Three in four small businesses most concerned about costs of doing business, CFIB survey shows

by Staff

The Canadian Federation of Independent Business (CFIB) is calling on the federal government to use laser focus with respect to the costs of doing business ahead of the budget on Apr. 16.

A recent CFOB survey indicates 77 per cent of small business owners say the government’s top priority should be rising prices and the cost of doing business, while 74% want a lower overall tax burden.

“Rising costs on all fronts are crushing small businesses, and we’re only three months into the new year. While we appreciate that governments are focused on the cost-of-living pressure, we need to see that same vigour applied to costs faced by small businesses,” said CFIB Executive Vice-President of Advocacy Corinne Pohlmann. “Business owners can’t keep absorbing the hits without negative consequences for their business. They need meaningful government action on cost relief now.”

Among CFIB’s concerns for its members is the Apr. 1 carbon tax jump to $80 per tonne. Additionally, businesses in the alcohol production and hospitality industries will see the annual alcohol excise tax increase by 2%. Employment Insurance (EI) increases and the Canada Pension Plan (CPP) expansion are to begin this year. Business contributions to EI have increased by $200 per employee between 2019 and 2023, while the maximum CPP contribution payable has increased by up to $1,005 per employee within the same timeframe.

“While we welcome news that Ottawa is providing much-needed relief to brewers and is capping the annual alcohol excise tax increase on beer, spirits and wine at 2% for two more years, we want to see more concrete action on other tax hikes that are coming in April,” said CFIB’s Director of National Affairs Christina Santini.

CFIB recommends the following to the federal government:

  • Return the $2.5 billion in carbon tax rebates owed to all small businesses, not just certain sectors, and freeze the carbon tax at its current level.
  • 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.
  • Lower Employment Insurance (EI) premiums for smaller employers.
  • Eliminate the automatic increase on the alcohol excise tax.
  • Introduce a timeline to balance the budget.
  • Reduce red tape.
  • Introduce measures to help businesses invest in automation (e.g., extend the Accelerated Capital Cost Allowance (ACCA) measures and make immediate expensing permanent) and in training (e.g., SME training credit through EI),
  • Introduce measures to help keep and bring more people to the labour market, such as older individuals.

“It’s important to remember that policies that support small businesses also benefit their employees, clients and our communities,” Pohlmann said.. “It’s time for government to step up and make it easier to operate and grow a small business in Canada.”

CFIB’s petition calling for reductions in the cost of doing business has 4,600 signatures as of Mar. 19.

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