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The Conservatives have taken up the dissenting cause, and are holding events to mobilize opposition to the proposal.

On Parliament Hill, newly minted finance critic Pierre Poilievre told reporters it’s Morneau who is creating two classes of taxpayers, and shared anecdotes of business owners who told him they will have to cut back on hiring and expanding if the changes go through.

But then said he shares the goal of not allowing tax avoidance.

“I think that everyone should pay the same rate of tax on their income,” he said, claiming the government’s plan won’t achieve that.

Photo by Sean Kilpatrick/The Canadian Press

“We believe that any small-business persons should be allowed to employ their family members to do legitimate work, and to compensate them in equity and in salary accordingly,” he said. “We think that’s fair.”

Yet this is exactly what the government also says it hopes to do. The proposal outlines a “reasonableness test” to ensure all family members named as shareholders in a private corporation have legitimately earned the dividends, rather than simply getting them for tax purposes.

Doctors would be badly hit by that change, as about two-thirds of them across Canada are now incorporated for tax reasons. Some provinces gave doctors the right to incorporate and sprinkle income among family members as a concession in fee negotiations, and doctors are now furious to see the federal government planning to remove that option.

The tax code is not the way we should be deciding how to compensate people

Morneau recently met with medical associations to hear their concerns, but told reporters his mind hasn’t changed — even when it was brought up that provinces encouraged doctors to do this.

“They did talk to me about the fact that their compensation was negotiated with the provincial governments on the basis that you identified,” he said. “My response is that the tax code is not the way we should be deciding how to compensate people.”

If the change goes through, provinces will have to deal with angry doctors in future fee negotiations. But Morneau declined to elaborate on what provinces think of this tax change.

“I haven’t engaged with provincial governments on this subject,” he said.

• Email: bplatt@postmedia.com | Twitter: btaplatt