Letter To The Ministry Of Finance
NOVEMBER 10, 2017
Dear Minister Sousa:
While recently listening to your speech at the Toronto Board of Trade event, I was impressed with your passion for success in Ontario and your commitment to balancing the many challenges that face the Province. We live in a great place and I appreciate a government that attempts to find solutions to the challenges of meeting the needs of a diverse population.
My particular area of interest is entrepreneurs and entrepreneurship. I listened to your comments on Tuesday relating to Ontario’s competitive position with the U.S. and our favourable tax treatment for business. I agree with you that even with the possible changes from the Trump administration, Canada and Ontario should remain tax competitive. Together with our skilled workforce and transportation system we are very well positioned.
However, there is a major cloud on the tax horizon with your federal counterparts. Their attack on the two major advantages for successful entrepreneurs – income splitting and tax deferral for profits not required for reinvestment – is a serious problem. Once entrepreneurs become successful these two tools are the major advantages that entrepreneurs have. After years of taking risk, paying for their employees CPP, EI, Worker Comp and EHT they finally get the benefit of income splitting and deferral if they happen to succeed.
I implore you to discourage your Federal counterparts from making these changes. I have spoken to several of our most successful entrepreneurs and they are extremely unhappy regarding some of the tax strategies the Federal Liberals plan to change that apply to successful entrepreneurs. These are business owners who employ a substantial number of people who have the mobility to set up shop in the U.S. where many of their customers reside.
I worry that the Federal Government has locked themselves into a position by mistakenly saying this is about fairness, while not taking into account the risks and tax costs associated with entrepreneurship.
I hope that you will join in asking the Federal Government to change course and withhold their proposed changes, which are very discouraging for entrepreneurs in this province.
I look forward to your response.
Yours very truly,
ROSENSWIG MCRAE THORPE LLP
Jeff McRae, C. Dir, CPA, CA