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Many MPs May Be Clueless When They Vote For Liberal Tax Changes

If they go through as proposed after only 75 days of consultation, one can only conclude that this was not a democratic process.
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Finance Minister Bill Morneau heads from the podium after talking with reporters as the Liberal cabinet meets in St. John's, N.L. on Tuesday, Sept. 12, 2017.
Andrew Vaughan/The Canadian Press
Finance Minister Bill Morneau heads from the podium after talking with reporters as the Liberal cabinet meets in St. John's, N.L. on Tuesday, Sept. 12, 2017.

What is happening to our democracy?

Do we not elect people to represent us in Ottawa? Isn't it important for those representing us to know what they're voting for?

Members of Parliament (MPs) have an extremely important role to play in the development of our country. Often they're asked to make decisions based on limited information. Every year, hundreds of bills are put forward. Some have limited effects, while others can have far-reaching impact.

MPs come from a variety of backgrounds and have different skill sets. Their individual knowledge on different subjects can vary widely, consequently, they can't be all-knowing on every bill they're asked to vote on.

There are different ways that MPs can get background information on various bills, however, the bills are often so complex and so far reaching that it's impossible to ask anyone to understand the complexities.

My fear is that most, if not all, of the backbenchers in the Liberal party have been playing follow the leader.

I'm concerned that the recently released tax change proposal, which looks to limit income splitting and stifle corporate investments, is one of those situations where a great number of MPs have no idea what they're agreeing to if they vote yes to the changes.

Countless letters have been sent by concerned citizens to their MPs. In many cases, these citizens have received a standard form letter back acknowledging their receipt. In other cases, the author has been able to speak directly to their MP. On a number of occasions, we've also heard that MPs simply don't believe what their constituents are saying.

During a town hall meeting on Sept. 6, Justin Trudeau was quoted as saying, "People who make $50,000 a year should not pay higher taxes than people who make $250,000 a year." This has been circulated amongst the Liberal leadership, and has been disseminated to the public to support the proposed changes. The problem is, the math doesn't add up.

Peter MacIntosh, CPA, CA is a partner at White Kennedy LLP in Kelowna, B.C. He recently wrote an open letter to Liberal MPs that challenges that statement and disproves the idea that anyone earning $250,000 would ever pay less tax than someone making $50,000 per year. I encourage you to read it here.

Prime Minister Justin Trudeau speaks to media after the federal Liberal party caucus retreat in Kelowna, B.C., on Thursday, Sept. 7, 2017.
Ben Nelms/Bloomberg via Getty Images
Prime Minister Justin Trudeau speaks to media after the federal Liberal party caucus retreat in Kelowna, B.C., on Thursday, Sept. 7, 2017.

Mr. Trudeau has been asking his MPs to simply follow his lead and has used misinformation, not the truth, to communicate how this is going to affect middle-class Canadians.

Since the proposal was first released in July, the Liberal government has told half-truths, used misdirection, and in some instances, as pointed out by MacIntosh, lied outright.

Over these past eight weeks, there have been hundreds of articles written and innumerable radio and TV discussions. There have been hundreds if not thousands of submissions and analyses done by some of the largest and most well-respected accounting and law firms in Canada. By Oct. 2, there will be countless more.

I think it's unreasonable to expect most MPs to digest that much information, let alone understand it. So how can they be expected to vote on such important changes in the short time allotted?

My fear is that most, if not all, of the backbenchers in the Liberal party have been playing follow the leader. Based on the magnitude of these changes, I don't think now's the time to blindly follow a leader who's been propagating "alternative facts."

Since taking power, and throughout his campaign, Mr. Trudeau has talked about the one per cent, and how they use tax loopholes that are not available to middle-class Canadians.

Do you see one name on that list who's a physician, farmer, or small-business owner?

John Nicola of Nicola Wealth Management brought our attention to another list. This is a list of CEOs with sizeable pension benefits who take advantage of significant tax deferrals. If Bill Morneau and Justin Trudeau are looking to limit tax deferrals by the one per cent, perhaps they should start by reviewing those who are benefitting the most from deferrals. This list can be found here.

On his list of multimillion-dollar recipients, show me the name of one small business owner. How about the name of a professional or a dentist? Justin Trudeau is not going after the wealthy. That is simply another lie.

If we are to remain a strong democracy, our elected officials have a duty to represent the people who elected them. They have a responsibility to listen to those they represent and to ensure their voices are heard. They should not be forced to vote in favour of things they can't possibly come to understand in 75 days.

If these changes go through as proposed after only 75 days of consultation, one can only conclude that this was not a democratic process.

Yes, the Income Tax Act needs to be changed, it always does. No matter which laws are passed, there will always be some loopholes. Yet, Mr. Trudeau and Mr. Morneau's use of the word loopholes, in this case, has been deceptive. Honest people have been following existing rules and there is nothing sinister about their actions.

People over age 65 can split their pension income, this is called income splitting. Private corporation owners can split income with family members by way of dividends. This is also income splitting. Why, according to these gentlemen, is one considered income splitting and the other a "loophole"?

I don't think it's fair to anyone (private corporation owners or MPs) to make these decisions in such a short period of time.

If these changes go through as proposed after only 75 days of consultation, one can only conclude that this was not a democratic process.

There are alternatives being presented and there are always ways to improve, but these things take time. 75 days simply isn't enough.

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