IssuesSmall Business

Small Business

First Published: Sep 18, 2019
Last Updated: Sep 18, 2019
Monitored by: Roberto Chavez

Background

Small businesses are the cornerstone of the Canadian economy. Almost 50% of Canadians work for a small business, and 86% of Canadian exporters are small businesses. Prime Minister Justin Trudeau recognized the importance of small businesses for Canadian economy while he said on Twitter. “When Canadian small businesses succeed, our economy grows, middle class jobs are created, and all of Canada benefits.”

Current Status

In this context, small businesses' expectations of the 2019 federal budget were very high. Many were disappointed. There were no small business tax breaks included in Budget 2019. Budget 2019 proposed to introduce an EI Small Business Premium Rebate. Starting in 2020 any business that pays employer EI premiums equal to or less than $20,000 per year would be eligible for a rebate to offset the upward pressure on EI premiums resulting from the introduction of the new EI Training Support Benefit.

Liberal

No specific proposals yet.

Conservatives

No specific proposals yet.

NDP

New Democrats will keep working hard for small businesses to tackle issues that impact their bottom line, like high credit card merchant fees.

NDP will also make it easier for the family business to be passed on to future generations, with new legislation to end the unfair tax treatment of family transfers of small businesses.

Green Party

No specific proposals yet.

People's Party

No specific proposals yet.

Bloc Quebecois

No specific proposals yet.

September 24, 2019
Roberto Chavez

On Tuesday, Andrew Scheer pledged to repeal tax changes for small business investments brought forward by Finance Minister Bill Morneau in 2018. It includes a pledge to restore access to the small business tax rate for businesses with a passive annual income of more than $50,000, as well as allow such firms access to refundable taxes for corporations on the distribution of eligible dividends.

As well, Scheer wants to exempt spouses or common law partners of small business owners from Liberal changes restricting the savings from income sprinkling, a strategy used by wealthy owners of private corporations to divert their income to family members with lower personal tax rates. Small business tax changes were first proposed by Morneau in the summer of 2017 and then tweaked in 2018 following a strong outcry from certain business owners, including family doctors operating their own practice.

The Tory leader is also pledging to reduce federal regulations by 25 per cent.  While Scheer did not offer specific examples as to what red tape can be cut, he committed to eliminate outdated regulations he described on Tuesday as “low-hanging fruit.”

The Montreal Economic Institute, a think tank promoting liberal economics, estimated last year that there were 136,121 federal regulations, meaning a Scheer government would have to cut more than 34,000 measures.

Scheer is also vowing to appointing a minister to lead red tape-cutting efforts, as well as removing two regulations for every one adopted — echoing a commitment in Ontario by Premier Doug Ford.

Kevin Milligan, an economist at the University of British Columbia, said rolling back the Liberal government’s changes would benefit some of Canada’s wealthiest. In a Twitter thread, he said the passive investment proposal would affect the top 2.9 per cent of private companies, but would receive 88 per cent of such income.

“These proposals clearly benefit the highest earners who have private corporations,” Milligan said. Canada’s independent budget officer estimated repealing Liberal measures on passive income would cost more than $500 million annually, totalling $5.4 billion between 2020-21 and 2028-29.

Exempting spouses from taxes on income sprinkling would cost $334 million over nine years starting in 2020. A commission tapped to review tax competitiveness would cost $20 million.

Such efforts would ultimately widen the hole in federal revenues, although Scheer said Tuesday a fully costed platform will be released soon that shows a path towards balanced budgets in five years.

September 18, 2019
Hugues Théorêt

On September 18, Conservative Leader Andrew Scheer announced he will cancel hundreds of millions of dollars in corporate welfare handouts to wealthy executives, shareholders, and foreign companies and instead put that money in Canadians’ pockets so they can get ahead. Scheer also said a new Conservative government will conduct a review of all business subsidy programs in order to eliminate $1.5 billion in corporate handouts that don’t create jobs and support economic growth in Canada.

September 13, 2019
Roberto Chavez

If elected, the Liberals will reduce the cost of federal incorporation, remove all fees for business advisory services from agencies like the Business Development Bank of Canada, and create a voluntary payroll system to automate records for small businesses.

A Liberal government would also launch a pilot project that would provide as much as $50,000 for up to 2,000 entrepreneurs to help them start a business.

Trudeau says a Liberal government would give $250 to every new business to help them develop a website or e-commerce platform.

The Liberals estimate the measures would cost the federal treasury $129 million next year, a number that would rise to $163 million in 2023-24.

July 31, 2019
Hugues Théorêt

On July 30, Finance Minister Bill Morneau asked the head of the Office of the Superintendent of Financial Institutions to start an investigation into the Capital One Financial data breach, which affected about six million Canadians. Capital One revealed that personal information including names, addresses, phone numbers, postal codes, email addresses, birthdates and self-reported income, were compromised. Approximately one million social insurance numbers (SIN) were also compromised

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