CME: Federal government's CCPC tax reforms could have devastating consequences on small manufacturers
TORONTO, Oct. 2, 2017 /CNW/ - Canadian Manufacturers & Exporters (CME) have assessed, after sound economic analysis and in-depth consultation with our membership, that the proposed tax reforms to Canadian-Controlled Private Corporations (CCPC) pursue a too-narrow definition of tax fairness and could have a negative impact on many small manufacturing businesses.
"Manufacturers are urging the government continue to encourage entrepreneurship, growth and investments by revisiting the proposed changes," said Dennis Darby, President & CEO of CME, "We are suggesting the government does this by working towards longer-term and more comprehensive reforms to create a tax system that is simple and equitable."
Small businesses are the engine of the Canadian economy and of our middle class. In the manufacturing sector alone, there are nearly 68,000 companies with fewer than ten employees and another 20,000 with fewer than 100 employees. Many of these manufacturers are CCPC's and collectively they employ over 1,000,000 Canadians. "Small manufacturers are asking the government allow them to continue to focus on growing our economy and our middle class by considering solutions that will reduce their tax and administrative burden," stated Darby.
CME is committed to finding solutions that deter tax-avoiding behaviour and reward entrepreneurship, active investments, innovation and risk taking. We have assessed that the government could achieve its objectives by continuing the allow income splitting amongst spouses but, no longer with children under 24 years of age. We are also proposing the government creates a tax credit for CCPCs that allows them to claim 110% of their labour and capital expenditures against taxable income. This would lower the company tax burden and encourages employment and investment but only for companies that are not tax-avoiding shells.
About the Canadian Manufacturers & Exporters:
Since 1871, Canadian Manufacturers & Exporters has been helping manufacturers grow at home and thrive around the world. In 2016, CME released Industrie 2030 - a roadmap for doubling Canadian manufacturing activity by 2030. Our focus is to ensure the sector is dynamic, profitable, productive, innovative and growing. We aim to do this by strengthening the labour force, accelerating the adoption of advanced technology, supporting product commercialization, expanding marketplaces and, most importantly, ensuring a globally-competitive business environment. CME is a member-driven association that directly represents more than 2,500 leading companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada's exports.
SOURCE Canadian Manufacturers & Exporters
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