It was over a year ago when I noticed Jay Boyd had referred to Justin Trudeau as Boy Blunder on one of his social media posts. I asked him if I could ‘steal’ that label and he encouraged it. I haven’t used it in this column because it’s a rather disrespectful way to address someone if you aren’t going to use their name, but I’m finally left with no choice after seeing these small business tax changes introduced by Mr. Blunder and his equally inept Finance Minister Bill Morneau (no nickname yet). You see, when analyzing Trudeau’s first two years as the head of Canada, you are left with really only two choices to make: either he’s a terrible person determined to destroy the fabric of this country, or he’s just an unqualified, self-entitled child who is irresponsible and has good intentions but has no business holding the position he does. I’m going with option two. Therefore, Boy Blunder it is.
Before we get into the business of small business tax, remember that Trudeau did say in an interview with Peter Mansbridge (CBC) before the election in 2015 that he felt most small business owners were tax cheats. Let’s also look back at some (space won’t permit for all) other highlights of the Trudeau era. He said that First Nations people want more money so they can store their canoes and paddles. He admired Fidel Castro. He tweeted a welcoming message to illegal immigrants that has caused a great deal of stress along our borders. He gave $10.5-million to terrorist teenager Omar Khadr, who is now trying to get legal restraints lifted so he can have unfettered access to his terror supporting sister (who’s somehow allowed to enter Canada). He’s now spending money on trying to uncover who leaked the information on the Khadr payment because he doesn’t feel Canadians have a right to know where the tax money goes. He also has said budgets balance themselves. He later said he’d run short term ‘modest’ deficits of $10-billion, but we can see the deficits are at $30-billion and long term. Is this the workings of a Prime Minister who is spiteful and doesn’t like Canada or is this incompetence?
Which brings us to last week’s news on the tax changes for people who own small business. The incompetence rears its ugly head even further when Trudeau and Morneau double down after seeing immense opposition and countless examples as to why this is legislation that will drive away regarded professionals in the medical field and discourage entrepreneurs from creating jobs. The latter of which being a strong backbone to the national economy. Trudeau and Morneau (who I don’t think have ever had to rely on a paycheque or owned a business and are the recipients of trust funds from wealthy parents and have more money than you and I can possibly imagine…. likely a lot of it sheltered in offshore jurisdictions) have preached on helping the middle class. Keep in mind, neither of them have ever defined what middle class is. They’ve also tried to pit segments of the country against one another (private sector vs. public sector) with these rules (successfully I may add) under the disguise of ‘fairness’. But, this isn’t fair.
Let’s look at one really fundamental fact: let’s pretend you have a mom and a dad in Saskatchewan making $50,000 a year each. According to my accountant brother-in-law, who knows figures better than I, each of those income earners will pay approximately $9,700 in federal taxes, so the family pays $19,400 to the government on $100,000. If only one of the parents work and that parent makes $100,000 a year, then the tax goes to $26,800. So, how is that fair? Why is it so hard to identify household income and count it as one source? This formula forces a stay-at-home parent to work if the family wants to save a bit on the tax bill and it encourages a higher income earner to slack off and take a lesser position because it’s not worth it to work hard.
Speaking of lesser positions, measures that are put into place to make it less lucrative to own businesses because you can’t share some of the income with non-working spouses or children will cripple people’s desire to create their own shops. Furthermore, heavier taxation when you pass the business on to a family member can kill long time institutions like the family farm. I’m not going into the numbers, but many who are affected already know them and if you find yourself sitting there thinking that it’s cheating the taxman to pay non-working family members, I disagree.
While it’s hard for some to understand, you need to dangle incentives for people to own a small business. Especially when it’s a known fact that 50% will fail. I’m sorry if there are those out there who see advantages that business owners have as being ‘unfair’ but if you really think they are that glowing and if you think it’s so easy to run a business, hide money, and live high on the hog, then why don’t you start your own company? I’m betting you see bankruptcy long before you are sitting in Bermuda on a beach avoiding your taxes and breaching human rights by treating all your employees like dirt, asking them to do unspeakable tasks for minimum wage. Final thought - these changes won’t do a thing to actually catch the ‘real’ tax cheats. They are so far ahead of the system, they are already taking measures today to ensure they don’t have to pay the taxman down the road when the time comes.
Boy…. what a blunder.
