The Voice of Business in Atlantic Canada - Strong, Credible, Unified.
October 12, 2107
Abandonment of Energy East will impact future generations
Megaprojects like Energy East invariably attract intense opinions for and against, and the reaction to the announcement that TransCanada Pipeline (TCP) has abandoned its proposal to build the Energy East pipeline have been a mixture of celebration and concern. But when the reality is that an energy development company can invest $1 billion to respond to approval review processes only to be confronted with a wall of changing regulations and conditions it is time we answer the question whether Canada is interested in providing companies with a stable, predictable investment environment.
Energy East had the potential to create a source of secure and sustainable infrastructure to provide a domestic market for Canadian oil. From a purely economic standpoint, it could have stopped the flow of $30B in revenue each a year to oil producers in foreign countries. It could have provided multiple markets rather than the virtual monopoly pricing of our primary market in the United States. It could have largely decreased the need to transport oil by railcars. It could have provided much needed employment during pipeline construction and operation. It could have provided increased government revenues to western provinces that fund equalization payments to eastern provinces. It could have provided additional revenues to energy companies who are predominant investors in the development of new technologies to reduce greenhouse gas transmission. It could have demonstrated that Canada is open for investment in resource development.
Federal Government Needs to Extend the Tax Consultation Deadline
Businesses across Canada are voicing well-founded concerns about the federal government’s proposed tax changes for privately-held corporations. The proposed legislation is one of the most significant changes to tax regulation in 50 years and the government has provided a mere 75 days (during summer) to provide feedback. The business community needs more time to assess these complex changes to fully understand the wide-spread impact this will have on small- to medium-sized businesses. We need Minister Morneau to extend the deadline beyond October 2nd, 2017 to allow for proper consultation.
If implemented, these changes will drastically degrade the financial stability of all small businesses and not just a group of ‘highly paid individuals who are reluctant to pay their fair share of taxes.’ It will impact all incorporated private business, such as: start-ups, corners stores, farmers, or individuals who offer services like lawyers, accountants and other consultants.
In fairness, no one likes to pay more taxes, but we know the government also needs to reform the current tax legislation to address situations where individuals do not pay their fair share. However, the proposed tax changes on income splitting, holding passive income in a private corporation, and converting regular income into capital gains will apply to all privately-held corporations and not just the minority of high-income individuals.
Why should we care if small businesses can split income among family members, accumulate tax-advantaged savings, or maximize the sale price of their business through capital gains to fund their retirement? Because these changes may stop people from opening new businesses, or existing businesses from re-investing and expanding, or it could cause the prices of everyday products and services to go up as businesses absorb tax increases—all at a time when we need more business, more expansion, more jobs and competitive pricing in Atlantic Canada.