For almost the entire 48 years of the Canadian Federation of Independent Business (CFIB), small business owners have chosen the reduction of the total tax obligation as their top priority. Small business owners say that high taxes hold back their chances to innovate, expand and create jobs.
Aside from taxes, every Canadian’s take-home pay has been reduced while employers have been spending more since January 1, 2019, due to the increasing employer and employee contributions to Phase 1 of the expanded Canada Pension Plan (CPP). The contribution increases every year for seven consecutive years.
Small firms are also a bit apprehensive when governments are running massive deficits. They know that today’s deficits could be tomorrow’s taxes.
What do small business owners want to see?
The CFIB had been actively presenting the priorities of small businesses to both the federal government and opposition parties before the federal budget was announced on March 19.
A permanent lower Employment Insurance (EI) rate for small business (maybe on the first $500,000 in payroll) would ease some of the burdens of higher CPP contributions and make it easier for business owners to invest more in business expansion as well as hire and train staff.
Small business owners are also looking forward to the election promise of an EI holiday if they hire and train young workers. New workers are needed to address the labour shortage. Last quarter, 409,000 private sector jobs went unfilled.
The CFIB is urging the government to make the tax for selling a business to family members and to third parties the same. Under the current rules, business owners are taxed more when they sell to family members, which they prefer than when they sell to a third party.
The CFIB is appealing to the government for the review of its new passive investment rules and, at least, protect past passive investment streams
Small business owners also want the government to provide them with its plan back to a balanced budget which is important to rein in the introduction of new taxes. Small business owners will be looking at the 2019 budget for signs whether their concerns are a priority to government officials or not. They will also look if the concerns of small businesses are included in the candidates’ platforms as the October federal election approaches.