High costs top priority for small businesses

With a month to go before the federal government tables its budget on April 16, Ottawa needs to be laser-focused on reducing the cost of doing business, says the Canadian Federation of Independent Business (CFIB).

Over three-quarters (77 percent) of small business owners say addressing rising prices and the cost of doing business should be a top priority for government in 2024, while another 74 percent want to see government reduce the overall tax burden, finds a survey by CFIB.

Costs are a concern as small business owners are also now paying an Employment Insurance (EI) increase and the Canada Pension Plan (CPP) expansion. Business contributions to EI have increased by $200 per employee between 2019 and 2023, while the maximum CPP contribution payable has increased by up to $1,005 per employee within the same timeframe.

To alleviate the financial pressure weighing on small businesses, CFIB recommends the federal government:

• Return the $2.5 billion in carbon tax rebates owed to all small businesses, not just certain sectors, and freeze the carbon tax at its current level.

• Lower the federal small business tax rate from nine percent to eight percent, at least for the next two years.

• Increase the small business deduction threshold (e.g., to $700,000) and index it to inflation going forward.

• Lower Employment Insurance (EI) premiums for smaller employers.