Small Business Wants Throne Speech to Focus on Economic Recovery, Improving Tax Environment

Green initiatives and expanded social programs rank low on small businesss wish list

News Analysis

As anticipation builds ahead of the throne speech on Sept. 23, a big engine of the Canadian economy—small business—wants to see the government focused on broad-based economic recovery, not new spending unrelated to thwarting COVID-19.

“Its very important that the government does not engage in non-COVID-related spending,” Jasmin Guénette, vice-president for national affairs at the Canadian Federation of Independent Business (CFIB), told The Epoch Times. The CFIB is the nations largest association for small and medium-sized businesses.

Rumours and leaks of a potential major ramp-up in government spending on green initiatives and a larger social safety net—potentially including a guaranteed basic income—are low on the wish list of small and medium-sized enterprises.

This is seen in the findings of a CFIB survey launched on Aug. 27, with preliminary results as of Sept. 2 showing that only 21 percent of member respondents want a recovery plan specifically focused on a greener economy and just 16 percent want a more generous social safety net.

The top two priorities are a more competitive tax environment for small business (73 percent)—which has not been rumoured to be addressed in the throne speech—and a broad-based recovery plan promoting growth across the economy (69 percent).

But the next most important (65 percent) is that the government keep its spending under control. The CFIB says that businesses dont want to be faced with a higher tax bill down the road, which could arise from further damage to the countrys deficit.

What business owners are telling the CFIB, Guénette says, is that the focus should be on the recovery and not new initiatives without having time for proper formal consultations.

“In a time like this, it is not the time for permanent changes to our social and safety net programs based on what happened during the pandemic,” he said.

A more generous safety net would be costly and make up a sizable portion of increased government spending. Nevertheless, some kind of guaranteed basic income scheme is reportedly emerging as a top policy priority for the Liberal minority government.

“Business owners are saying, wait after the pandemic to first have a conversation on these,” Guénette said. “The pandemic is not the time to make permanent changes.”

Small business owners want government spending during pandemic times to be about ensuring that relief programs are available until all businesses can fully reopen.

During the COVID-19 pandemic, the CFIB has been continually surveying its members to understand how businesses are being impacted and what their needs are.

As of Sept. 2—the 20th survey conducted—64 percent of Canadian small businesses are fully open, 41 percent are fully staffed, but just 28 percent are seeing normal sales.

Workers in many service industries—including restaurants, retail stores, hair salons, and travel-related businesses—who arent in a position to work remotely were hit the hardest. The oil-producing provinces also got a double-whammy from low oil prices in the early days of the pandemic.

The overwhelming majority of businesses in Canada are small–defined as employing less than 100 employees—and are critical to the nations employment and economic well-being. In December 2019, the Canadian economy totalled nearly 1.23 million employer businesses, with over 1.2 million (97.9 percent) of them being small businesses.

And in 2019, small businesses employed nearly 8.46 million in Canada, or 68.8 percent of the total private labour force.

Tax Reform

While small businesses plead for a more competitive tax environment, the Canadian Chamber of Commerce is conducting an independent tax review to serve as a launch pad for tax reform. It will be ready in early October after incorporating public consultations from across the country and the input of tax experts.

Patrick Gill, the chambers senior director for tax and financial policy, says discussions among tax experts and businesses centre on lowering costs and reducing time spent on compliance and filing. Cutting down on paperwork for deductions claimed by millions of Canadians, such as work-space-in-the-home expenses, is one of the objectives.

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