Toronto, September 21, 2023 – With Parliament back in session this week, two-thirds (66%) of small businesses want the government to focus on reducing the overall tax burden in the next six months, according to recent data from the Canadian Federation of Independent Business (CFIB). Other top priorities include flexibility around repayment of COVID-19 loans (57%) and reducing red tape (47%).
“The hits just keep coming for small businesses. Firstly, they were misled by the government’s announcement on CEBA. The 18-day extension of the forgivable deadline feels like an insult for many still trying to make a dent in their debt. This extension misses entirely the most critical concern, and businesses will struggle to come up with the necessary amount in the next few months,” said Jasmin Guenette, Vice-President of National Affairs at CFIB. “Secondly, the Employment Insurance (EI) rate increase will cost businesses and employees $1.4 billion in 2024. The surprise hike, despite the promised rate freeze in the most recent federal budget, is another blow to small businesses and is coming at the worst time given all the ongoing cost pressures. This increase in payroll taxes will have a tangible impact not only on employers, but their employees as well, many of whom will see their paycheques go down. We are calling on government to reject the proposed EI increase.”
CFIB’s recent report highlights how payroll taxes drive up the cost of doing business and cut workers’ take-home income, and includes recommendations to governments.
If Parliament reduced the overall tax burden, 63% of business owners would use the savings to pay down their debt. Over half (56%) said they would increase employee compensation such as wages and benefits, while another 46% would expand their business (by innovating and/or increasing production).
To provide small businesses with more ability to invest in their future, CFIB is recommending the government:
- Further extend the forgivable CEBA deadline for an additional year to December 2024
- Reject the proposed Employment Insurance (EI) premiums
- Freeze the carbon tax at its current level and find a simple way to return the carbon tax collected from small businesses back to them
- Lower the federal small business tax rate from 9% to 8%, at least for the next two years
- Increase the small business deduction threshold (e.g. to $700,000) and index it to inflation going forward
- Expedite the passing of Bill C-234 to exempt natural gas and propane used for on-farm activities from the carbon tax
- Strengthen competition rules to ensure a level playing field between Canadian small businesses and multinational giants
“Members of Parliament should focus on policies that will help small businesses deal with sky-high costs and give them more leeway to deal with financial pressure, like extending the CEBA forgivable deadline and freezing the carbon tax, the alcohol excise tax and payroll taxes,” said Corinne Pohlmann, Executive Vice-President at CFIB. “Now is the time for the federal government to step up and do the right thing by taking some concrete action to help lower costs for small businesses still trying to recover from the impacts of COVID.”
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
Methodology:
Final results for the Your Voice – July 2023 survey. The online survey was conducted July 6-25, 2023, number of respondents = 2,786. For comparison purposes, a probability samples with the same number of respondents would have a margin of error of +/-1.9%, 19 times out of 20.
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. 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.
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