Canadian Entrepreneurs Are Crippled by Biased Tax Laws

Alshaar Ansari
Alshaar Ansari Politics News
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A number of tax changes have been rolled out by the federal government in Canada that seem to be preferential to certain sectors and discriminatory against others. The ruling, however, has been condemned as arbitrary and politically motivated, creating doubts about the commitment of the government towards fostering an enabling environment for entrepreneurs.

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One such change is included in the recent federal budget: proposal to increase the inclusion rate on capital gains for companies and some individuals from one-half to two-thirds. This implies that businesses will now be taxed on two thirds of their capital gains earnings. For individuals, however, this only applies to any additional capital gains above $250 000. On the face of it however while this may appear insignificant; other initiatives under this budget include a new program known as Canadian Entrepreneurs’ Incentive which provides more favorable tax treatment for small business owners selling their corporations.

But what’s not there is a wide range of industries including restaurants, hotels, arts and entertainment or professional services like doctors’ offices and small accounting firms among others where it won’t apply. This selective approach has made many people angry because they think it is unfair as it appears that winners and losers are chosen at random.

These choices have angered Dan Kelly who is Chief Executive Officer (CEO) at Canadian Federation Corporate Business (CFIB). “We’re trying to figure out how many economic development policies you can have within a business community,” he said. “Whereas an automobile mechanic’s inclusion rate will be 1/3rd, a hair salon will enjoy 2/3rd inclusion.”

Our latest poll on the Scoop Canada YouTube Channel delved into the pressing question of whether Canada should reduce its income tax rates to boost economic growth. The findings were remarkable, with nearly every participant endorsing the idea. Join the ongoing discussion on our Scoop Canada YouTube channel and share your opinion by casting your vote here to have a say on this critical matter!

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It has raised eyebrows that these industries were among those hardest hit by Covid-19 yet they’ve been left out in regard to Canadian Entrepreneurs’ Incentive. It seems like these businesses that struggled during pandemic lockdowns would be penalized even more with higher taxes.

Also economists argue that this decision by the government to increase taxes flies in the face of its stated goal of improving productivity via encouraging business owners to invest more in companies. Rebekah Young, a vice president at Bank of Nova Scotia, criticized it calling it “punitive approach to corporate taxation” and further warned that these measures would result in the transfer of substantial amounts of corporate capital from balance sheets to government coffers.

The small-business community’s response was loud and instant. He expects that some business people who now have increased tax bills are going to force the government to make changes through their lobbying, “We’ve got line-ups of sectors screaming and yelling with pitchforks,” says Mr. Kelly.

Business Owners In Canada Are Taking Legal Actions Against Justin Trudeau

It has been argued that through such a move, the government is not committed towards creating an equal platform for all entrepreneurs. Following the release of federal budget, however, Canadian small businesses are grappling with uncertainty and perceived injustices as they feel left behind with a system that appears stacked against them.

Last Updated on by Alshaar Ansari

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