TORONTO, July 15,
2024 /CNW/ - The Canadian Federation of
Independent Business (CFIB) issued an open letter to all provincial
and territorial premiers ahead of the Council of the Federation
(COF)'s meeting in Halifax this
week, urging them to raise small business priorities in their
discussions.
Given the high costs of insurance and wages, as well as
shortages of skilled labour and working capital, it is crucial for
governments to prioritize policies that support small businesses
rather than impose additional cost burdens. Here are four key areas
where Canadian premiers could collaborate to improve economic
conditions for small business.
Capital gains
The federal government recently announced significant changes to
capital gains taxation. While CFIB commends the increase in the
Lifetime Capital Gains Exemption (LCGE) to $1.25 million and recognizes the potential of the
new Canadian Entrepreneurs' Incentive (CEI), CFIB is deeply
concerned about the increase of the overall inclusion rate from 50%
to 66.7%.
If the federal government does not back track on increasing its
inclusion rate, it will make small businesses more vulnerable
during economic downturns. Since provinces and territories would
gain revenue increases from small businesses due to the capital
gains changes, CFIB recommends governments to use extra revenues to
help small businesses, namely by decreasing the provincial small
business tax rate and increasing the small business tax rate
threshold.
Internal trade
Since the signing of the Canada Free Trade Agreement (CFTA),
progress to remove remaining barriers has been disappointingly
slow. When provinces insist on maintaining barriers, they insulate
themselves from competition and new investment. CFIB urges all
governments to prioritize eliminating internal trade barriers and
improving labour mobility, specifically through mutual recognition
agreements.
Federal carbon backstop
A strong majority (83%) of Canadian small businesses are opposed
to the current federal carbon tax system. CFIB estimates that small
firms bear 40% of the costs, yet they are only eligible for 5%
(previously 9%) in rebates.
The current carbon tax framework needs re-evaluation. CFIB
encourages all premiers to strongly advocate for the elimination of
the federal carbon tax and work collaboratively with the federal
government to explore alternative solutions that balance
environmental sustainability with the viability of small businesses
in Canada.
Construction mitigation
Major infrastructure projects are essential but can
significantly disrupt small business operations. CFIB estimates
that impacted small businesses lost 22% of revenues on average over
the last five years and incurred over $54,000 per business in additional expenses due
to public construction projects. CFIB strongly recommends direct
compensation be a part of any construction mitigation plans. If
this is not feasible, governments need to consider offering tax
holidays for affected businesses.
As premiers convene in Halifax
this week, CFIB asks them to use this meeting as an opportunity to
discuss how to strengthen Canada's
economy, with a particular focus on small and medium-sized
business.
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.
SOURCE Canadian Federation of Independent Business