The proposed rules are not really closing loopholes. I don't know why the word “loophole” is used. What we're trying to do now is to have a tax policy shift.
Due process requires that when there's a tax policy shift, as a minimum there should be appropriate consultation. While I recognize that this is part of the consultation process, we're not having appropriate consultation now. As a minimum going forward, I would ask that any implementation be delayed. The implementation date of July 18, 2018, for part of the proposed rules is just too soon.
The accountant body that I informally represent is confused by the rules. It becomes a question of how reasonable our tax planning for clients should be. Do you want us to be aggressive? Do you want us to be conservative? Tell us what you want in terms of what's reasonable, because we don't know what reasonable is in terms of the criteria developed so far by the government. In a sense, we're in the dark right now as to how to determine for sure how to serve our clients and not be caught a few years later having run afoul of the rules because CRA doesn't agree with the way we interpret them.
What we're doing is a major tax policy change. We should perhaps step back even more and ask, why don't we have tax reform? Why don't we see how we want to tax Canadians, as individuals or as family units? Right now, we are all over the map. When it comes to pension income, it's as a family unit because of the pension split; for other things, it's as an individual. Step back and figure out how we want to tax Canadians.
Assess whether, in fact, passive income is eroding entrepreneurship in the country. Sure there's passive income in CCPCs. We know that; the numbers prove it. However, is that impacting business in Canada or is it supporting business in Canada? We have the facts, but what we need are the results based on the facts. We don't have those results or proposed results.
At a minimum, let's step back. Let's slow down the implementation dates that are proposed. Better still, let's go back to the beginning and have a tax reform study. That would serve us better as Canadians in terms of transparency and due process.
Thank you.