Feds refuse to back down on proposed tax changes

Farmers hoping for changes to federal tax proposals got little relief from Finance Minister Bill Morneau and Prime Minister Justin Trudeau last week.

The government’s apparent decision to stay the on course on tax revisions has left many tax planners pessimistic that the federal proposals can be substantially modified before they are implemented.

“Morneau and Trudeau seem to be doubling-down on the inflammatory rhetoric,” said Greg Gartner, a Calgary farm tax lawyer with Moodys Gartner, in an interview Sept. 15.

“I was giving them the benefit of the doubt until this week that this was mere ignorance.”

In an opinion piece provided to The Western Producer and in an interview on CBC radio, Morneau expressed sympathy and support for family farms, but did not back down from the tax proposals involving income splitting, capital gains taxes and cash kept within farm corporations.

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“I want to reassure Canada’s farm families, this isn’t about you,” wrote Morneau. “Hard-working small business owners, including family farmers, are not the focus of these changes.”

Farms that save cash within an incorporated farm to make future purchases of land or equipment will not be affected, he pledged.

“We will make sure these activities are not impacted. Period.”

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However, Morneau didn’t back away from plans to reduce income splitting for people who cannot demonstrate “legitimate work” on the farm.

As well, he reiterated the government’s desire to clamp-down on tax-free land transfers to non-farming children.

“We do, however, propose to prevent the use of complex transactions designed to circumvent existing rules restricting the conversion of income (dividends) to capital gains,” said Morneau about the capital gains proposal.

Trudeau didn’t seem dissuaded from the proposals by a nationwide surge of outrage from small businesses, including virtually all major farm organizations.

“A lot of people have realized that these changes will take away benefits from wealthy folks,” said Trudeau in an interview on CBC.

“A lot of those wealthy folks are really fighting to keep those benefits that they have and they’re really making a lot of noise.”

While the federal government appears committed to the proposals, concerns are being raised form within the party and among backbenchers over the backlash that has arisen following the surprise summer announcement of the tax changes and the brief period set aside for comment.

“The communications was just God-awful,” Liberal MP, Finance committee chair and former farm leader Wayne Easter told The Globe and Mail.

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“Whoever drafted that doesn’t have a clue about the amount of effort that goes into being a small business or how it’s established.”

Other backbenchers have also spoken out.

A coalition has been formed to fight the proposals. As well, on Sept. 18 a new coalition formed and announced it was backing the government’s proposed reforms.

Gartner’s firm has held seminars on what the changes could mean for small businesses and farmers and he said nothing he has seen or heard has alleviated his concerns.

“How is a prairie (family) farmer supposed to compete?” said Gartner about rules that favour communal organizations like Hutterite colonies and land aggregators like pension plans in buying farmland.

“All this is doing is making a bad situation worse.”

The federal NDP has said little about the situation, but the Conservative party has been relishing the public outrage. The Conservatives are able portray the Liberal plan as an attack on struggling small businesses, entrepreneurs and families.

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  • Jackie Miller

    I am farmer, small business owner. We worked 12 – 16 hour days, 7 days a week for YEARS!! No holidays, weekends just another work day…raised 3 children who are all small business owners, ranchers too. They also work far more than the 36.5 hours a week that the union government worker does..don’t get paid sick days, UIC, pension etc etc. Worry all the time about making the bank payment. Watch their crop & pasture burn up because of a dry year, re finance & get off farm job to keep going. Sorry Trudeau & Morneay, you JUST DONT HAVE A CLUE!! Your legacy will be that of destroyers. Your tax policy will destroy Canada’s economy & cause massive unemployment not to mention doctors will go where they are appreciated for their years of sacrifice & study, your divisive political rhetoric will destroy Canada’s identity, your carbon tax & failure to support our oil industry will kill even more jobs. The people who actually create the wealth & those who feed you are feeling unjustly vilified. CONGRATS ON A JOB WELL DONE…DESTRUCTION!!

    • Hoopsopinion

      Which of these proposed tax changes will affect you and specifically how will it affect you?

      • Harold

        I’m wondering why you don’t know the answer to your own question.
        Extra tax is an extra burden atop of the burdens that Jackie already has. The extra tax is taken from Jackie’s profits reducing spending power. A reduction in the public’s spending power causes business failures and job losses. Job and business losses increase government social programs expenditures creating a need for more taxation. More taxation is taken from the public’s profits further reducing spending power and the ball keep rolling. If you fly the NDP and now Liberal flag, this outcome is perfectly acceptable; we all work obediently and penny-less as a family for the government and the government in turn gives us our earned allowances. It is appropriate to thank “mommy” afterward.
        It seems that the conservatives like Jackie and I (and I don’t mean the useless and dull minded Conservative Party) would rather fashion ourselves to be the Adults instead, and the politician as intended; a servant – not a boss. What Jackie has said is exactly what you’d say to a servant when criticizing their work. Society needs more Adults and Adults are the title of those who are engaged in adult, not childhood behaviors.
        Jackie is offended and so am I.

        • lollypoppery

          Harold, Jackie as an active farmer would pay little if any tax, personal or corporate year after year if they so choose and most do. A lot of favourable tax tools to farmers to manage income, so your points don’t hold much water. That said, the real concern for farmers would only be in regards to succession planning which the government says they intend to preserve. We will see.

          • Harold

            If there were no government, what would succession planning look like? Hold the “water” that I am lacking; is government the brains and means of all things possible? If so – you are what exactly; a slave? I do understand your narrow scope, and your narrow scope is very telling. Jackie’s cup doesn’t “hold much water” either, and that is because the government is continuously and arbitrarily drinking from it.
            “They so choose”, you say. When you are arbitrarily offered an option A or B by an authority that holds a power above your head – you are not engaged in choice making, you are involved in a self-compromise, and in between two burdens. A true choice contains option C – “none of the above” – forcing the government back to the “drawing table”. When you define your own will and then give it to a servant to enact, it is called: making a choice – and the government gains no option A or B. Furthermore, the government, with your money that they have previously collected from you, they wave it back in your face so that the option C is never considered or even offered, while the other hand is extended demanding more money; it is the old proverbial “carrot on the end of the stick”; clearly It works. They coerce the money out of your pocket – charge you the handling costs – then they give a small fraction of the money back, and perhaps you think that the government has done you some sort service or favor by doing so. Across the floor, we bring our money to the Bank, and they loan it out, crate bond pools, and etc, and make billions in profit, and atop, they charge you for bringing them the money to do so; another favor? Government, Banks, and the National Debt: do you truly think that they are looking after your/our MONEY?
            The government’s only resource is YOUR MONEY and YOUR MONEY empowers them to work with you, or against you, and if you will not stand up and preserve your own money, do you honestly think that the government will? Have they?
            Does the government “hold much water”? As Einstein said, there are two things that are infinite; the universe and human stupidity. The last time that I had checked, there were human’s running the government and now I see you on bended knee, at the level necessary to kiss the back side of our beloved politician.

        • Hoopsopinion

          I am just trying to find out the difference between the rhetoric and the truth. Apparently you are more interested in the rhetoric.

          • Harold

            Rhetoric – is the art of using words effectively in speaking or writing, and truth – is the quality or state of being true.
            Hopefully I’ve helped you in your “trying to find out the difference”.

        • Hoopsopinion

          http://ipolitics.ca/2017/09/20/tax-inequity-is-a-problem-the-numbers-prove-it/
          All that I ask for is tax fairness. What about you?

          • Harold

            Thanks for asking. How do you define Tax fairness? Tax fairness is a “nothing burger” term that can never be satisfied, giving the government the ability to do as it pleases. A thousand people will give you a thousand different opinions of what fairness is leaving the government in a position to determine what fairness is on their own. Fairness puts the public into a deep sleep and into la la land. Fairness is a mind control technique taught to children in school and home to give authority to the administration/parents. The individual child is not asked what the definition of fairness is and when the child does assert their own belief (it’ not fair) they are told that they are incorrect and they must follow the doctrine of the institution. The government is clever pretending they care and giving the public their “nothing burger” terms. These days you can put nothing in and get gospel out. Why don’t people examine their terms for content? We are not in school anymore so take the word fairness and throw it in the garbage or use it as an alternate term for a carnival. Simply, fairness is as individual in interpretation as DNA is. Thanks for hanging on. Everybody wants what you want; tax legitimization. Boom; now who is in focus and in the hot seat; me? Where does the term Tax fairness place you; la la land? You decide. I’ll leave you with a quote from Micheal Hart: “Politicians are throwing money that they do not have at a problem that does not exist in order to finance solutions that make no difference.”

  • ed

    Well, I do agree with the hell that Wayne Easter and some other backbenchers are raising over this issue, but that being said I do find it odd that farm groups and farmers that did not fight for the price positive CWB selling cartel would actually fight this issue now. Maybe after lossing $4 Billion annually on wheat and barley sales without the CWB, they are finally realizing and waking up to the facts that in ag. you have to fight for everything. If that change away from the CWB was a good one for farmers, you probably would be finding very little push back on this issue either. The lack of income is really coming home to roost now and will continue. Who will help us. Crying wolf doesn’t work.

    • Harold

      “Who will help us. Crying wolf doesn’t work”. It is not the government that we are waiting for; we are waiting for the people to arrive but they are being distracted and entertained elsewhere.

      • ed

        If you are waiting for people to help, good luck with that. Don’t hold your breath while your waiting at least. Farmers that did know that the Canadian Wheat Board returned more money to the Western Canadian farmer’s farm gate did not even put up enough fight to keep that additional $4 Billon dollars per year in their pocket rather that having it graphed off by the American big grain companies. How lame is that. Getting screwed one bushel at a time and on every bushel to the tune of 50-55% of what you use to receive for your wheat, you would think, would have been something worth fighting for more than fighting over some additional tax on land somewhere in the future, maybe, if smart lawyers and accountants can’t find a way around those taxes in the mean time. In fact, not fighting for good things that farmers have had in the past, is actually setting a healthy track record that farmers are wimpy, and will only truly fight the weather and the mud. The rest of the time, they will go along to get along at their own peril. This fight may end up not much differently. Maybe just a few compremises, such as being able to enjoy high wheat prices in a dual market, like not having a wheat board and keeping your wheat board at the same time. Ha! Sad!

        • Harold

          Who was or who is telling the Farmers the absolute truth; the government? What school is teaching the absolute truth? What media is presenting the absolute truth? Farmers are not wimps; they are only not told the truth and therefore can only respond to the popularized lie. Money – Debt to profit, and the threat of money loss steers their values because the loss of money is the loss of their livelihood, and they cannot be blamed if they are fed nothing more than fear and propaganda at every turn. If farmers were told the absolute truth you wouldn’t need to tell the farmers to stand because they would already be standing united. We have got lots of people Ed, so we are not waiting for people and holding our breath: we are waiting for the truth to be spoken and all to hear it. You are playing the deceivers game by calling the farmers wimps and it is the Government and corporate who have fractionated us into small pieces and divided us all with their propaganda and who have gained our servitude by doing so. Educated to be blind, most just don’t see it yet but the moods are slowly changing. If you are born into a world of lies, those lies are the excepted truth and those eyes see any truth as being a lie but these people born into lies are innocent. Simply, the child born into the belief of Santa Clause is innocent, but the Adults in secrecy that conspire the belief and the lies are the guilty, but by approved doctrine the adults believe that they are acting innocently. Even though Santa clause is a known lie, there is money to be made by keeping the lie active, but who in the end is reaping the profit of the lie? Expanded, this should illustrate the Elite (Santa clause) the Government/Agencies/
          groups/politicians/lawyers (conspiring adults) and the innocent (public/farmers/child) Like finding Waldo, can you find the CWB in the illustration?

          • ed

            Yes, not having a Santa Clause for a Corporation, (“corporation” being a group of people pulling in the same direction for their own common good), that sells their products and wares for great profit is like a collective of farmers not having their CWB profit centre. There are only a few differences here. One is that it affects the farmers all days of all months all year long, not just in December, and another is that those Corporations would never give up their Santa Clause without a fight so violent that they will always eventually win.

    • Stephen Daniels

      Wow that’s some twisted logic.My milk has gone bad this morning but I realize if we hadn’t lost the CWB I wouldn’t be complaining bout it cause I could afford another jug.

      • Harold

        It would seem to me that those who know how to keep their milk fresh would seem rather “twisted” to you as well. I have news for you: they are!

      • ed

        Well at least you now do understand that you could buy more with a wheat board collective than without one. You could also likely pay a bit more tax if and when that day comes. Now maybe not. Good cognitive thought. I congratulate you.