In this episode, we talk with the Chair of the Conservative Party of Canada's Tourism Outreach Caucus, Blake Richards, about the impact of the Liberal government's proposed changes to the Small Business Tax Deduction on the tourism industry.
00:00:00.000You're listening to The Blueprint, Canada's Conservative Podcast.
00:00:08.960Well, they thought they were going to have an easy day over there today, but not so fast, Mr. Speaker.
00:00:16.600What is it going to take for the Prime Minister to have any respect for any laws in this country that may curb his out-of-control behaviour?
00:00:25.320And now, here's your host, Tony Clement.
00:00:31.280You're listening to The Blueprint, Canada's Conservative Podcast, the official podcast of the Conservative Party of Canada.
00:00:37.900And I'm your host, Tony Clement, Member of Parliament for Paris Saint-Muskoka.
00:00:41.740And with me is Mr. Blake Richards, Member of Parliament for Banff-Airdrie.
00:01:02.440We've got a lot of interest in tourism amongst our caucus.
00:01:06.000And that's because I think that our caucus recognizes really well that tourism plays a really important role in our economy.
00:01:12.200I mean, we only have to look at tens of thousands.
00:01:15.020It's almost 200,000 businesses that are employed, I guess we'll say, by the tourism industry.
00:01:21.880And then you will look at 1.6 million Canadians that have a job that relates to the tourism industry.
00:01:27.780So we all get that it's important to our constituencies because it's important in every community all across the country.
00:01:33.880And one that creates a lot of economic activity for our country.
00:01:39.700And so the Tourism Outreach Caucus, we get together, I'm a member of this caucus too,
00:01:44.080we get together on a regular basis and discuss tourism issues, and not only from a parliamentary point of view, but from an economic point of view.
00:01:52.260And one of the issues that came up, of course, was something that was unfairly targeting campground owners and other small operations.
00:02:01.240Tell us a little bit about what the Liberal government is trying to do here.
00:02:06.960I just actually came from the industry committee where I was asking the tourism minister about this based on a letter that she and the Minister of Revenue
00:02:15.720and also the Minister of Finance had co-authored to some of the campground officials.
00:02:21.160And it's really quite shocking what they're essentially telling these small businesses.
00:02:26.240There's actually many storages that have been affected as well.
00:02:28.540And we're really concerned it could be a lot of other, it could be golf courses, it could be bed and breakfasts, it could be a lot of marinas.
00:02:34.500There's a lot of potential businesses that could be affected here.
00:02:37.540So far, it's been confined to those two particular industries.
00:02:40.620And so what it's essentially doing is they're saying they're too small to be a small business, which I know sounds ridiculous when you think about it on the surface.
00:02:56.860And so there's, to really simplify it, because as you know, the tax code is anything but simple, but we'll simplify it the best we can.
00:03:02.940There's essentially two triggers that would determine whether you can be considered active or passive income for this particular purpose.
00:03:10.220And what it is, is first of all, you've got to have five full-time year-round employees to be able to qualify.
00:03:19.040Well, you can imagine for a lot of tourism businesses, that's going to be very difficult because they're not necessarily year-round businesses.
00:03:26.240Campgrounds are one of those, you know, in fact, in many cases, it's government mandated even that they can't be open year-round.
00:03:52.540We've got campgrounds right now that are in court with the government on this.
00:03:56.660And it's based on what's happened as Revenue Canada has decided that every year they've been doing these things exactly the same as they've been doing in past years.
00:04:19.080So in some of these cases, I think one of the cases we saw was almost about $300,000 that they were, because it's a tripling of their tax rate, essentially.
00:04:58.940But we don't know when we're going to wake up tomorrow when something's different, as far as Revenue Canada's concerned.
00:05:02.880So what we had actually done when we were in government, Tony, was, as you know, in our last budget, we had instituted a review of these rules.
00:05:11.880And the goal was, of course, to try and clarify this so that this wouldn't be something that Revenue Canada could arbitrarily just determine.
00:05:41.060And so what they're doing, the latest thing that's happening with this is they're in a situation now where Revenue Canada says, okay, well, how about you provide us a list of the services you provide?
00:05:49.900And we can try to determine whether you're an active business.
00:05:52.100Well, first of all, anyone who's ever camped knows that, you know, it's not a passive income earned by a campground owner.
00:05:58.260They provide a whole host of services to their guests, right?
00:06:02.760In fact, they probably work as hard as anyone out there I can imagine.
00:06:06.480In many cases, it's a small family-run operation, and they're working 24 hours a day almost.
00:06:10.500Yeah, my experience is a lot of these are family-run, for sure.
00:06:13.020Right, and so they can be up at 3 in the morning providing security, or they can be up at 4.30 in the morning to fix, you know, a shower that's not working, or, you know, whatever it might be, right?
00:06:23.740And so they're saying, give us a list of the services you provide.
00:07:18.460Yeah, it actually has been pretty pathetic, really, Tony.
00:07:22.740Over a number of months, we've asked, first of all, we started by, of course, writing letters to the Revenue Minister, the Finance Minister.
00:07:30.220We got, you know, really sort of, it was a brush-off response.
00:07:36.760And, you know, so then we thought, well, we'll take this a little further.
00:07:40.980We'll take, ask about this in question period.
00:07:42.680And over a number of months, I asked this question.
00:07:44.560And we've got the same response over and over again, no matter how many times you try to explain, look, this has clearly been changed.
00:07:51.840We show why it's been, how it's been changed, what's been done.
00:07:55.080We can prove it from looking at our budget, their budget, and the change that was made.
00:07:59.020We can show them the interpretation bulletin.
00:09:13.940And we would then send you a petition that you can distribute to your friends as well and try and gather signatures to try and push for this issue to be changed.
00:09:21.440So you've got to have your say icon and people can click on that.
00:09:30.900Well, I think that's really important.
00:09:32.400And I want to say, I mean, we as a party, first of all, a lot of us came from the small business sector.
00:09:39.320I myself was a co-owner of a small business.
00:09:41.900And secondly, we take it very seriously that we want to be the voice of small business because they're the backbone of our economy and our society.
00:09:48.740So, Blake, thank you for the work that you're doing on this particular issue.
00:09:53.100Thank you for the work you're doing on tourism generally.
00:09:55.980But I think it's very important that we continue to represent small business in our country.
00:10:06.420It's small businesses who are taking the brunt of this, right?
00:10:08.380I mean, first of all, you know, essentially, they've raised their taxes by not following through with the plan to lower the taxes that we had.
00:10:15.160And then there just continues to be a hit after hit, you know, things like carbon taxes and payroll taxes.
00:10:19.940And then there's a number of changes in the last budget that really affect small businesses and hurt them significantly.