Once in a while here in Canada democracy works, as when people speak out loud enough, and long enough, the government occasionally pays attention to what they’re saying, and they act accordingly.
The disconcerting part is, this doesn’t happen very often, and that ought not to be the case in a democracy.
Canadians got a taste of democracy in action on Monday, when the Trudeau government backed down on some of their changes to business taxes, after Canadians of all walks of life lambasted plans by Finance Minister Bill Morneau to penalize small businesses, including small operations like family farms.
Among other things, Morneau was proposing to close what the Liberals called “unfair” tax loopholes, such as family members working at the family business (including family farms, where it’s normal for family involvement throughout the operation) being paid by what Morneau calls “sprinkling” of income. This measure is still going to move forward, but supposedly it will be changed.
In town hall meetings and interviews, the Finance minister claimed that two-thirds of small businesses would not be affected by his proposals. The protests came anyway, because the very things he was proposing would in fact impact their business. And what about the third of all small businesses that would be affected?
If the proposals weren’t as bad as he was claiming, why does he think that Canadians from nearly every walk of life were so against the measures? It was precisely because the tax measures were in fact unfair, not the so-called tax loopholes, and so the response will be to lower the rate of business tax as the Liberals scrambled to regain some of the support they were losing. Even members of the Liberal caucus had called out Morneau on these proposals, and that should’ve told him that these really were bad ideas, especially when he floated the idea of actually taxing employees on their tiny staff discounts from the retail outlets they worked for.
Unfortunately, not all of the proposed measures are being scaled back, and one of the changes announced Monday will take a while before it’s reality. The tax rate on small businesses will be reduced from its current 10.5 per cent to 10 per cent by January, and by 2019, down to nine per cent. It should be pointed out that the Liberals had promised this back in 2015. By the time it’s in place, it will be four years after the promise was made, and it’s being done in response to the massive protests against the tax changes. The lesson Canadians should take is, democracy works, but don’t let up on it. — Greg Nikkel
