By Canadian Press

Thwarted emergency debate on tax reforms not the end of the discussion

Sep 29, 2017 | 12:30 PM

OTTAWA — A Conservative bid for an emergency debate on the Liberal government’s controversial small business tax proposal was thwarted Wednesday, but that does not mean they — nor the public — are out of options for sharing their views.

“Parliament, and not the government, is the final authority on taxation,” Conservative finance critic Pierre Poilievre said as he called for a House of Commons debate on the proposed changes before consultations wrap up next week.

Deputy Speaker Bruce Stanton, a Conservative MP, ruled the request did not meet the criteria and turned him down.

The proposals, unveiled this summer by Finance Minister Bill Morneau, would eliminate small business tax provisions that the Liberals argue allow some wealthy Canadians to avoid paying their fair share.

That includes restricting the ability of business owners to lower their tax rate by sprinkling income to family members, even if they do no work for the business, and curbing the ability to convert regular income into capital gains, which are typically taxed at a lower rate.

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The proposed changes would also limit private corporations from making passive investments in things like real estate or stocks.

They have sparked a revolt by doctors, farmers, small business owners and even some backbench Liberal MPs, who have spoken publicly about the complaints they have been hearing from their constituents.

Amid the ensuing uproar, the government has insisted they are listening to concerns and open to changes — with several sources suggesting they are open to going back to the drawing board.

The Liberals say they have no intention of extending the Oct. 2 deadline for consultations, but a government source who spoke on condition of anonymity said that does not mean everything will be a done deal by then.

The source, who wasn’t authorized to discuss the matter publicly, said the government is open to working with people, and that there would be a chance to comment on any draft legislation — standard practice for money or other complex bills.

That would especially be the case with the proposal on passive investment, because unlike with capital gains and income sprinkling, Morneau did not release a detailed legislative proposal this summer.

The source also said the Liberal government is committed to the ideas in all three proposals, but will evaluate next steps once the consultation period is over — and has not set a firm timeline for doing so.

Meanwhile, the Senate finance committee will also take a closer look at the proposed changes and report back by the end of November.

“I think there has been a lot of rhetoric thrown around on all sides, and that’s where the Senate of Canada can do a great job of sober second thought,” Sen. Andre Pratte said Tuesday in the Senate Chamber.

The Conservatives are also widely expected to make the proposed tax changes the focus of an opposition day motion coming their way next week.

— Follow @smithjoanna on Twitter

Joanna Smith, The Canadian Press