by Morinville Online Staff
The Canadian Federation of Independent Business is calling on the federal government to use the upcoming budget as an opportunity to help businesses deal with their COVID-related debt, keep business costs down, reduce red tape, and address labour shortages.
“Small businesses are facing higher costs across the board, rising interest rates and lack of staff, at a time when many still haven’t recovered from the impacts of the pandemic. This leaves many of them in a precarious financial position, without an ability to repay their staggering debt loads,” said CFIB’s Senior Vice-President of National Affairs Corinne Pohlmann in a media release Tuesday. “The federal budget must ensure small firms have a pathway to recover and grow in the challenging months ahead.”
A CFIB member server shows that as of February 2023, 57 per cent of small businesses have not repaid their pandemic-related debt, averaging $105,000. The same survey indicates only 48 per cent have seen their sales return to pre-pandemic levels.
Tax and regulatory costs are causing challenges for 54 per cent of small businesses, while fuel and energy costs are affecting 69 per cent, wages 63 per cent, insurance 59 per cent, and product input costs afeect 45 per cent of those surveyed.
“Many small firms are slowly recovering from years of subpar business conditions. Now, they’re getting hit with rapidly increasing costs. Small business confidence is still below the pre-pandemic levels, and there’s a lot of uncertainty around the economy,” said CFIB’s chief economist Simon Gaudreault ion the same Mar. 14 release.
CFIB recommends the federal government to the following:
- Extend the repayment deadline for the Canadian Emergency Business Account (CEBA) to December 2024 or even 2025, consider additional debt forgiveness and implement an appeal process for CEBA loan recipients that are now deemed ineligible
- Pause carbon pricing at the current level
- Lower the federal small business tax rate from 9% to 8%, at least for the next two years and increase the small business deduction threshold from $500,000 to $600,000, followed by indexing it to inflation
Introduce a targeted Employment Insurance (EI) credit for small business
- Deliver on the promise to lower credit card fees for small business
- Create a pathway to permanent residency for lower-skilled temporary foreign workers
- Extend the Accelerated Capital Cost Allowance (ACCA) and make Immediate Expensing of up to $1.5 million permanent to help with capital investments
“Small businesses are doing everything they can to dig themselves out of the hole the pandemic put them in, but the current economic challenges are not making that easy. They want the government to listen to their concerns and take action now. The federal budget must speak to small business priorities and put appropriate policies in place to ensure a strong small business recovery across all sectors and regions,” said CFIB president Dan Kelly.
CFIB’s has posted their full pre-budget submission online.