POLITICS

Trudeau Touts Proposed Small Business Tax Reforms During Speech To United Nations

The PM's speech largely focused on domestic issues.

09/21/2017 16:57 EDT | Updated 09/22/2017 06:46 EDT
Eduardo Munoz / Reuters
Prime Minister, Justin Trudeau addresses the 72nd United Nations General Assembly in New York on Sept. 21, 2017.

Prime Minister Justin Trudeau's speech to the United Nations General Assembly Thursday included a plug for domestic tax proposals that are angering many small business owners in Canada.

Trudeau's roughly 30-minute address mostly focused on issues in Canada, notably his government's reconciliation efforts with Indigenous peoples.

While he called for global action on climate change, Trudeau made no mention of his government's promised UN peacekeeping mission. He steered clear of other international issues, such as the crisis in Myanmar and North Korea's nuclear ambitions.

In the closing minutes, however, Trudeau worked in a reference to his government's proposed tax reforms, evidently linking them to what he called a global responsibility to reduce inequality "within and among" countries.

"We raised taxes on the wealthiest one per cent so that we could lower them for the middle class and we're continuing to look for ways to make our tax system more fair," he said.

"Right now, we have a system that encourages wealthy Canadians to use private corporations to pay a lower tax rate than middle class Canadians. That's not fair and we're going to fix it."

Conservative MP Garnett Genuis took to Twitter to voice his displeasure about the prime minister's comments.

At a later press conference, Trudeau was asked why his speech was so inward looking in light of Canada's current pursuit of a spot on the UN Security Council.

The prime minister said he shared a Canadian vision of taking care of the most vulnerable and marginalized.

"By taking responsibility for our own mistakes and helping others around the world with their challenges, Canada is clear-eyed and substantively engaged in the hard work of making the world a better place for all of its citizens," he said.

Trudeau added that he has had a number of discussions this week on big international issues, including the plight of the Rohingya in Myanmar.

Tories opposed to proposals


The prime minister's reference to his proposed tax reforms is the latest sign his government will press on with the changes.

Trudeau and Finance Minister Bill Morneau are seeking to restrict the ability of incorporated business owners to lower their tax rates by "sprinkling" income to family members and limit the use of private corporations for passive investments.

The government is also targeting the ability of corporations to convert income into capital gains, which are typically taxed at a lower rate.

The proposals have been panned by the Canadian Federation of Independent Business and Canadian Medical Association, on behalf of incorporated doctors who say they often do not get the same benefits as other salaried workers.

While some Liberal MPs have also spoken out against the proposals, Trudeau and Morneau have argued that the changes are about ensuring wealthy Canadians don't get tax breaks that aren't available to other Canadians.

Watch: Trudeau, Sheer get into heated exchange over planned tax changes

Morneau has pointed to a 300 per cent increase in the number of the incorporated professionals (the "privileged few") over the last 15 years. Small business owners in Canada already pay the lowest income tax rate among G7 countries, he has said.

Still, Tory MPs have hammered the government on the proposed changes in question period all week.

On Monday, Tory Leader Andrew Scheer accused Trudeau of treating hard-working Canadians, who take risks to start small businesses, like tax cheats.

"Liberals wake up every day trying to find new ways to raise taxes," Scheer charged .

Trudeau, in turn, accused the Conservative leader of standing up for rich Canadians at the expense of the middle class. He called him out for not immediately committing to reverse the proposed Liberal changes.

"They invent problems, exaggerate them and then won't act because they know that helping middle-class Canadians matters," Trudeau said.

With files from The Canadian Press