SEATTLE — The head of one of Canada's best-known tech darlings says Ottawa's proposed changes to small business taxes could hamper innovation and prevent Canada from becoming a hotbed for technology giants.
Ryan Holmes, CEO of social media platform Hootsuite, is calling on the federal government to "to look very closely" at the plan because it is causing a lot of concern for entrepreneurs like himself.
Holmes is adding his voice to a growing backlash against the government's mid-July announcement of a plan to end certain tax breaks such as income sprinkling, used by some small business owners to divvy up their income among family members to pay lower taxes.
The government is also proposing to limit the use of private corporations to make passive investments in things like stocks or real estate and restrict the ability to convert a corporation's regular income into capital gains taxed at a lower rate.
Holmes says if the government wants to bring more head offices to cities like Vancouver, it needs to create an environment where startups thrive.
Holmes believes that's achieved by being favourable to entrepreneurs, who benefit under the current regime because their often initially modest salaries are taxed at a lower rate, rather than reducing the amount of capital they have to reinvest and grow.
The Canadian Press