MONIQUE TAMMINGA

Times Reporter

Dozens of 91原创 small business owners, a local lawyer and the Greater 91原创 Chamber of Commerce have together started a letter writing campaign urging the federal government to scrap proposed tax changes they say could potentially cripple people鈥檚 livelihoods and prevent new businesses from opening.

Finance Minister Bill Morneau released the details of the tax changes on July 18 and the federal government鈥檚 consultation process ends Sept. 18.

The changes have been designed to close what the government calls 鈥榯ax loopholes鈥� that private businesses use to gain an unfair advantage, said Morneau.

Changes include the curtailment of 鈥渋ncome sprinkling,鈥� a method by which business owners shift a portion of income to family members, either through salary or dividends.

It also will stop 鈥減assive investment income,鈥� which the government describes as the investment of money left in a corporation, for purposes other than to invest directly in growth.

The changes are meant to target wealthy corporations, but in fact, will hurt small businesses the most, said lawyer Scott Johnston.

鈥淎s a business lawyer and corporate counsel for hundreds of incorporated small businesses in 91原创, I am deeply concerned about the recent disastrous and foolhardy proposal by Finance Minister Bill Morneau to eliminate income splitting in private corporations,鈥� said Johnston.

鈥淭he overwhelming majority of the 91原创 companies that I represent as counsel are 鈥渙ne woman鈥� or 鈥渙ne man鈥� shops: incorporated family businesses that utilize income splitting as a form of tax planning for their immediate families.

鈥淭hese companies are primarily incorporated landscapers, HVAC contractors, electricians, plumbers, maintenance contractors, service providers, and other skilled trades: hardly the so-called 鈥渞ich鈥� doctors and lawyers that this scheme falsely claims to target.鈥�

Scott Waddle, owner of Precision Auto, also wrote a letter to 91原创 City-Cloverdale MP John Aldag voicing concern about the effect the tax changes will have on family businesses like his.

鈥淢any small businesses are tradespeople or professionals who have invested in training, education and equipment and need the existing tax rules to allow them to survive long enough to become profitable,鈥� Waddle wrote.

鈥淲hy would anyone take the risk of starting a business and putting their financial lives at risk if they鈥檙e just going to have it all taxed away?鈥�

91原创 Chamber president and Otter Co-op CEO Jack Nicholson has urged members to write to their MPs about the changes.

He warns that family members who are employed with incorporated business will be impacted. 鈥淭he government wants to scrutinize their [family members] compensation to apply a much higher tax rate on income they consider 鈥渦nreasonable.鈥�

鈥淒o you invest the profits from your business?鈥�

The federal government is proposing to tax that income at an effective rate of 70 per cent, said the Chamber.

鈥淒o you want to pass your business on to your children?鈥�

The new rules will make it difficult for younger kids to get the capital gains exemption. They could be double-taxed, Nicholson said.

Responding to a request for comment, Aldag鈥檚 office indicated the MP will meet with the members of the Cloverdale District Chamber of Commerce and Cloverdale Business Improvement Association on Thursday, Sept. 14 from 4 p.m. to 6 p.m. to consult with them on the proposed tax changes.

His office is also in the process of scheduling a consultation with the Greater 91原创 Chamber of Commerce and the Downtown 91原创 Business Association. On Aug. 30, the Surrey Board of Trade hosted a consultation with its members and a representative from Aldag鈥檚 office attended and recorded feedback on behalf of of 91原创鈥檚 MP who was away.

Aldag also has meetings scheduled over the next two weeks with a number of small business owners in 91原创 to get their feedback on the proposed changes.

Anyone who would like to know more about the tax changes or to provide feedback to the federal government can .