By Tracy Wates
Small businesses in Centretown say they aren’t impressed by the new Liberal federal budget promising tax cuts and economic relief.
Peter Harris, executive director for the Preston Street Business Association, says the businesses in his organization are fed up with the government.
He says the sentiment also extends to high taxes and that this is only the beginning of what he calls a tax revolution.
He says though tax cuts are a step in the right direction, sales tax at all levels of government needs to be lowered so that it doesn’t exceed 10 per cent, as opposed to the current 15 per cent (eight per cent PST and seven per cent GST).
He also says Preston Street businesses feel resentment toward government bureucracy and feel the government doesn’t understand the value of a buck like they do.
Mark Rozanski, owner of Goldart Jewellery Studio on Bank Street, says though any tax cut is good, this one wasn’t big enough and didn’t cover enough areas of tax.
The Canadian Jewellery Association, of which he is a member, is fighting a 10 per cent luxury tax on gold, diamonds and other precious stones used in their trade.
“You can buy a luxury yacht for $60,000 and you don’t pay it, but buy a small engagement ring and you pay it,” says Rozanski.
Rob Giacobbi, who owns Wilde’s and Zaphod Beeblebrox 2, both on Bank Street, says it doesn’t matter how much the federal government lowers taxes because the municipal or provincial governments will raise their levels and offset any gains he might have received.
Giacobbi says he is tired of the way the government treats small businesses. He says it should “get out of the business of running businesses”.
“It’s so hard to make money in small business in Canada, I’m surprised why people do it,” he says.
The Liberal 2000 budget, released Feb. 28, targeted small businesses by lowering personal income taxes, reducing the corporate tax level and allowing a $500,000 tax-free rollover for investing in businesses.
Currently, if you take money out of one investment to finance another, you pay tax on it, creating a disincentive for investors to move their money.
Now, they can move up to $500,000 without paying tax on it during the transition.
This, says Garth Whyte, senior vice president for the Canadian Federation of Independent Businesses, will encourage investment by so-called “angel investors” — wealthy individuals who want to contribute money to growing businesses.
Whyte says the budget is a very positive budget and it shows the federal government is finally recognizing the importance of small business to the economy.
However, he says he isn’t surprised by the less-than-enthusiastic reaction of some businesses.
“The country is feeling tax fatigue,” he says. “They are currently filling out their tax returns and they won’t see relief until next year.”
Gerry LePage, executive director of the Bank Street Promenade, calls the budget “friendly” and says it is symbolic that the federal government is starting to give back.
“It’s a much better trend line to give taxes back than greater amounts being heaped up on us,” says LePage. “Is it enough to satisfy the public? No. But it must be seen positively for what it is.”