Prime Minister Justin Trudeau defended his government's proposed tax changes for incorporated small businesses during a press conference after a spirited caucus meeting in Kelowna, B.C., where talk over the controversial changes dominated discussion.
Trudeau faced angry doctors at a town hall in the B.C. Interior city Wednesday night. Many small business owners are frustrated with changes the government says will level the playing field between proprietors and wage earners and close "loopholes" used by some to lower their tax burden.
The current plan would curtail "income sprinkling" and end tax advantages for those who hold passive investments, such as stocks and real estate, in their small businesses.
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The Conservatives have branded the proposals as an assault on small business, with leader Andrew Scheer accusing the prime minister of branding the country's incorporated professionals as tax cheats.
"These are good people, hardworking people, these are honest people who are being demonized by Justin Trudeau's Liberals just to pay for their out-of-control spending," Scheer said in a speech at the Tory caucus meeting in Winnipeg.
Scheer says he has no doubt that the prime minister moves in circles where many people do try to avoid paying some measure of taxes, but the Tories are talking to the plumbers and ranchers trying to create jobs and save for their families.
Asked Thursday about suggestions from some that the proposed changes will hit people earning less than $150,000 a year, Trudeau said the tax benefits of incorporation only kick in when someone has maxed out their RRSPs and tax-free savings account contributions each year — which limits the impact of the proposed changes to upper-income earners.
"Everyone knows, the middle class pay too much in taxes and the wealthiest don't pay enough. This is about levelling the playing field," Trudeau said.
Finance Minister Bill Morneau announced the tax proposals in July, kicking off a 75-day consultation process to elicit feedback. A hard deadline of Oct. 2 has been set for parties to participate in the process, with the government expected to introduce legislation in the fall.
Trudeau said the government will incorporate the feedback it heard from business groups, MPs and others as it considers the proposals this fall.
'Open to listening'
Health Minister Ginette Petitpas Taylor said Thursday she would have a meeting next week with the newly elected president of the Canadian Medical Association, Gigi Osler, to discuss the organization's concerns.
Osler told CBC News that doctors are genuinely concerned that tightening the tax regime could make it more difficult for women to practise medicine.
Petitpas Taylor conceded she has heard from many small businesses in her New Brunswick riding about the changes, adding the Liberals are committed to their plan but open to tweaks.
"No decisions have been made at this time," she said. "We're really open to listening."
More than 50 Liberal MPs had questions for Morneau during the closed door meetings this week, seeking clarity on how best to sell the plan to jittery constituents worried about their retirement nest eggs.
Morneau reiterated that the proposed changes would not be retroactive and would only be applied in the future to passive investments held in a small business. He also counselled MPs to double down on efforts to counter what he called a misinformation campaign by the opposition Conservatives, Liberal sources told CBC News.
At the news conference Thursday, Trudeau was also asked about the flood of asylum seekers into Canada. He said that while Canadians are open to immigrants, they expect newcomers to follow entry rules. He said there needs to be a distinction between economic migrants and legitimate refugees.
"I will continue to tout the benefits of Canada's immigration system ... but also its rigour," he said. "We've all heard the rhetoric of fear people are trying to play up over irregular arrivals."
Trudeau said the system has responded well to the waves of asylum seekers who have so far crossed the border.