Finance committee  We've said right from the beginning that we are on board to work with government on any necessary tightening of tax rules to ensure that there aren't abuses by business owners. I do wish to defend, though, the so-called income sprinkling. One of the things that is very difficult for government to determine—and you know this from your riding, from the business owners you're talking to—is that there is a formal role, with a desk at a job and a specific title that a person might have, but there are also a lot of informal roles that business owners play, either as a shareholder or as somebody who does work in the business.

Finance committee  Well, look, there are two things on that front. One, I think, is the challenge of determining for the CRA what is an appropriate contribution for the test that might be used, the reasonableness test. To be fair, there is a reasonableness test now that the CRA does implement.

Finance committee  The challenge we have is twofold. One is that the additional measures that the proposals are intending to bring we think are going to eliminate or reduce the amount of opportunities for younger people to get involved, even in a small way, in the family business. We do worry about that from a succession perspective, because you do want the entrepreneur to involve that next generation.

Finance committee  We do, and that's certainly one of the examples we brought forward to you on behalf of the coalition. Small businesses already start from a disadvantage when they are seeking financing. One of the reasons the small business corporate tax rate was created in the first place was to allow small firms to invest their own retained earnings back into their businesses, but the other benefit of this, of course, is that with respect to the passive income rule, the income that is saved in a business can be used to invest in other businesses, and that can be an incredibly powerful and valuable thing.

Finance committee  Yes. In fact that has been our exact recommendation. Look, I get and respect that there are challenges. There are situations, including the situations affecting Canadian-controlled private corporations, where a government may need to tighten some of the rules. We've never suggested that this is unfair.

Finance committee  Yes. I think that's certainly the case. We are deeply worried that this is going to create a whole...it is mixing up the Canadian tax system for businesses and turning it on its head after about 40 years, with very limited.... I appreciate that there is some consultation, but it's very limited consultation for the size and scope of the changes that are being proposed.

Finance committee  To conclude, tomorrow we're sending a letter to all MPs on behalf of the coalition. It is directed to the Minister of Finance. The purpose of the letter is to challenge the assumptions and the justification being used for these particular changes. It is highlighting—and showing the evidence from almost all private sector tax professionals—that business owners will pay more as a result of these changes, that in many cases they'll pay more than will other personal taxpayers, and that this will disproportionately affect women.

Finance committee  Thanks very much. John and I will share the presentation. I did wear a different suit this week, Chair, just to try to throw you off, but it didn't work. I am here today not in my capacity as head of the Canadian Federation of Independent Business, but as a member of the Coalition for Small Business Tax Fairness.