Local business owners warn the federal government's small business tax proposal will have damaging effects on everyone.
In July, the Trudeau Liberals announced plans to close "income splitting loopholes" that allow wealthy Canadians to avoid higher tax rates by distributing money to family members who earn less and are taxed lower.
Sarnia family physician Dr. Sean Peterson says if the government truly wants to go after that 1%, they should do it on the personal income tax point.
"If you increase the marginal tax rate of the top income tax bracket, that would achieve the same outcome," says Peterson.
Dr. Peterson and about 20 other members of the Sarnia Lambton Chamber of Commerce gathered to discuss the tax changes at Manleys Basics in Pt. Edward Tuesday.
Manleys owner Carolyn Leaver Luciani says small retailers rely on their corporate earnings to save for things like maternity leave and retirement.
"Why would you want to have your own business when you could work in the public sector, make more money, have more benefits and you would sleep more so you would be healthier right?" says Luciani. "If I worked for a government job, I would have a pension I'm paying into, I would have maternity leave, I would have benefits, I would have health care, I would have sick days, I would have stress leave, parental leave -- all of those things. Having a small business, you have none of those. You go to work. I had a baby on a Thursday and was back to work on Monday. It's one of those things that you do, because you're a small business owner."
Small retailers agree, increases will be passed onto the consumer.
Lambton Federation of Agriculture President Al Langford
Lambton Federation of Agriculture President Al Langford says the tax changes will also put family farms at risk, by changing how capital gains for family members are taxed, how dividends paid to family members on the farm are taxed and how passive income is taxed.
"The tax burden that will be pushed down for me to move the family farm to the next generation is where it's really going to hurt," says Langford. "I don't understand the reasoning behind it. I still believe that the family farm is the major fabric of this country."
He says under the proposed new tax rules, selling land to a family member would cost three times the amount of tax that a company or neighbour would be charged.
Small business owners are being asked to contact Sarnia-Lambton MP Marilyn Gladu with their concerns so they can be forwarded onto the House of Commons.