N.B. MP Tells Finance Minister Tax Changes Could Harm the Economy
Open Letter to Federal Finance Minister Bill Morneau
Wayne Long, Member of Parliament for Saint John-Rothesay
Minister Morneau,
First, let me say how proud I am to be a member of the Liberal party. I am proud to be part of a government that is progressive, both socially and economically: a government that is doing wonderful things in our riding, throughout our country, and around the world. I am proud to be a member of a diverse caucus. The diversity and strength of my colleagues: this is what, collectively, makes us so effective. Embracing diversity makes us all stronger.
Prime Minister Trudeau has introduced a new style of strong, compassionate leadership – bringing relief to many of our country’s disenfranchised. On the international stage, the Prime Minister has demonstrated balanced statesmanship, improving Canada’s standing in the eyes of the world.
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In economic terms, I offer congratulations on the success and growth of our economy. 400,000 new jobs in 2017. 4.5 % GDP growth, the strongest growth since 2002. Unemployment was down to 6.2 percent in August, the lowest rate since the Great Recession. Canadians made a good choice in 2015. Our plan is working.
Mr. Morneau, I believe in my Party.
Progressive policies, such as the Canada Child Benefit and the Middle-Class Income Tax Cut, have been helping everyday Canadians. Coming from Saint John New Brunswick, the city with the highest child poverty in the country, I see the benefits first-hand. With my team, I experience the personal, emotional thank-yous—constituents offering heartfelt thanks to me and my team for improved federal government policies, in particular the Canada Child Benefit. We see this every day in Saint John-Rothesay.
We both know, Mr. Morneau, that governing comes with many hard decisions and many challenges. Most Canadians agree we need tax reform. Over the past months, I have spoken to hundreds of constituents on this subject. In my riding, a clear majority are in favour of tax reform.
But I feel compelled to write to you with these concerns, not only as the Member of Parliament for Saint John-Rothesay, but also as a former small business owner.
My background is in business. Small business. I understand the huge risks incurred with starting, building, and growing a small business. I’ve lived it. Many people put their houses and their financial futures on the line, to pursue the dream of operating their own business. It is tough, but they do it.
When these entrepreneurs succeed, it enriches us all.
I’ve balanced budgets, worried about meeting payroll, collected receivables, all so myself and my staff could get paid… I’ve lived the hopes and dreams of operating a small business. I know about the sleepless nights and blood, sweat, and tears of small business ownership.
Small businesses employ over eight million people in Canada representing 70 percent of private sector employment.
Small business is the life-blood of our economy: locally, provincially, nationally. It’s the same everywhere, across the country.
As government, we need to do what we can to support small business. A small business should have the ability to grow, save, and invest money they make into their own deferred account. The money is there – for a rainy day, an economic downturn, or to use as collateral to expand.
Passive investment is an effective business mechanism.
Maternity leave, unemployment insurance, health plans, retirement: these programs are left to the internal operations of a small business. Often, the way small businesses manage these costs is through passive investment.
Mr. Morneau, I believe in my heart that some of these proposed changes will discourage entrepreneurship, that they will hurt the very people we, as a progressive government, want to be actively helping.
I share the belief of so many of my constituents that the proposed changes to passive investment within private corporations will have unintended negative consequences.
I cannot support these proposals as they are currently written, without amendments.
Income deferral in the form of passive investment was an important part of my own business strategy, a strategy that was successful for me. Government created this system, entrepreneurs learned how to use it – and now it feels like we are, unintentionally, pulling the rug out from under small business owners.
Mr. Morneau, I applaud your leadership in bringing these proposals forward.
But when you speak about the need to “level the playing field,” you imply entrepreneurs are on the same fiscal “playing field” as Canadians who aren’t running a business – This, with respect Sir, this is simply inaccurate.
There are very different “playing fields” for people who are undertaking the enormous risk of starting a business, and those who get a salary – with the accompanying government benefits. We need to slow down, and take all “fields” into account.
Mr. Morneau, my constituents have delivered a very clear message, a very strong message. They believe these changes will have an impact on the development and spirit of entrepreneurship in my riding. They believe it will have an impact on our local economy.
Many have expressed worry about a local economic downturn, where regional businesses, already in a difficult economic climate, are not growing and expanding. In Saint John-Rothesay, the message is loud and clear. As the elected representative of these small business owners, I feel compelled to bring this message to you.
Running a business in Atlantic Canada is tough. I don’t want to be a part of making it tougher. I feel strongly that we, as government, have missed the mark with respect to passive income. This is difficult for me, but I know I can’t support this legislation as it stands.
Consultation is not about defending – it is about listening. I share the same concerns of my many constituents, that we are moving too fast. We are not fully examining the possible unintended consequences of what is being proposed. Hundreds of constituents have spoken to me personally on this issue; I have been contacted by thousands.
In many cases, people who have come to me are not rich. They are doctors, restaurateurs, and small general business owners: people who have taken bold risks to create their own source of revenue. These constituents from my riding, they feel very strongly that their business model is being threatened.
Many are looking at major cuts, abandoning expansions, searching for lower rental agreements, cutting back on staff, operations, and charitable work.
Many doctors tell me they are looking at moving their practices. These are serious concerns. We need to listen to these concerns, and address them.
In this type of situation, it is important as a government that we pause, we step back, and we allow the time for a proper consultation. We need to fully examine all the consequences of these proposed actions. Let us not forget that our nation was formed with honourable compromise.
It is not my intent to be difficult or obstructive, but I feel I must follow both my head and my heart in standing up against these proposals – I am standing up for small businesses in Saint John-Rothesay, and across Canada.
Let me be clear. I love my government. I love our style of building the economy through infrastructure spending, I love our focus on social development. I just cannot support measures that I feel will have a detrimental effect on small businesses in my riding. I would be failing my constituents.
– Wayne Long, Member of Parliament for Saint John-Rothesay