Small businesses are the backbone of the Canadian economy. They make up 70% of our private workforce and employ over eight million Canadians. Yet, they can’t seem to catch a break with this Liberal government. First, the Liberals broke their election promise to reduce the small business tax rate to nine percent and then they imposed a Canada Pension Plan premium increase which will reduce the opportunity for small businesses to hire more employees.
If all of this wasn’t bad enough, the Liberals are now going after some small businesses for being too “small”. If a business has less than five full-time employees, the government can arbitrarily decide that the work that they do isn’t “active”. Then, they are no longer eligible for the small business tax rate and are forced to pay more than three times as much tax as other small businesses.
Take a campground, for example. As campgrounds are seasonal businesses, most operators have less than five year-round employees (in fact, most are family-run). The Liberal government has decided that running a campground is “passive”, meaning that their income is solely derived from rent, like an apartment building.
Yet, if you’ve been to a campground, you’ll know there’s a lot of work to be done there. Campground owners wear many hats: they are landscapers, janitors, accountants, and security guards. They make sure they provide a safe, clean, and fun atmosphere for your family to explore the outdoors in.
Owners of mini-storage facilities and small commercial properties are also being hurt by this unfair Liberal interpretation. I stood in the House of Commons last fall to ask the Minister of National Revenue why her government was punishing these small businesses and she simply replied that small businesses need to pay “their fair share” of tax. However, paying three times as much tax as other businesses isn’t very fair.
What is even more worrisome is that the government made their interpretation retroactive and many businesses have received hefty bills from the Canada Revenue Agency. If they’ve decided that campgrounds, mini-storage facilities, and small commercial properties are not “active” businesses, what will stop them from expanding this to other small, family-run businesses?
Punishing some small businesses for the crime of being too “small” is extremely unfair to the hardworking owner/operators who are just trying to make a living. The Liberal government needs to start helping small businesses instead of crippling them with taxes.
