The recent announcement of Prime Minister Justin Trudeau’s impending resignation has left Canada in a state of political uncertainty, causing significant concern among small business owners. Dan Kelly, President and CEO of the Canadian Federation of Independent Business (CFIB), warns that the lack of leadership at the federal level could spell trouble for entrepreneurs nationwide.
In an interview with Canada’s Podcast, Kelly outlined the challenges stemming from the current political landscape. “We effectively don’t have a government at the federal level right now,” said Kelly. “Uncertainty is the enemy of business progress, and we’ve got a huge matzo ball of uncertainty going on.”
Impact of Political Turmoil on Small Businesses
Kelly highlighted the fallout from both the resignation of the Deputy Prime Minister and Finance Minister late last year and Trudeau’s decision to step down after the Liberals choose a new leader. This upheaval has left critical files, such as the implementation of capital gains tax changes, in limbo.
“Small business owners are in purgatory,” Kelly said, emphasizing the frustration caused by the Canada Revenue Agency’s (CRA) premature implementation of the higher capital gains tax rate without legislative backing. “It’s outrageous. Business owners don’t know what the tax rate is, and this lack of clarity could last for years.”
GST/HST Tax Break Fails to Deliver
Kelly also criticized the recent GST/HST holiday, which was aimed at spurring consumer spending. “Only 4% of small businesses believed it would lead to additional sales,” he noted. For retailers and restaurant owners, the implementation process was fraught with confusion.
“One hobby store in Calgary had to evaluate 3,500 items to determine tax exemptions,” Kelly shared, calling the measure an “implementation nightmare.”
U.S. Tariffs and Economic Concerns
The CFIB is also closely monitoring the potential economic repercussions of U.S. tariffs, which have been hinted at by incoming President Donald Trump. “These would be devastating,” Kelly said. He warned that retaliatory tariffs from Canada could severely impact household budgets and small businesses, especially those reliant on imports.
A Call for Political Stability
With an election on the horizon, Kelly stressed the importance of resolving Canada’s political instability. “The sooner we get an election across the finish line with a solid read on who will lead, the better,” he said. “We need effective leadership yesterday.”
Provincial premiers, including Alberta’s Danielle Smith and Ontario’s Doug Ford, have stepped up in the absence of federal action, representing Canada’s interests internationally. However, Kelly underscored the urgency for a functioning federal government to address domestic and international challenges.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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