Just to mention one abuse ...
I start a small business and split the ownership between myself (55%), my spouse (25%), and 2 kids aged 5 & 8 (10% each). The business puts up some equity to buy the house/building the business will operate out of, and pays the mortgage. And each owner is made a director, by virtue of their high ownership stake. The very common practice.
The mortgage interest & all associated shelter cost is a 100% deductible expense, along with directors fees. Assume the business is operated at a very modest profit (after deducting these expenses) for 10 years, wound up, and the house/building liquidated at a net gain of 300K.
Over the 10 years the kids directors fees are paid directly into their RRSP's (or RESP's to be really abusive), ensuring that anything earned on those contributions will be tax deferred. Legal income sprinkling.
Over the 10 years mortgage interest was deductible, and when the property was sold EACH partner got to use a portion of their lifetime exemption - eliminating the tax they would have otherwise paid. Each kid gets 10% of the proceeds and mortgage principal repaid over the years - for zero money down. As this property is a 2nd residence, if you or I had done this there would have been NO mortgage interest deduction AND tax paid on the gain on sale. Legal tax avoidance.
Were it just an ordinary property, and used mostly by folks operating those truly small businesses (retail store, baker, grocer, etc.) that we all would like to do business with - the view might be 'good on them'. The problem is that its not generally used by those truly small businesses (who don't have the capital), and it's often $1 million+ property. Abusive.
And at the extreme, the guys/gals running that business may well be paying less total tax (income + GST/HST) than the temp they have collectively hired to man the phones. Abusive.
Nobody did anything wrong, but most would see it as a sh1tty way of doing business that really needs to be changed.
Which is Morneau's point.
SD