A taxing problems for the Liberals

Finance minister to get an earful about controversial plan to change the tax code.

Kelowna will find itself in the eye of a political storm over the next few days.

With the city hosting the federal Liberal caucus—all 184 MPs including the cabinet and Prime Minister Justin Trudeau—much of the attention is likely to be directed at Finance Minister Bill Morneau and his plan to substantially alter Canada’s tax rules when it comes to “Canadian controlled private corporations,” or, in layman’s speak, small businesses.

While Morneau considers his planned moves closing loopholes some business owners have used to save on the tax they pay, many across this country feel the changes being proposed will have an adverse effect on small business owners, hiking their tax bills substantially, stifling innovation and investment and maybe even killing jobs.

And MPs across Canada—particularly Liberals—have been getting an earful from their constituents since the changes were announced. For many, to add insult to injury, the government is giving just 75 days for public consultation on what has been described as the biggest change to the federal tax code in nearly 40 years.

While Morneau is expected to hear plenty from his fellow Liberal MPs, including Kelowna-Lake Country’s Stephen Fuhr who is hosting his colleagues here this week, for a non-political response the finance minister doesn’t have to venture any further than the Kelowna Chamber of Commerce.

It has blasted the proposed changes after hearing from its members. To say they are upset would be an understatement.

No amount of personal charisma by the PM, selfies with the crowds who will likely follow his every public move in the city or attempts to sooth the concerns of those affected with political rhetoric is likely to work in this case. There’s anger in the air.

And Trudeau is likely to hear that loud and clear when he holds a town hall-style meeting at UBC Okanagan Wednesday night.

There are plenty of issues the Liberal caucus could, and should, be dealing with, while in Kelowna—renegotiating NAFTA, a softwood lumber deal, escalating tensions with North Korea and the U.S. and the reemergence of hate groups. But based on current public reaction, it’s the proposed tax changes.

Will the backlash be enough to prompt the Liberals to backtrack? Time will tell. But there’s nothing as certain to cut the lustre off the political rose as constituents who feel their government is sticking its hand directly into their pockets and scooping out their hard-earned cash.

The Liberals won the last federal election with a number of promises of change. But the moves Morneau is making in relation to taxing small business were not in the game plan—at least not in the one presented to Canadians.

The Trudeau government has done a lot of what it said it would do but also not delivered on some of its promises. And it has done a poor job of explaining why in the latter case. And now this.

If the Liberals do not want to be a one-term wonder in terms of holding on to power, they need to change how they do things.

Voters may have short memories but when they are reminded once a year when they pay their taxes of a move many find unpalatable that could spell trouble getting re-elected.

Alistair Waters is the assistant editor of the Capital News