2018 Federal Budget is slightly less bad for small business: CFIB

THE Canadian Federation of Independent Business (CFIB) said on Tuesday that the 2018 federal budget may be somewhat less harmful than originally expected, but will not improve the overall health or competitiveness of the nation’s entrepreneurs.
On passive investments, CFIB President Dan Kelly said: “While we compliment the government for rethinking its plans for taxing passive investments, it remains to be seen how significant this improvement will be. The new rules appear to be simpler and may improve things for some business owners from the earlier proposals, but others will lose the benefit of the lower small business rate due to past investments.”

The new plan ends the benefit of “grandfathering” past investments from the earlier proposal.
On competitiveness, Kelly said: “The tax changes for small business remain a billion-dollar takeaway from entrepreneurs at a time when entrepreneurs in the US are seeing their tax bills drop considerably. With uncertainty over NAFTA, Canada needs to focus on improving our tax competitiveness – instead we’re making it worse.”
On new costs and ongoing deficits, Kelly noted: “It is important to keep in mind that Canada’s SMEs [small and medium-sized enterprises] are facing massive new cost pressures in the coming years, including five years of CPP / QPP hikes, five years of carbon tax / pricing increases, and higher minimum wages in several provinces. On top of that, entrepreneurs know that today’s deficits are tomorrow’s taxes. The lack of a plan to get Canada out of deficit spending is deeply troubling.”

Regarding women entrepreneurs, he said: “CFIB is pleased to see a focus on ways to support female entrepreneurs and we look forward to working with Small Business Minister Bardish Chagger on these initiatives going forward.”
Kelly also said: “We welcome new measures to address the burden of red tape and regulation in Canada, particularly the focus on improving services at the Canada Revenue Agency. Fixes to the CRA call centre can’t come soon enough.”
The CFIB said in the weeks ahead it will lobby MPs and senators for further changes to small business tax rules, including deferring implementation of income splitting rules and a full exemption for spouses.


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