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Controversial Changes Facing Stiffer Opposition

Finance Minister Bill Morneau and Prime Minister Justin Trudeau are now facing opposition to their controversial tax proposals from both sides of the aisle, as well as from within their own party.

The plan originally faced stiff opposition from the Conservative party, but within recent days has become a political minefield with MP’s speaking out against the bills potentially harmful effects.

The bill has three proposed changes:

  • The curtailment of “income sprinkling,”
  • The curbing of “passive investment income,” which the government describes as the investment of money left in a corporation, for purposes other than to invest directly in growth.
  • The conversion of a corporation’s regular income into capital gains, which typically attract a lower tax rate.

These three changes have received criticism from mom and pop shops, doctors, and large business’, with most criticism being aimed at the first two aspects of the plan.

Cross Party Opposition

The bill received further opposition from eight members of Parliment from within the Liberal party, who opposed the idea due to potential economic damage. Perhaps most surprising, the bill also received opposition from three members of the New Democrat Party.

MPs Brian Masse, Cheryl Hardcastle and Tracey Ramsey,  wrote a letter to the finance minister urging him to “heed the voices” of doctors, dentists, orthopedists and others who are vehemently opposed to the proposed tax changes

ndp letter1

NDP letter 2

Finance Minister Bill Morneau commented that he’s disappointed by the NDP opposition to his “progressive proposal,” which he contends is designed to “ensure a level playing field for the middle class.”

Medical Opposition

The Canadian Medical Association and provincial medical societies have spearheaded opposition to the reforms, contending among other things that they’ll result in doctors moving to the United States. The medical association has also organized large portions of the opposition movement, playing a central role in explaining the real potential harms of this bill.

Divided Polls

A new Poll by Ipsos on the subject places a slight majority of Canadians in support of the bill, with 56% agreeing to its core values. None the less such a small majority allows for a sudden possible shift in moods, something which the Liberal party has not dealt with yet.

This could very well become the first issue that could seriously harm the Liberal’s favourability in the long term.

 

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