Winnipeg, June 28, 2024 – The Canadian Federation of Independent Business (CFIB) is hearing from many concerned small business owners about the Manitoba government’s decision to remove the commission allowance on retail sales tax (RST) remittances - a change which was quietly included in the 2024-25 provincial budget.
Before this change, businesses collecting and remitting the retail sales tax for the provincial government received a small commission of 15% of the first $200 of tax collected and 1% of the remaining tax, up to $3,000. The maximum commission permitted per period was $58, and if the RST reported in a period was more than $3,000, no commission was allowed.
For small businesses, these commissions could total up to $58 per month, or $696 per year. These may not seem like large sums, but for businesses that are struggling to keep up with skyrocketing operating costs, any amount of money helps.
In response to a recent CFIB survey, nearly half (47%) of Manitoba’s smallest businesses (those with 0-4 employees) said they are opposed to the removal of this commission. Business owners indicated they could use any cost savings to help pay down their pandemic related debt, increase employee compensation, and/or expand their operations.
“The smallest businesses typically do not have administrative assistants, or finance departments to help with tax filing,” said Brianna Solberg, CFIB provincial affairs director. “More often than not, it’s the business owners themselves who are the ones required to set time aside to file these remittances, which ultimately means time away from running their business.”
Not to mention, businesses are also charged merchant fees by credit card companies on top of the 7% RST. Meaning every time a business collects the sales tax for the government, they are also hit with a higher fee from the credit card company. Surely it is not unreasonable to assume the government should compensate – at least the smallest businesses - for the additional costs and time lost due to tax collection, and the retail sales tax commission did just that.
One surprised business owner reached out to CFIB to share their concerns. They only found out about this change when they went to file their RST remittance. “There was nothing in the news about this and I believe that this cut involving the smallest businesses is terrible. I know that it is just a small amount, but small businesses are having a hard time.”
“It is disappointing that the Manitoba government decided to remove this commission allowance without any consultation with the business community,” added Solberg. “Removing the commission allowance sends a signal that the Manitoba government does not care to acknowledge the effort of business owners to collect and remit the government’s sales taxes.”
Earlier this week, CFIB met with the Minister of Finance to share these concerns on behalf of business owners. We also suggested ways the province could offset these added costs for small businesses such as increasing the exemption threshold for the provincial payroll tax or reducing the payroll tax rates – which would be particularly helpful given the upward pressure on wages.
For media inquiries please contact:
Brianna Solberg
CFIB Provincial Affairs Director
(306) 713 – 8071
Brianna.Solberg@cfib.ca
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region, including over 4,000 in Manitoba. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.