Don't change passive investment rules businesses urge Fed

Survey reveals what small businesses want to hear today

Don't change passive investment rules businesses urge Fed
Steve Randall

The Canadian Federal Budget today (Feb 27) is being highly anticipated by small businesses who are very concerned about proposed tax changes.

New survey results from the Canadian Federation of Independent Business show that changes to passive investment rules are worrying business owners, even though there is a proposed $50,000 allowance and a reduction in the small business rate to 9%.

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The survey reveals that 86% of small business owners with passive investments believe their business will be negatively affected by the proposed rules and 94% it would be harder to keep savings for emergencies or growth.

“Small businesses are at the very heart of our economy and the federal government’s role should be to promote an environment which is conducive to their growth and competitiveness,” said Dan Kelly, CFIB president.

What small business owners use passive investments for
The top reason why small business owners say they have passive investments is for retirement savings (71%).

Keeping the business afloat during hard economic times is cited by 56%, growing the business by 53%, and buying new equipment or technology by 46%.

“Small business owners have been clear regarding their concerns, and 94% urge the government to abandon the proposed changes to passive investment rules. We hope they won’t be let down,” concluded Kelly.

The finance minister Bill Morneau will deliver his budget at 4pm ET on Thursday Feb 27.