Small business to the Trudeau government: Here’s what we can agree on
By Dan Kelly
Published in the Financial Post November 4, 2015
After a long, roller-coaster ride of an election campaign, a majority Liberal government will take the reins of power later this week. As it turned out, Election Day was the same day Small Business Week kicked off — hopefully a happy coincidence for Canada’s entrepreneurs.
A sincere tip of the hat to Prime Minister-designate Justin Trudeau and his party for their victory. At CFIB, we are excited to meet with the new government to outline our members’ top priorities and share with them the perspectives of Canada’s small business owners.
Congratulations should also go to the outgoing government, other party leaders and indeed all candidates. They deserve high praise for their respective commitments to this great country. It was great to see all federal parties make tangible and progressive proposals to address the concerns of Canada’s small business community during the campaign.
As a non-partisan organization, CFIB has worked with federal and provincial governments of every political stripe. We’ve scored victories and had big fights with almost every government in our history. We are committed to working co-operatively with the Trudeau government on priorities we share and are equally committed to pushing back if it makes changes that create roadblocks to growth and job creation for small businesses. An early review of the government’s agenda suggests we should expect some in both columns.
During the campaign, the main national parties, including the Liberals, pledged to reduce the small business corporate tax rate to nine per cent from 11 per cent by 2019. That lays the right foundation and sends a strong signal of support to small businesses. During the campaign, Trudeau made some comments about the small business tax rate, telling Peter Mansbridge, “…a large percentage of small businesses are actually just ways for wealthier Canadians to save on their taxes.”
We take no issue with his government seeking to ensure only legitimate small business owners benefit from the small business tax deduction. However, if there is any consideration of reducing access to the small business rate for professionals (e.g., doctors, dentists) or to cut out any small firm with three or fewer employees (as is happening in Quebec), CFIB will take action.
Another positive plank in the Liberal platform was a plan to waive Employment Insurance premiums for new jobs for people between the ages of 18-24 for the next three years. This is a sign the new government appreciates the relationship between excessive payroll taxes and job creation, and it is encouraging for young workers, many of whom get their first work experience in a small business.
The biggest early battle with the new government, however, will likely be with the Canada Pension Plan.
The Liberals promised to maintain the Canada Job Grant while bringing back federal-provincial Labour Market Development Agreements, saying it will provide the provinces and territories with $500 million a year in skills training. As the shortage of labour continues to affect small businesses, we look forward to working with the government on this commitment.
Liberal MP Emmanuel Dubourg’s Bill C-691 proposed changing the Income Tax Act to ease the tax burden on business owners seeking to pass their business on to their children or grandchildren (currently, it is less costly to transfer a business to a third-party than to family members). I hope this proposed bill will be an early measure on the new government’s agenda.
Former Liberal MP Ted Hsu also sponsored a bill (C-626) that would have revived the long-form census, which is something CFIB welcomes. Entrepreneurs depend on timely, robust and up-to-date information, and the elimination of the census set back this objective.
CFIB also expects some common ground on its proposal to replace the Temporary Foreign Worker Program with greater access to the permanent immigration system for employers seeking employees from overseas with technical or more junior skill sets.
The biggest early battle with the new government, however, will likely be with the Canada Pension Plan. Based on Trudeau’s comments about supporting the general direction of the Ontario Retirement Pension Plan, I’m expecting the federal government to look for a 40 per cent increase in CPP benefits. Our members are deeply concerned about the huge new costs this would add to their payrolls, and the effect it would have on hiring plans.
Until the economy is back on solid ground, expansion of public pension plans of any kind should be off the table. This is particularly true given the Liberal’s plan to scale back the EI premium reduction scheduled for 2017. CFIB will raise these concerns and provide realistic alternatives to the government. Much of our CPP lobbying efforts will also focus on the provinces, as any change requires two-thirds of the provinces representing two-thirds of Canada’s population.
On deficits, the government has signalled its plans to run them for the next three years. After all the hard work to finally get us out of deficit spending, we hope this will be short term.
These are exciting times and I look forward to building relationships with the new government, cabinet and their political staff, and senior officials. We are prepared to stand at any podium with the Prime Minister or any Minister to commend good public policy for small business. We are also prepared to battle ideas that would harm independent businesses and their ability to create jobs.
This story was originally published in the Financial Post.