Thank you very much, Chair, and thank you, members, for convening the meeting.
I'd like to make two quick points this morning. The first one is about the goals of the reform, and the second one is about the implementation of the reform.
As I see it, the main goal of the reform is to push towards neutrality of the tax system. A neutral tax system is one in which business decisions are made based on business merits and not pushed one way or the other by the tax system. That's a free market principle, and I think it's a good one.
The current tax system fails neutrality in a number of ways. Let me give you an example of the way our system fails neutrality right now. Imagine someone who has some skills, a hammer, and a truck, and she wants to start a business for herself. She talks to her friend who's an accountant and who says that it doesn't make sense for what she's doing to incorporate. For business reasons, her friend says, she doesn't need to do that at the income level she has at the time.
The problem is that she has to compete out there with people who are incorporated and who get a whole bunch of tax benefits that she, as an unincorporated person, does not get. What this does is create a barrier to starting up a business. There are a lot of businesses out there, a lot of people with a whole bunch of entrepreneurial spirit, who are not incorporated. They're equally hard-working, care equally about their families, and equally help out the economy. We want to make sure that the balance between incorporated and non-incorporated business is there. That's what I mean by neutrality.
The second point is about the implementation of these reforms. Many tax practitioners have raised a number of concerns about things such as succession planning, intercorporate holdings, and also the exact transition rules for the passive income measures. In these complaints that we've heard, or these suggestions that we've heard, there are a lot of interesting and useful suggestions. What I hope we see is that the finance minister and the Department of Finance, after October 2, are able to respond seriously and thoughtfully to the concerns that have been raised.
I do think these things should be taken seriously; however, I don't think we should stand frozen in inaction because of fear of some transition costs. Tax changes always require transitions. They always require some disruption. I'm pretty sure that in 2019 members from parties around the room here are going to have some tax proposals they want to bring forward, and every single one of those tax proposals will involve some transition and some changes.
What I think is the right way forward is to balance off the cost of those transitions and the complexity that might arise with the benefits you get from pushing towards a goal that we think is important. That's the way I think we can build a better tax system for Canada.