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EDITORIAL: Wait and see on tax changes


Premier Wade MacLauchlan and Prince Edward Island’s MPs – Liberals all – seem to have a communication problem.  

While the premier was busy firing off letters to federal Finance Minister Bill Morneau and attending meetings in Ottawa to extend public input on proposed tax changes, our MPs were just as busy voting down a motion on an extension.
The premier might have delayed his entry into the fray, and declined to take a firm position on the changes, but in the end, placed him on the side of reason. He heard arguments from doctors, lawyers, farmers, fishermen, chambers of commerce and others – who have used incorporation to reduce their income tax burden - that the changes are punitive and more time is needed to assess their impact.
It also seems that just as many other Canadians simply prefer that we all pay our fair share of taxes – no more, no less – and that loopholes are closed.
After sending off a letter to the finance minister last Thursday, Premier MacLauchlan went national on Tuesday during a session with Mr. Morneau in Ottawa as part of a meeting of Canada's premiers.
Meanwhile, our four Liberal MPs are confident the federal government heard tax concerns ‘loud and clear.’ But they seemed unmoved by them. Three of P.E.I.’s MPs voted against a request for more consultations, saying this would only prolong the anxiety and uncertainty being felt by business owners. It’s like rejecting a stay of execution while appeals are being made. The odds are much better with the stay and appeals; instead of heading for a midnight deadline with the hangman.
The minister could certainly have extended the rushed consultation period to the end of January. There is no harm in additional consulting, even if the same arguments are made. He’d have a better chance to convince opponents the changes are needed; or he could negotiate suitable amendments in an open forum.
Our MPs said they heard a significant level of concern, but with no new arguments forthcoming, the time had come to end the uncertainty. Businesses might not like uncertainty but they like paying more taxes a lot less. One thing that the consultations did uncover was that the proposed changes would disproportionally tax family farms that transfer property to the next generation. There might be others.
So our MPs placed their faith in the hope that Mr. Morneau will come back with defensible amendments. The premier was more cautious, seeking clarity on language, along with more engagement and consultations. It worked, as the minister committed Tuesday to ensuring transfers of family farms are not negatively impacted.
Mr. MacAulay notes than once the final tax package is tabled, it still must be debated in Parliament, go to committee for discussion and possible amendments and then return for a final vote. That’s all true, but for now, we must blindly trust Mr. Morneau to do the right thing.
Let’s hope Mr. Morneau did listen and will act. At this point, we’ll just have to wait and see.



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