The Canadian Federation of Independent Business (CFIB) says the federal government needs to use the upcoming budget to implement policies that will support small businesses and foster economic growth, including helping businesses deal with their COVID-related debt, keeping business costs down, reducing red tape, and addressing labour shortages.
“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 Dan Kelly, CFIB president.
The CFIB is recommending the government:
- 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 nine per cent to eight per cent, 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 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 Corinne Pohlmann, CFIB’s senior vice-president of national affairs. “The federal budget must ensure small firms have a pathway to recover and grow in the challenging months ahead.”
The CFIB said that 57 per cent of small businesses have not repaid their pandemic-related debt, at an average of $105,000, and only 48 per cent have seen their sales return to pre-pandemic levels.
It said small businesses are also struggling with rising costs on almost every line of their budgets. Tax and regulatory costs are causing challenges for 54 per cent of small businesses. Other cost pressures include fuel and energy (69 per cent), wages (63 per cent), insurance (59 per cent) and product input (45 per cent) costs, added the national organization.
“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.
Here is the CFIB’s full pre-budget submission.
The CFIB is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region.
(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 worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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