NSBA has recently rebranded to be known simply by its acronym – NSBA – to reflect its current membership which has grown considerably beyond Saskatoon’s north end. The NSBA has developed its mandate and reputation by being a relevant, topical and effective organization that interacts with all levels of government and industry on a variety of issues for the betterment of our local economy.