<Your Name>
<Your Address>
<City, Province, Postal Code>
<Date of Letter>
<Name of Recipient
<Title of Recipient>
<Address>
<City, Province, Postal Code>

Dear <Name of Recipient>,
I am writing you as I am concerned by recent moves taken by CRA to apply a punitive Personal Services Business (PSB) designation to small businesses across Canada. 
This issue affects me directly – I am one of more than 450,000 Independent Contractors working in a professional capacity across Canada who are potentially affected by this new PSB campaign underway by CRA.  
A bit of background, the PSB issue refers to section 125 (7) Income Tax Act. This passage indicates that any services business with less than 5 employees is at risk of CRA deeming that business to be a PSB, as opposed to a ‘true’ small business. If a business is determined to be a PSB, CRA will disallow all of its typical business expenses, and also retroactively remove its ability to use the small business tax rate, so that it is taxed at Canada’s highest corporate tax rate, along with IBM, CGI and other global players. 
This action is blatantly unfair to small businesses, which has a hard enough time competing with global services companies even without these disadvantages, but that’s not why I’m writing you.  
I am writing about one profoundly toxic aspect of the PSB legislation - the fact that it directly targets services companies with fewer than 5 employees, and places these companies and their founders at the risk of bankruptcy.   
This places a profound chill on entrepreneurs in Canada’s technology sector, which is an incredibly important part of the Canadian economy, and a strategic sector that is building the next generation of high-paying, great-quality jobs in Canada.  
Many people say small business is the heart of the Canadian Economy; in Professional Services and technology sectors, that is exactly who the PSB legislation hurts the most. 
Just about every great technology business starts with fewer than 5 employees or founding members.  PSB legislation puts these firms at a disadvantage, and that means the next generation of these firms will never get there – not because they don’t have the potential to be great businesses, but because of the outdated tax policy that is targeting them at the most vulnerable point in their organizations’ growth. 
Many great technology companies started with fewer than 5 founding members:  
•	Blackberry (Mike Lazaridis)
•	CGI (Serge Godin and André Imbeau)
•	Google (Larry Page and Sergey Brin)
•	Microsoft (Bill Gates and Paul Allen) 

PSB legislation didn’t come out of nowhere – it was passed in the 1970s to deal with people converting their existing employment relationship to a business relationship, which at the time had significant tax advantages.  
Now, after successive generations of Income Tax Act updates, this benefit no longer exists. In fact, Independent Contractors and Small Services Businesses pay more tax than comparable employees. We remit GST/HST/QST on our revenue, in addition to corporate income and personal income tax on our earnings.
What that means is that the PSB legislation is not serving its original purpose, but it is harming the strategic sector of the Canadian economy. To me that sounds like a problem, and I am asking for your help. 
1.	We request that section 125 (7) of the income tax be amended to remove the Personal Services Business provisions originally added in the 1970s.  

2.	If updating the legislation is not possible, we propose that the PSB concept be limited to its original intent, which was to prevent people changing their relationship with a Company from Employee to Business Supplier. To address that, I am joining with the Association of Professional Canadian Consultants to ask the Federal Government to issue an interpretative tax bulletin indicating; 
a)	PSB rules only apply when a person restructures their employment relationship to an Independent Contractor relationship, and 
b)	PSB rules do NOT apply when an independent consultant is working with a Client where there was no prior employment relationship with the Client in the past two years.
Small business is the bedrock of the Canadian economy. To learn more about the PSB issue, and be part of the solution, please visit www.apcconline.com/jointhedebate

Sincerely,

__