Open Letter: What do the Liberals have against small, family businesses?

Hon. Bob Nault, PC, MP (Kenora)
House of Commons
Ottawa, ON  K1A 0A6
Sent via email (bob.nault@parl.gc.ca)

Don Rusnak, MP (Thunder Bay—Rainy River)
House of Commons
Ottawa, ON  K1A 0A6
Sent via email (don.rusnak@parl.gc.ca)

Dear Mr. Nault and Mr. Rusnak:

Over the past several weeks, I have heard from countless voters in the Kenora and Rainy River districts who have asked why the Liberals are against small businesses and family-run enterprises. They have good reason to be alarmed, as both your party and your provincial counterparts continue to put in place new obstacles to their very survival.

Earlier this year, Premier Wynne vowed to increase the minimum wage to $15 per hour by 2019 – a 32% increase in just 18 months. This will inflate labour costs across the board without enough time for employers to adapt. The government’s own Fiscal Accountability Office has projected that the increase will cost the province 50,000 jobs as businesses are faced with a decision to cut costs or shut down. Some in Kenora—Rainy River are particularly concerned about the impact this will have on youth employment. Astonishingly, our local MPP is not one of them – she has lent her full support to the initiative. Combined with the skyrocketing hydro rates facing many families and businesses in the Northwest, it seems as though the Wynne Liberals simply do not understand or do not care about our region’s economy.

Sadly, the federal Liberals seem equally intent on sinking Northwestern Ontario’s small business families and killing jobs. The new tax changes proposed by your party will be disastrous for many small businesses in our region. I am thinking of family-owned shops, restaurants, tourist camps, farms, tradespeople, and industrial SMEs in trucking and logging – the types of businesses that my own family members are a part of. Many of these entities have been built on sweat equity and hard work for generations. They have dutifully paid their fair share of taxes and contributed to their communities, but now find themselves branded as fat cats and tax cheats by the very government that was elected on a pledge to build and protect the middle class.

These policies are not only disrespectful, but misguided. The practices targeted by Minister Morneau include income sprinkling, passive investment income, and the conversion of a corporation’s regular income to capital gains. I refer to these as ‘practices’, because these were never ‘loopholes’, but deliberate policy designs for legitimate tax planning. They are intended to incentivize entrepreneurship and to account for the fact that people who do not work as employees typically do not have access to the same pensions, benefits, or RRSP room as others.

Accordingly, family businesses have used the existing framework to fund their retirement, retain cash in their companies to weather tight times, and to make ends meet and sustain their businesses if medical needs arise. The changes your government proposes raise the effective tax rate of these families, undermine the ability of small business owners to provide the same opportunities and safety net to their families as others, make it far more difficult for owners to retain funds in a business to help it grow and hire more people, and completely disregard the risks taken on by entrepreneurs and their families. Small business families do not just have to make ends meet for their own household, but have to make a payroll so that others can do the same.

Some businesses will bear the brunt of these changes more than others. For instance, I have also heard from many people who are concerned that these reforms will make it even harder for Northwestern communities to attract physicians. As I have stated before, we are a region in transition, both socially and economically. We cannot afford to have our progress scuttled by this ham-fisted tax grab.

These are important issues for our region. Kenora—Rainy River does not have many large government, institutional, or corporate employers – just a lot of small, family-run businesses that create the lion’s share of work and wages. These enterprises are the economic engines of our region and contribute a great deal to our communities. They are part of our tradition in the rural Northwest, and they are under threat by these ill-conceived policies.

I trust you will stand up for our small business economy and address the federal matters with your Cabinet colleagues, just as we will be doing with their counterparts at Queen’s Park.

Sincerely,

Douglas W. Judson

Douglas W. Judson is pursuing the Ontario PC Party nomination in Kenora-Rainy River. Connect with him at info@douglasjudson.ca or @dwjudson. A PDF of this letter can be downloaded here.

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