Canadian small businesses 'stuck in neutral' against US, says CFIB

The group is urging measures to soften the blow of mounting costs and regulatory burden

Canadian small businesses 'stuck in neutral' against US, says CFIB

The Canadian Federation of Independent Business (CFIB) has renewed its call to reduce tax burdens on small businesses as Parliament comes back into session and a new election year approaches.

"On top of escalating trade tensions that marked the past summer, small businesses are facing increasing cost pressures at a time when US competitors are seeing their tax and regulatory burden go down," said CFIB President Dan Kelly in a statement released Monday. “In light of looming tax hikes, we're calling on government to take immediate action so small businesses can grow, succeed and fuel the prosperity that benefits us all.”

Kelly said that new data reflects record highs in small-business optimism in the US, as opposed to Canadian small firms that are “stuck in neutral.” The CFIB said that even with an announced drop in Employment Insurance rates, annual increases in CPP rates over the next five years starting in 2019 will squeeze employee paycheques and employer payroll budgets.

Tax changes introduced in 2017 have also put added regulatory and fiscal burdens on many small business owners, though Kelly said there are still possible ways to soften the blow. “Exempting spouses from the new income sprinkling rules and grandfathering existing investments from the new passive investment rules would go a long way towards improving business optimism,” he said.

The CFIB also sent a letter to all MPs suggesting other measures, such as allowing small businesses to deduct costs on new equipment or technology and creating a permanent lower EI rate for small businesses and an EI holiday for hiring youth. In its response to the government’s announcement of a small drop in EI rates last week, the group also suggested an EI tax credit for hiring and training employees, as well as gradually moving the split in EI payments between employers and employees to 50/50.

“We're looking forward to this new session and to working with all parties to strengthen Canada's business environment," said Corinne Pohlmann, CFIB senior vice-president of national affairs. "This is their opportunity to take concrete actions to show small business owners they care in the lead-up to the 2019 election."

 

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