Proposed Federal Tax System Changes Will Have Significant Costs to Automotive Businesses

ARA Members,

According to announcements made by the federal Finance Minister this summer, changes are coming to the federal tax system that will have serious negative impacts on small businesses.

Despite the intent of these changes, which are to prevent tax evasion and plug loopholes, the actual impacts will be to punish all small business owners who are running legitimate operations. As you are all well aware, small businesses are the backbone of our economy in BC.

The automotive industry in BC accounts for tens of thousands of family supporting jobs. It is also a heavily capital-intensive industry that relies on its owners to reinvest in their businesses to stay current on changes in automotive repair, recycling and recovery standards.

As part of our work to advocate for industry, we are suggesting that you contact your local MP, the Finance Minister and the Prime Minister and let them know your thoughts on the proposed changes. We have drafted a letter as a template if you wish to use it click here. Also for a list of MPs that you can search to find your federal representative click here. This important issue is relevant to those of you who have incorporated businesses, and will therefore find themselves with larger tax burdens under the new proposed tax system.

Among other things, the changes will see greater scrutiny on compensation to family members working in your business, extremely high tax rates on profits used to reinvest in your business, and challenges to your ability to implement a succession plan for your children to take over the family business.

Let your MP know what you think of the proposed tax changes. All input must be provided by September 16 so don’t delay sending your letter. 

Sincerely,

Ken McCormack
President & CEO
Automotive Retailers Association