Impact of federal tax changes on average business in Sask. 'virtually nil': Goodale

Saskatchewan's lone federal Liberal says he's heard the message "loud and clear" from business owners concerned about federal tax changes.

Ralph Goodale described a 75-day consultation period this fall as "turbulent," with the Liberal government retreating from proposed changes to capital gains and farmland inheritance rules.

The Regina member of Parliament said his government will still proceed with the new rules. 

"The average business enterprise, the average farm in Saskatchewan, the impact of the change will be virtually nil," said Goodale.

The Liberals' proposal has been tweaked to allow up to $1 million in passive investments be kept in a small business which will ensure "flexibility to ensure they can have a retirement plan that makes sense."

The government has now set clear guidelines for "income sprinkling," to ensure payouts are only made to family members that actually play a role in the company. The Liberals scrapped proposed changes to the capital gains regime.

Last week, farmers, the president of the Saskatchewan Medical Association and other business leaders urged the Standing Senate Committee on National Finance to drop or delay those changes.

Business community 'feels attacked'

"Frankly, the business community feels attacked," said Steve McLellan, the CEO of the Saskatchewan Chamber of Commerce during senate hearings at Saskatoon's Delta Bessborough hotel.

He said uncertainty around the proposed changes is deeply unsettling.

McLellan told senators some businesses that were considering expanding or hiring new employees are putting off those changes, until they see the final draft of the tax legislation.

"Are you looking for money? There are better ways of going about it," McLellan said.

Farmers question Ottawa's objectives

The president of the Agricultural Producers Association of Saskatchewan told senators expensive equipment and rising land values will hurt farmers at tax time.

This is seriously going to affect people's lives.- Todd Lewis, Agricultural Producers Association of Saskatchewan

"It's not uncommon now for even a small farm to be worth three, four or five million dollars on paper," said Todd Lewis.

He said taxing passive income after the first $50,000 amounts to double-taxation, and will severely restrict retiring farmers' ability to rent out their land.

Lewis warned Ottawa that rushing tax changes through "will have unintended consequences."

"One of our members talked to three different accountants and got three different answers," said Lewis. "This is seriously going to affect people's lives."

Goodale slams 'misinformation and disinformation'

Goodale said the Canadian Federation of Agriculture considered changes to the initial proposals "a major, major improvement."

"People will have ample opportunity to review the details precisely to make sure there are no — repeat, no — unintended consequences," said Goodale, 

The federal government has now received more than 21,000 submissions online from people concerned about the changes.

Goodale said the changes will affect only Canada's wealthiest citizens.