CFIB says there are some urgent measures needed to support businesses
Canada’s federal finance minister Chrystia Freeland will deliver the 2023 Fall Economic Statement in the House of Commons at 4pm ET today (Nov. 21) and small businesses are hoping for support.
The Canadian Federation of Independent Business says there are several key measures that are required to support the backbone of the Canadian economy, as many small businesses are struggling to stay afloat due to inflation, interest rates, tougher trading conditions, and debt.
"The future is not looking bright for many small businesses who are getting squeezed by rising costs on all fronts. Between high interest rates, pandemic debt loads, weak domestic demand and labour shortages, business owners haven't had a normal month of sales in over three years," said CFIB's president Dan Kelly. "We're urging the government to do more to help small business owners and not put the future of viable businesses at risk."
One of the most pressing matters is the repayment of the Canada Emergency Business Account loans. CFIB wants the government to extend the deadline for the forgivable portion of the loans to December 31, 2024.
"The federal government's recent announcement of an 18-day extension to the forgivable deadline is not what small businesses were looking for. It didn't address the most critical and pressing deadline small businesses are worried about. They will lose the $20,000 forgivable portion of the CEBA loan unless they have the money to repay by January 18, 2024," Kelly said. "Too many small businesses are just not back to normal given the current economic conditions. The time to act is now."
Cost of doing business
The cost of doing business is another major consideration and CFIB wants the government to cancel the rise in Employment Insurance and work to reduce the premiums paid by smaller businesses.
It’s also calling for a delay in the phase-out of the Accelerated Capital Cost Allowances measures and make immediate expensing permanent to encourage businesses to invest in automation to help address labour shortages, and for an increase in the small business deduction threshold to $700,000, the lifetime capital gains exemption to $1.2 million and index both to inflation.
"The surprise EI rate increase for 2024 will cost businesses and employees $1.4 billion in 2024. This rate hike is another hit to small businesses and is coming at the worst time," said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB.
The federation also wants carbon tax exemptions extended, further increases in the tax to be cancelled, and immediately return all promised funds to all small businesses that paid into the tax; it estimates that just 0.17% of $22 billion collected has been returned between the 2019-20 and 2022-23 fiscal years.
Finally, CFIB wants Ottawa to ensure businesses are eligible for rebates or refunds equivalent to the full share of the fuel charge costs they incur (CFIB estimates 40%).
"The federal carbon tax is unfair to small businesses. They pay a significant portion of the carbon tax revenues but do not receive rebates like households do. Halting future carbon tax increases and returning promised proceeds would be most welcome by small businesses," said Jasmin Guénette, Vice-President of National Affairs at CFIB.