How Would Tax Reforms Affect Startups?

Finance minister Bill Morneau (Image: The Canadian Press)

Like many entrepreneurs, Alastair Trower recently told his member of Parliament of his outrage about the proposed tax reforms, which are being billed as an attempt to ensure fairness in the tax system.

A veteran of the startup world, Trower heads Cove Business Development, a consulting company that helps Nova Scotian startups bring products to the market. He has added his voice to the chorus of entrepreneurs opposed to the federal government’s proposals — the consultation period for which ends Monday.

“The easiest thing in the world would be for me to shut my business and get a job in one of the three layers of government,” he said in a recent missive to his MP.

“I won’t do that because I fundamentally believe that small businesses are the engine of the economy, the catalyst for change, and the required inspiration for the new and future contributors coming out of the education system.”

Trower is, of course, not alone among entrepreneurs who oppose the moves. David Campbell, a New Brunswick consultant and the region’s best economics writer, has tracked the response and say 95 percent of the public commentary has opposed the reforms.

One question that needs to be answered is how much these changes in the tax system will affect the startups that Trower spoke on behalf of — the tech, cleantech, and biotech companies that can spend years commercializing technology before they’re profitable. It has been difficult to assess given that a) the rhetoric has got a tad heated, and b) the tax system is mind-numbingly complex.

Read more about this story in Entrevestor.