Steinbach city council has approved a resolution calling on the federal government to drop its plans to remove some tax benefits for small businesses. Councillor Susan Penner made the motion.

"I'm concerned about the federal government's proposed changes to the small business tax code and the impacts they will have on the business community in Steinbach. Steinbach is built on small businesses and entrepreneurship. I'm concerned that these changes will negatively impact the risks people are willing to take with their businesses, the investments they'll be able to make with their business and also the impact it will have on their employees and our community as a whole."

The proposed tax changes would, among other things, take away the right of small business owners to split income among family members.

Councillor Michael Zwaagstra, who seconded the motion, says small business owners need these breaks because they take huge risks and don't have many of the protections that salaried employees do.

"The impact on small business is significant because the end result of the changes, whether it be in regards to making it harder to split income among family members or taxing certain passive investments at a higher rate than before, it makes it harder for small businesses to succeed. It'll be harder for them to have savings and to protect their income. And we have to recognize that business owners take enormous risks to set up their businesses and they don't have many of the protections that a salaried employee would."

Despite criticism on many fronts, Finance Minister Bill Morneau is defending his planned income-tax reforms, saying the current system allows business owners to pay lower taxes while a second class of citizens end up with a higher tax bill.