Debates of Oct. 3rd, 2017

Opposition Motion—Consultations on proposed tax changes

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I wonder if my colleague could comment on the last questioner who criticized the Conservatives who said they were not going to support this legislation but wanted to increase the consultation period. That is exactly what the finance minister said when he opened the consultation. He said they were going to have this consultation period, but be warned, they were not going to back down on this. It is the same kind of attitude.

What does the member think about the Liberals' plan for getting at tax fairness, when they are going after the small fish? They are going after small businesses, and they are going back on their promises to get at the CEO tax loopholes and the offshore tax havens that would really make our taxes much more fair, yet they are ignoring them.

[John Barlow, Conservative, Foothills, AB]

Madam Speaker, it is true. It is just another broken Liberal promise. The Liberals started this consultation, but three-quarters of the way through, it became very clear, from the comments of the finance minister and the Prime Minister, that they were going to be moving ahead with these tax changes, regardless of what happened during the consultation period.

All of us in the House would more than welcome taking a look at tax reform. We would look at trying to simplify it and make it easier, not at things like reasonability tests that are going to make it much more bureaucratic, with much more red tape, and much more convoluted and confusing.

The crux of this question is that we do not believe, and I would say that a majority of Canadians do not believe, that this consultation has been genuine. That is why we are asking to extend that consultation to have a real opportunity to talk to Canadians.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Madam Speaker, government members are saying that this will not apply in the past. It will be applied from this point moving forward. It is more evidence of how little they know about small businesses and the planning they need to do for the future.

Does my colleague think the Liberals are now running scared? When they first introduced this, the finance minister and the Prime Minister were bound and determined that they were not going to change a thing. Over the last couple of weeks, media reports have been saying that this will not be that bad and that there is not going to be that big a change. I am wondering if there is any hope for Canadians that these Liberals will actually listen to them and turn around and get rid of these changes.

[John Barlow, Conservative, Foothills, AB]

Madam Speaker, that is a great question, and today we will find out. It is clear that almost a dozen Liberal MPs have come out publicly in opposition to these potential tax changes. Today they will have an opportunity to vote in favour of extending the consultation period. If they do not do so, it is quite clear that they have not been listening to their constituents and instead are listening to the finance minister.

[Jean-Claude Poissant, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food]

Madam Speaker, I am giving some of my time to my colleague from Fundy Royal.

I will preface my remarks with some personal history. I grew up on a small family farm in Saint-Philippe, where I worked the land and ran a dairy operation with my mother and father. I never finished high school because the farm income could no longer support our family. There were four of us kids, and I had to drop out at 15 to help my mother with the cows and the crops while my father worked off the farm.

In 1976, my mother got sick. She had brain cancer. She died two years later. I knew then that I would one day take over the farm.

I went back to school to learn what I needed to know to gradually take over the farm during the 1980s.

I can assure you that I know a thing or two about being a farmer. Running the farm on my own, I had to deal with all kinds of challenges familiar to many Canadian farms: crops destroyed by fickle weather events; accidents; contagious diseases that swept through the herd; and all the financial stress farm families deal with.

That is why I am pleased to rise to speak to tax fairness for all Canadians.

This gives me the opportunity to say how important it is to our government to maintain the vitality of Canada's agriculture and agrifood industry. I have spoken with the Minister of Finance personally, and he has said many times, as we all have, that the tax benefits designed to help family businesses grow, create jobs, and innovate will not be affected. I would also like to clarify a few things.

First, our proposed tax changes will not increase the tax rate for farms.

Second, they will have no impact on the ability of farmers to incorporate, invest, and pay family members salaries to work on their farm.

Third, farm owners will continue to benefit from a lifetime capital gains exemption of up to $1 million for their farm properties. When they sell their farm assets, they pay capital gains on the proceeds of the sale up to a maximum of $1 million.

Fourth, the proposed changes will have no impact on the ability of farmers to pay family members a salary for working on the farm.

Let us be clear. The Minister of Financeand the Minister of Agriculture know that farmers play an essential role in the country's economy, and that is why we want to be sure that the measures we take are the right ones. We are listening to farmers' perspectives, and we have repeatedly met with industry representatives. We listened to farmers' views to determine if and how it will be possible to transfer farm businesses to the next generation. I can guarantee that we will be considering the agricultural sector's perspectives as we move forward.

The changes we are proposing would eliminate the tax advantages that only the richest Canadians can benefit from. To make things clear, these changes are not aimed at middle-class Canadians and small business owners. They will only affect a small number of particularly well off corporations.

We support small businesses, we support family farms, and we support the contributions that they are making to our communities and our economy.

We are going to make sure we do not create more red tape for hard-working, middle-class small businesses. Our priority is to ensure tax fairness, while avoiding any unforeseen consequences for our tireless farmers.

I would like to assure my colleagues that the government will not be changing the tax measures meant to help family farms grow, create jobs, and innovate. We are well aware that farmers face unique risks and issues as businesspeople. That is why we are working together with them to make sure our programs provide the tools they need to explore new opportunities.

Beginning on April 1, 2018, the Canadian Agricultural Partnership will target federal, provincial, and territorial investments of more than $3 billion over 5 years to help the sector innovate, grow, and prosper. The partnership will focus on priorities that are critical to unleashing the sector's growth potential, including research, innovation, domestic competitiveness, and international trade. Under the partnership, producers will continue to have access to business risk management programs that are comprehensive, responsive, and accessible.

The Canadian agriculture and agrifood industry is one of Canada's most important economic drivers. We are talking about a sector that, from farm to table, accounts for over $100 billion of our GDP and over $62 billion of our exports. Trade is an important priority. It is estimated that almost half of the value of Canada's agricultural production is exported. We are the world's largest exporter of canola, flax, pulse crops, and wild blueberries, and the third largest exporter of wheat and pork. Canadian agri-food exports are increasing by about 10% every year, and our goal is to expand exports to $75 billion by 2025. We are working tirelessly to reach that goal.

We are proud to have signed the Comprehensive Economic and Trade Agreement with Europe. The industry estimates that that agreement will help increase Canadian agrifood exports by $1.5 billon a year, which is good for farming enterprises, job creation, and economic growth in Canada.

Asia is another important market for our industry. Its middle class is expected to increase by three billion people over the next two decades. Exploratory discussions to examine the potential of a free trade agreement with China have set a goal of doubling trade between our two countries by 2025.

We are also looking at entering into an agreement with the Association of Southeast Asian Nations, one of the world's fastest-growing economies. In addition, we are working with the United States and Mexico on an ongoing basis to strengthen the North American Free Trade Agreement, which quadrupled North American agricultural trade over the past two decades.

To get our products to our international buyers reliably and efficiently, we have brought in provisions to support rail transportation. Research and development are key to Canada's agricultural success on a global level. Continued public and private investment in research is critical if Canada is to help feed the world.

Canada has the best farmers and food processors in the world. We will keep working with all farmers, with family farm businesses, and with all of our food processors on tax and all other issues to ensure that our agricultural sector remains a global leader and the Canadian economy's top job creator.

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Madam Speaker, I thank my colleague, who comes from a farming community, for that fine speech.

I want to ask him exactly what I asked his colleague earlier. I will not talk about Liberals and Conservatives. I am speaking as a member from a rural region who listens to everyone and who receives letters from everyone.

I would like the hon. member to step back from the party line and answer me honestly. Has the hon. member, like me, received hundreds of letters from very concerned people? That has nothing to do with the party, the political stripe. When we represent a given region, we represent everyone in it, no matter the banner under which we ran.

We have met with many people, including representatives of the Fédération des chambres de commerce du Québec. Everyone is scared.

I will ask my question one more time. Does the hon. member have any sense of how much these new tax measures have put the farming community on high alert? Is he aware that people are scared of losing their family farm?

[Jean-Claude Poissant, Liberal, La Prairie, QC]

Madam Speaker, I thank my colleague for her question.

I met with many farmers at my riding office in La Prairie, and they shared their concerns with me. The message that I would like people to remember from my speech is that farms will see no change in their tax treatment. Farmers will be able to continue to transfer their farms to future generations.

People have told me both in person and in writing that misinformation is being spread to scare people. They are asking me whether it is true that they will no longer be able to employ family members and that they will no longer be able to transfer their business. No, it is not true. That is what I assured the farmers that I spoke to. I met with some just recently.

I believe that we need to be positive, not negative. Farmers work hard on their farms. They do not always have time to find out about the changes that are being made that will affect their businesses.

I can assure the House that these changes will not affect our farms.

[Tracey Ramsey, NDP, Essex, ON]

Madam Speaker, my colleague talked about farmers. I have been contacted by many farmers in my riding. This is the middle of harvest, which is an incredibly busy time for them. One farmer in my constituency, John Mailloux, said that he was talking to his accountant yesterday, He had a direct example of his farm that could cost him thousands of dollars a year in tax implications, which he would have no choice but to pay. He had signed a succession deal with his parents and he had 16 years left to finish it. He said that he would love to get together. He wants to talk about why the government is pushing this through during this critical time and why it is not allowing for a broad expanse of scope.

Does the member not agree with me that extending the consultation would allow farmers to be heard and to properly engage in the process, considering they are so busy right now during harvest? Does the member not agree that we should extend it?

[Jean-Claude Poissant, Liberal, La Prairie, QC]

Madam Speaker, I thank my colleague for her question.

I did not not just consult farmers from my riding and those who came to see me here on the Hill. I also asked an agricultural tax expert to make recommendations, which I tabled to reassure the farming community. Incidentally, we must not forget that we are still in the consultation phase. The committee will also have a say in the proposed changes.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Before we continue debate, I want to remind members that when someone is speaking in the House and has the floor, that person deserves the respect of being heard. Members may not be in agreement with what the member is saying, but we need to listen respectfully. He or she does have the floor.

The hon. member for Beauport—Côte-de-Beaupré—Île d'Orléans—Charlevoix on a point of order.

[Sylvie Boucher, Conservative, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Madam Speaker, the hon. member just told us that he met with a tax expert, and I would like him to tell us the name of that expert because—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

We are in debate. That is not a point of order.

Resuming debate, the hon. Parliamentary Secretary for Small Business and Tourism.

[Alaina Lockhart, Liberal, Parliamentary Secretary for Small Business and Tourism]

Madam Speaker, I am pleased to rise today to speak to the issue of tax fairness and our government's efforts to bring greater fairness to Canada's tax system.

At its core, this is about a key commitment our government made during the election campaign, and has worked every day to deliver; that is to build a stronger middle class and help those working hard to join it.

Simply put, our government has always said that when we have an economy that works for the middle class, we have a country that works for everyone. That is why one of our government's first actions was to raise taxes on the wealthiest 1% of Canadians while cutting taxes for the middle class.

Our current proposals have the same objective, which is to make our system fairer for all Canadians and ensure everyone pays their fair share.

In our platform, we had a specific commitment to address the use of corporations to reduce personal income tax obligations for high income earners. Currently, an incorporated professional earning $300,000 can use the private corporation to get tax savings that amount roughly to the average Canadian's earnings for a year.

We understand these tax-planning strategies are legal. However, when we consider that these strategies are not available to all Canadians. it is clear they are not fair.

At present, a single woman with two children aged 12 and 14 and an incorporated business pays a tax rate that is higher than a married woman with two children aged 19 and 20 and an incorporated business bringing in the same revenue. That is not fair.

The changes we are proposing are aimed at eliminating the legal but unfair advantages that allow the wealthy to incorporate to avoid paying taxes on some of their income and to have a lower tax rate than individual taxpayers.

We do not believe that is fair, and most Canadians agree with this.

There is a lot of misinformation out there about these proposals and I would like to take a few minutes to address some of the more notable misstatements I have heard.

To begin, some have said that these proposals are an attack on middle-class small business. That could not be further from the truth. As the Prime Minister has said, as the Minister of Finance has said, and as so many others in this place have said before today, this is absolutely not true.

We know very well just how important small businesses are to our economy. Small businesses employ approximately 8.2 million Canadians, and this represents 70% of the private sector workforce and approximately 30% of GDP.

We are deeply committed to supporting middle-class small businesses so they do thrive and create good, well-paying jobs. We know just how hard these business owners work to provide for their families.

It is worth remembering that two-thirds of businesses in Canada earn less than $73,000 a year. These hard-working, middle-class small businesses are not our focus. We are supporting these businesses in many ways, as they invest, create jobs, and drive growth throughout our economy. For example, Canada's average tax rate for small businesses is the lowest in the G7 and the fourth lowest among the OECD. This allows small businesses to retain more of their earnings to reinvest, supporting growth and job creation.

Other commentators have expressed concern that our proposals are an attack on the family business. This is also not accurate.

Famliy is often crucial to the success of small businesses. I understand that, and so does the government. If a family member is paid for their work in a small business, the changes we are proposing will not affect them. Family members can continue working for the business without any repercussions.

However, we believe that high-income earners should not be allowed to pay dividends to adult family members through the corporation if those family members do not make significant contributions to the business, simply in order to avoid paying their fair share of personal income tax.

This type of tax planning is unfair because it is not available to all Canadians.

Our government understands that many small business owners save money in their businesses for the future, whether for a rainy day, future investments, or eventual retirement. When it comes to the actions that have already been taken, we have no intention of going back in time. Our proposals would only be applied on a go-forward basis. Our intent is that neither existing savings nor investment income from those savings would be affected. We are not going after the nest eggs. What is more, we encourage small business owners to continue using all available tax-sheltered savings plans, such as pension plans, RRSPs, and TFSAs.

Less than 3% of Canadians max out their RRSP, TFSA, or pension plan contributions. We are proposing to eliminate the legal but unfair advantages that allow some individuals to use unlimited tax-sheltered accounts that are beyond the means of most Canadians.

However, someone who saves money in their business with the intention of reinvesting it in the business or in a rainy day fund will be free to keep doing so. The proposed changes will not affect them.

Finally, I want to address the concerns of some doctors, who have raised concerns about their ability to take parental leave. Our proposals are about making the tax system fairer for everyone. All Canadians, employees, and small businesses can continue to benefit from pensions, employment income, and maternity leave, if they choose. However, our government has been clear since our election that we strongly support women entrepreneurs. The Minister of Small Business and Tourism has made it one of her priorities as minister.

We know that of small businesses in Canada, just under 17% are majority owned by women, and that is simply not good enough. That is why we have taken steps to create specific programs that support women entrepreneurs, and when it comes to these proposals, we are committed to ensuring that these changes do not affect women differently from men. Our government is committed to gender equality, and we will work to ensure that these changes support women's ongoing success.

It is worth reminding the House that our proposed changes will continue to protect businesses' ability to incorporate, make investments, save for downturns, and pay family members who work in the business.

They will protect and maintain small businesses' ability to succeed and create jobs, while ensuring that the wealthiest Canadians pay their fair share.

Our government is committed to building a fair tax system in Canada, and we want to get it right. Over the coming weeks, we will continue to listen to Canadians, including small business owners, professionals, and experts, on how to build such a system while avoiding any unintended consequences.

Although consultations have concluded, the work of the government continues, and we will continue to work with small business owners and professionals, like everyone else, to address their concerns.

Over the summer, a lot of misinformation has been spread, and I want to assure members of the House that our Prime Minister and the government are committed to listening to Canadians and getting this right. As the Prime Minister has said, better is always possible, and nowhere is that more needed than in creating a fairer tax tax system for Canadians.

When we have an economy that works for the middle class, we have a country that works for everyone.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, I am wondering, after listening to the member's speech, if she has heard from people within her constituency who are very concerned about having access to a family physician. I have met with a number of physicians, who simply said that attracting doctors to rural areas is going to be very difficult. She mentioned that there is a rural component to her riding. It is a challenge. I served on a small community's economic development board before I was elected, and the most horrifying thing is finding out a community is losing a doctor. How do we attract them?

Some of the doctors I met with had come from Africa, South Africa, Great Britain, and I believe one was from Ireland. They said that if these measures had been in place when they were looking to locate their practices, they probably would not have chosen Canada. In my rural riding, access to a doctor is of great concern to a lot of seniors, the aging community, and families. I would ask the member to tell me her experience in listening to her constituents.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Mr. Speaker, as the member mentioned, I live in a rural riding, and I have taken the opportunity to talk to many of my constituents, some of whom are doctors. There are a few things I would like to point out. First of all, only 40% of doctors are incorporated. This is not targeted at doctors at all, but it is looking at the tax fairness system.

Second, I had the opportunity to sit down with the recruiting team for my own community, the one looking at recruiting doctors to that area. Of course remuneration is one of the key factors they look at when choosing a place to practise, but they are also looking at quality of life. They are looking at all the things that make these rural communities viable and wonderful to live in. We talked at length about all of the other factors that cause a doctor to make the choice to practise in small communities.

I want to reiterate that we want to continue to support doctors in all areas of Canada and that their concerns have been heard as well, and we will be communicating those.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, clearly, we all agree that taxation must be fair and equitable. What I do not understand is why the Liberal government chooses to target small and medium-sized enterprises and farmers first.

During the campaign, the Liberals promised to introduce more global tax reform. They spoke of the $100 billion being declared under all sorts of complex measures, including the loophole around CEO stock options, for lost revenues totalling $750 million.

What is more, they could have went after tax havens. Rather, after voting in favour of our motion in that regard, they signed an agreement with the Cook Islands. There are many aspects of the tax system they could address, but they chose to go after SMEs and farmers. The Liberals are attempting to reassure, but people are concerned. They manufactured this concern by announcing this move in the middle of the summer so there would be no time to discuss it.

Will the Liberals agree to take a broader look at the tax system and extend the consultation period to listen to the people they say they want to listen to?

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Mr. Speaker, it is important that we take a step back and realize that we are absolutely not targeting small businesses or farmers. This is about creating a tax system that is fair for all, including many small business owners and farmers.

The member asked why we would choose to do this first. Taking a look at corporate taxes was not our first act as a government. We actually began our mandate by focusing on increasing the taxes for the top one per cent and decreasing them for the middle class. We have also been very focused on maintaining a low business tax rate that encourages businesses to maintain their ability to invest in their businesses.

What we are looking at now is creating a system that really looks at the fact that 80% of passive income is held by 1.6% of corporations in this country. That is not fair, and we need to look at a way of making sure we have a fair tax system.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I will be sharing my time with the member for Louis-Saint-Laurent.

As the member of Parliament for the riding of Renfrew—Nipissing—Pembroke, I appreciate the opportunity to voice the objections of my constituents, who are opposed to paying for the bad spending of the Liberal Party.

As a 17-year veteran of Parliament, I can confirm for the newly elected MPs that substantive changes in tax policy are typically the subject of a federal budget. They are well publicized in advance, released while the House is in session, and delivered by the Minister of Finance in a speech to all parliamentarians and Canadians. Our Conservative government gave opposition parties the opportunity to comment on proposals and offer their assessment to their constituents. In short, a better-informed public and an opportunity for dialogue and debate results from this time-honoured approach.

I can confidently say that the proposals of July 18 are some of the most sweeping and dramatic I have ever seen. The manner in which the Department of Finance released these proposals was not fair, and the comment period was not adequate. Media outlets and the public should have been advised well in advance of the Minister of Finance's speech, to provide an opportunity to assemble experts to review and comment on the proposals. Changes of this magnitude should have been announced when the House was in session. The delivery of sweeping tax changes, which contain very controversial provisions, while Parliament was in recess thwarts rebuttal and effectively reduces exposure of the measures, and it is not right or reasonable. It is an affront to democracy, which leads to the substance of the Conservative motion before the House today.

A 75-day consultation period is unreasonably short, given the timing and manner of the announcement. Legislation continues to be built providing the Canada Revenue Agency with an increasing level of interpretative powers. The predominance of phrases such as “reasonably being considered” and “reasonable to conclude” throughout the draft legislation increases uncertainty for taxpayers. It opens the door to abuse by government authorities. The Finance Minister should ask this. If he were still at his Toronto Bay Street corporation, would he or his employees conclude, as tax shelter advisers, that the method of announcement could be considered reasonable or reasonably fair? The answer is definitely not, and in a democratic society as we have in Canada, future announcements of this magnitude must only be made when the House of Commons is in session where the full scrutiny of all Canadians can be brought to bear on whatever is being proposed.

I know how my constituents feel about the Liberal Party's tax proposals, because I spent the summer talking with them. I am pleased to thank the many constituents who attended a packed meeting at the agricultural hall in Cobden last week to voice their opposition to the plan by the federal government to raise taxes on farmers, small business, and a variety of professionals such as engineers, doctors, building contractors, plumbers, and electricians, to name a few trades. In addition to Mayor Hal Johnson and Reeve Terry Millar of Whitewater Region Township, which hosted our tax town hall, and councillor Stan Pecoskie and John Jeffrey of Killaloe, Hagarty and Richards Township, we welcomed a mayor from a neighbouring municipality in Quebec, Jim Gibson. He was looking for information that he obviously was not receiving from his Liberal MP, and there was no charge to constituents to attend the information session that I hosted.

Since the Minister of Finance and members of his party claim that Canadians should not have had the opportunity to be consulted about their sweeping tax-change proposals unless they paid $1,500 for the privilege to do so, I am pleased to share excerpts of a letter from a constituent who just happens to disagree with the government. For the record, I did not ask for $1,500 to read excerpts from this constituent's letter:

“Good morning. I've sponsored events to raise funds toward the local hospital for years. I've personally donated and raised well over $100,000 for the hospital and well over $1 million for our community, from junior hockey programs, minor hockey, figure skating, girls hockey, soccer, to minor softball, to name a few of the causes.

“Under these new tax laws, I would have to re think the programs I sponsor. I am now more than a little embarrassed to admit that I voted Liberal in the last election. I truly believed they supported small businesses and understood that we were the back bone of our economy.

“If I thought small business and the economy would continue to purchase our product at the higher rate I would not say anything. However, I do not believe that. My savings and my retirement funds, at one time, which was considered good and responsible business practice, was just attacked by the liberal Government.

“Accounting firms from either side of our country agree that the Liberals are deceiving business people. They are trying to sneak in a major tax sweep and hoping no one would notice. They point out the fairness of these new proposed tax laws, not only how they will effectively attack business, but also the underhanded way in were introduced. One cannot even begin to argue that.

“When you own your own business you starve as you pay your suppliers and tradesmen in the beginning and that's after you work your normal hundred hour week, and find there's no money left for yourself, all in the hopes that in the (end) eventually it will pay off.

“Income sprinkling. Did the Liberals miss the part about hundred hour work weeks with NO pay cause there was no money left? Whose house was used to finance the start-up, just mine or was I putting my wife and children's lively hood in grave danger also? Who shared the responsibility of working in the store or business office because we couldn't afford to hire anymore help? How many husbands and wives to to go out and work to help support their struggling spouse?

“Attacking doctors, something every small community is screaming for, small communities organizing fund raisers in order to try and entice any new young doctors to come to our communities.

“Does (the Prime Minister) really believe there is this doctor shortage because the business is so lucrative, or perhaps fewer people want to go into that kind of school debt for such a long term return?

“I believe he is attacking our doctors as a smoke screen to hide his direct attack on small business.

“I've dealt with Canada Revenue Agency on a number of occasions. I filed an HST rebate for about $155,000.00. They declined my request for rebate, said I put it on the wrong form. We informed them that in 2011 we had this same issue and CRA ruled I had deposited on the wrong form then and insisted I resubmit on the same form submitted, contradicting themselves.

“They then started charging me 5% compounded daily until I pad the $155,000.00 and my file was sent to appeals. It was two years later when they agreed we had submitted correctly and my money was finally returned. I think it bore 1/2% interest.

“Do you really think as a small business owner I want, as these new laws indicate, to give CRA any more Interpretive Powers? They can't make their minds up when it is in black and white.

“If I had no passive investments where would the $155,000.00 come from? Attacking passive income, as a business owner I have to have passive income, I need funds to pay for future purchases, future development costs and letters of security in order to develop.

“This summer I had to come up with 6.3 Million dollars. The banks do not simply lend you 6 million on past performance in the hope you can or will pay them back.

“Does the (liberal) government really believe they can tax the passive investments, which finance the small business owner's future growth, or pay their employees when business is slow? The banks want security for every dollar they lend you, and if you are offering real-estate as security they may give you 50% of the appraised value.

“How can we make it even harder for small business to survive?

“I've been in business 30 years, in the last 12 years of that time we have been able to start accumulating wealth. 30 years in the business, with all my past track records of making sure everyone was paid, yet I still had to put my house up as collateral to get the funds I needed to proceed with the 2 new jobs this year, and now the liberal government wants to start attacking my passive investments.

“The funniest part of all of this is, the Prime Minister wants to start attacking dividends. I guess now that he has a pension he can take the silver spoon out of his mouth and stop depending on all the dividends, or perhaps income sprinkling that his father set up for those boys and that he took advantage of for years.

“Please do not forget, the majority of small business owners do not know or understand the magnitude of these changes They were all hard at work all summer trying to make money through this soggy year as the government employees were on their paid holidays.

“Please, understand that it is hard to camouflage my bitterness, and I do not only mean government employees. I missed your meeting in Cobden last night (federal member of Parliament), but I can only imagine the eye opening that small business owners got from that meeting.

“I know you are going to fight this, and I hope, for my company and retirement and my employees' future you are successful in defeating it.”

It is time for the finance minister to go back to the drawing board. Canadians are tired of being asked to pay for this government's bad spending.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I think I know why the member's constituents are outraged. It is because they are being misled about what the government is actually trying to do.

In the member's example, she talked about income splitting. We are not talking about individuals who genuinely work within a corporation, but individuals to whom the income is sprinkled, the adult children who are being paid dividends by a company they do not participate in at all. The member might find that to be fair. I personally do not.

The member also talked about passive investments and how people need to be able to keep money in their company to grow the company. Of course the government is going to continue to do that. The government has not spoken about taxing income kept in a corporation for the purpose of growing that corporation, but specifically about income extracted from the corporation for personal use.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, it is sprinkling and income splitting. We have already seen what the Liberals have done.

As soon as they were elected, they took income splitting away from families with young children. Now they are trying to take away income sharing from family farms. Farmers do not pay their spouse or their adult sons and daughters who are going to school until they know whether or not they will be able to sell their crops or livestock and make a profit. In bad years, they do not get paid. In good years, they do. That is why they have the income splitting, so that overall they are not paying extra tax in good years versus paying no tax in bad years.

The other thing we did as a Conservative government was to allow income splitting for seniors. What is next ? Are the Liberals going to take that away, too?

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, my colleague gave another great speech.

My constituents are concerned. They have seen the Liberal record. They heard the promises during the last election of just an itsy-bitsy, teeny-weeny, little deficit. Then shortly afterward they heard that Canada would not come to budget balance until mid-2050. My constituents are worried.

When they see a Liberal government come in and immediately slash the ability of individuals to save in tax-free accounts, with the contribution limit going from $10,000 to $5,500; when they hear that CPP premiums will go up, which will hit the employer and the employees of every small and medium-sized business; when they see a new carbon tax being added; when they hear about all of this Liberal spending and the hunger for more revenue, Canadians are concerned and skeptical, and rightfully so.

Could my colleague share with me some of the concerns she has about the Liberal government's affording Canadians the ability to save for a safe, secure retirement?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, we heard from a number of people.

Actually, there was another concern expressed by a farmer in my riding. He says that this short-sighted approach fails to understand the impact businesses have on family members who might not be directly involved in the business but share in the financial risks.

This will not only affect business owners and doctors, but also have an impact on everyone. It will have an impact on people who are already retired, and people who do not yet have a job, because it will be harder for them to find a job, and also people who are ill, if they can even find a doctor, let alone deal with how long the wait times will be.

We heard that in Thunder Bay the entire emergency department signed a letter saying that if this proceeded, they would walk out. That is an entire city that would be without an emergency department. What about the people who work, supporting those doctors?

It is not just jobs that are at stake, but people's lives because of this ill-conceived, high tax grab.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I thank my colleague for sharing her speaking time with me.

I am always happy to rise in the House, but quite frankly, I have to say that I would rather be talking about something else today, but the government decided to specifically target Canadian entrepreneurs, the people who create jobs and wealth and who are the backbone of the Canadian economy. As evidenced by the Minister of Finance's infamous reform proposal, they have fallen out of favour with the Liberal government.

Two aspects of the Liberal government's approach are a complete disgrace. The first is obviously the direct attack on our entrepreneurs, but there is also the fact that Canadians had so little time to debate these major issues. That is why, today, we have moved a motion stating that this Liberal reform is no good, as it is an attack on our entrepreneurs, and asking the government to extend until January 31 the consultations it claims to have held.

In 1962, the Diefenbaker government created the Carter Commission to evaluate proactive tax measures that could be presented by the federal government to stimulate entrepreneurship, investment and job creation. How long did it take for that government and the ones that followed to develop a positive policy? It took ten years because, in the 1960s, governments listened to citizens, business people and those who make the economy work.

It took ten years, until 1972, to achieve the tax measures that we know today. Since then, various adjustments, changes and proposals are made every year, which is perfectly normal. Our job here is to look carefully at each proposal. The scandalous part is that the Minister of Finance launched a supposed 75-day consultation of Canadians in the middle of the summer, on July 18. I was a journalist for 20 years and I have been in politics for nine, so I know the game well enough to know that a government that provides a 75-day consultation period starting in the middle of the summer has already made up its mind; it does not care what people have to say. That is the reality under the Liberal government.

I would like to share just a little story about how I was on vacation when I saw the Minister of Finance's announcement. I checked in with my colleagues, released a statement, and headed to the Radio-Canada studio in Quebec City. I was on vacation. My hair was long, I had a beard, I was wearing bermuda shorts and sandals, but we did the interview anyway because it was important to us. I hope nobody digs out the pictures because that could be embarrassing. I can see that my colleague from Montreal's south shore is having quite a chuckle picturing that. Taxpayers paid for those pictures because we did it at Radio-Canada.

Jokes aside, the fact is that when a government launches consultations in the middle of the summer, that is a sure sign it does not really want to hear what people have to say, and for good reason. How do the Liberals really feel about entrepreneurs? Why did the Liberal government launch this so-called consultation about taxing them more heavily? Because it does not like them. It despises them. People across the aisle are getting all up in arms. They say I am exaggerating, but I am not.

Almost exactly two years ago, on September 8, the CBC's Peter Mansbridge interviewed the Liberal party leader, who said, “a large percentage of small businesses are actually just ways for wealthier Canadians to save on their taxes". Not only is that not true, it is also derogatory, arrogant, and so very Liberal. On the basis of that fallacy, the Liberal government started thinking about ways to help itself to even more of our entrepreneurs' money.

The government settled on a three-pronged approach to making life difficult for our entrepreneurs and getting its hands on even more of their money: business transfers, passive income, and income sprinkling.

Is there anything better than walking into a second-, third-, or fourth-generation business, where the pictures of the grandfather and great grandfather are hanging? How wonderful to see people managing to transfer their knowledge from generation to generation, people motivated by family pride to make their business thrive.

What does the Minister of Finance’s reform propose?

It proposes further taxing those who would like to sell their business to their children. Too bad for them, but the reality is that, if an entrepreneur wants to sell the family farm or business to their children, they will pay more taxes than if they sold it to a stranger.

How unfortunate. As the member for Carleton notes every time he asks a question on the topic, the risk, particularly in the case of family farms, is that farmers will very likely end up selling to a large company, like McCain, rather than to a family member if it means paying less tax. That is outrageous.

As Canadians, we must respect and promote family entrepreneurship. That is what the provincial government is currently doing, with the support and cooperation of the opposition parties in a spirit that allows family businesses to be sold within the family without any tax penalty.

The first pillar of the Liberal government’s attack is the transfer of businesses, which is taxed more when it happens within a family. What a bad idea.

The second is passive income. The Liberal government wants to further tax people who put money aside in businesses. That is outrageous; absolute heresy. Anyone in business will tell you the facts, which are that, in business, there are good years, and there are bad years. You have to save money when you want to buy something, invest in your company, modernize equipment, give bonuses to employees, hire people or raise salaries.

That is the fair, responsible and realistic way Canadian entrepreneurs operate. That is not the Liberal way, who prefer to live on credit, run deficits and rack up debt without a care in the world.

No! A true entrepreneur is a visionary man or woman who is responsible and puts money aside. Unfortunately, the Liberal government wants to further tax entrepreneurs. That is a sign of the contempt in which it holds them, in typical Liberal fashion.

The third is income distribution. We have been hearing a lot about how it is not right for people to split their income and to hire family members, and what not.

No! In real life, when you know how family businesses work, how often do you hear entrepreneurs say that they had to mortgage their house to stay afloat? Others say they have not paid themselves a salary, and that their children and spouse are pitching in, that everyone is making an effort, everyone is rolling up their sleeves, all trying to make the business grow.

Anyone who visits a local business owner, whether it be the owner of a modest pizzeria on the corner or your local electrician or plumber, knows that the family is engaged and involved in the business's success. Sometimes family members are paid salaries or dividends, but this is not some mortal sin; on the contrary, that is how you run a business.

That is what you are supposed to do. Of those three factors, this is an attack on entrepreneurs because entrepreneurs are not salaried employees. That is what is so vicious about the Liberals' attitude. They are pitting salaried employees and entrepreneurs against one another, when everyone should be working together.

The Liberal government says it is going to tax the wealthiest 1% more. It seems to have forgotten that the Department of Finance found in a report released last week that the infamous 1% paid less in taxes this year than it did two years ago. Will you look at that!

That is the Liberal Party's policy, but I digress. I cannot conclude my remarks without mentioning the fact that, last Friday, we, the five Conservative members for Quebec, spoke out on behalf of Quebec business owners. We held a meeting, and it was very moving to hear from real Canadians, real business owners, and real job creators who are completely disgusted by the Liberal government's attitude.

Thirty-six-year-old Steeve Marin started his company 15 years ago with the support and backing of some of his colleagues. Today, he says that, after all of the sacrifices he has made, what the Liberal government is doing is like using a bazooka to kill a fly. Not only is this approach inadequate, it is disrespectful.

Ms. Lapierre and her husband started a company three years ago. They went without a salary for 10 months so that they could pay their employees. That is what life is really like for business owners, the very people the Liberals intend to go after. It is unacceptable.

Gaétan Boudreau owns a construction company. He said, and I quote, “if this keeps up, I'm walking away”.

That is the reality. It is not the Conservatives who are saying this. We were pleased to hear from tax expert Louis Julien from Choquette Corriveau, who said that, if these measures are passed as they now stand, business owners will have to pay more taxes. They will have less money for future projects and a lower standard of living. These measures will curb entrepreneurship, cause an economic downturn, negatively affect job creation, and cause hundreds of entrepreneurs to leave Canada. That is what the Liberals' bad policy would do.

The least the government can do is to continue to listen to what Canadians have to say about this, at least until January 31, 2018.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I listened carefully to my colleague’s speech, but I heard no proposal. I imagine the Conservatives see life in black and white; there is no grey area for them.

Does the member think it is fair that a two-day old child currently has a lifetime capital gains exemption? Thus, if that child wants to start a business at 18 years of age and retire when he is old, he is not entitled to his capital gains exemption. Is that fair?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, what is unfair in this proposal is that the numbered companies belonging to the Prime Minister’s family are conveniently exempt from these measures. The Minister of Finance’s billion-dollar family business, Morneau Shepell, is also conveniently exempt. That is unfair.

It is our duty and our responsibility to carefully review each of the government’s measures. That is just fine, and we are open to discussions. In fact, we are open to true discussions, not 75 days of consultation during the summer.

Will the member agree to extend that to January 31? I am sure he will.