At this week’s Council of the Federation meeting in Prince Edward Island, the Canadian Federation of Independent Business (CFIB) wants premiers to prioritize small business tax relief and the elimination of internal trade barriers to support economic and entrepreneurial growth.
“We’re in an entrepreneurial drought, and Canada cannot afford to keep losing entrepreneurs or discouraging business growth,” said Keyli Loeppky, CFIB’s senior director of interprovincial affairs, in a media release. “Governments that want a stronger, more resilient economy must put small business priorities at the centre of their agenda.”
CFIB asked the nation’s premiers to:
- Call on the federal government to lower the small business tax rate to six percent, raise the small business deduction threshold to $700,000, and index it to inflation
- Swiftly implement unilateral recognition of regulatory requirements impacting the sale and use of goods, services, and labour across the country
- Immediately enforce overdue and yet to be implemented agreements, including the Canadian Mutual Recognition Agreement on the Sale of Goods and direct-to-consumer alcohol shipment policies
- Hold each other accountable to collectively set internal trade agreement timelines and publicly acknowledge areas with delayed progress
Ontario Chamber’s suggestions
The Ontario Chamber of Commerce (OCC) has released a report that seeks to serve as a practical guide for the nation’s premiers as they participate in the July 21-23 Council of the Federation meeting.
The report titled “Towards a Single Canadian Market: Findings from the One Canada Summit” urged governments and regulators to:
- Strengthen labour mobility through a common national credential recognition framework, reformed regulatory mandates, and digital credential infrastructure
- Support housing and construction through accelerated building code harmonization, a national framework for modular and factory-built housing, and climate resilience integrated into housing standards
- Improve transportation and infrastructure through a national transportation and trade corridor strategy and stronger interjurisdictional coordination
- Promote capital mobility through a single securities passport system in Canada, reduced regulatory duplication, and better investment and capital formation conditions
- Expand market access for food, beverages, and goods through support for producers seeking interprovincial market access, the protection of critical agri-food infrastructure, and direct-to-consumer alcohol agreements between provinces
“Canada’s economy succeeds when people, goods, services, and investment can flow smoothly to opportunities,” said Daniel Tisch, the OCC’s president and chief executive officer, in a media release. “An integrated Canadian market will help businesses scale more easily, strengthen supply chains, and unlock growth that benefits workers and communities across the country.”
Small business tax relief
CFIB acknowledged that the average small business tax rate across provinces is now 1.6 percent, with many decreasing their rates this past year.
However, CFIB stressed that the federal small business tax rate has been nine percent since 2019, while the small business deduction threshold has remained at $500,000 since 2009.
According to CFIB, small businesses could attain annual savings of approximately $33,000 with a six percent federal rate and a $700,000 threshold.
Internal trade reform
Loeppky recognized premiers’ commitments to improving internal trade. However, among small businesses CFIB tracked:
- 69 percent did not find it easier to engage in interprovincial business over the last 12 months
- 16 percent reported worse conditions over the same period
“Canada can’t afford to leave internal trade half-finished, and it must remain at the top of the premiers’ agenda,” Tisch said in the OCC’s media release.
CFIB called on governments to hasten the abolition of internal trade barriers. Loeppky identified direct-to-consumer alcohol shipping as an area for improvement.
“Despite broad support and repeated commitments, most provinces have yet to follow through even though the deadline was set for May,” Loeppky said in CFIB’s media release. “They are now 50 days late.”
More on OCC report
The OCC’s report reflected insights from business leaders, regulators, government officials, and key industry players. The OCC noted that the report seeks to help governments and regulators:
- Strengthen Canada’s economy
- Lower investment barriers
- Promote regulatory harmonization
- Align with international and national standards
- Set and publish clear targets
- Ensure political accountability for implementation
For the report, the OCC partnered with CFA Societies Canada, CSA Group, Insurance Bureau of Canada, Portfolio Management Association of Canada, and the Securities and Investment Management Association.
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