The federal government’s 2018 Fall Economic Statement contained some much-needed relief for independent businesses that we’ve been urging the government to implement for years!
Incentives to increase productivity, measures to reduce red tape and fewer barriers to internal trade are all good news for business owners like you. While we’re still concerned about the impact of CPP/QPP increases and other costs coming your way, the economic statement is a good start.
Good news on productivity upgrades and red tape
The new measures that will help make it easier for your business to become more productive include:
- Introducing incentives to help you make investments in new technologies, equipment and buildings that are in effect as of November 20, 2018. Those incentives include:
- Allowing your business to write off the full cost of machinery and equipment used for manufacturing and processing;
- Enabling you to immediately write off the full cost of clean energy equipment; and,
- Allowing businesses of all sizes and sectors to write off a larger share of the cost of new assets in the year it was incurred.
- Reducing red tape for your business through measures that include a faster way of striking out outdated or redundant government rules and a committee that will advise the government on cutting red tape.
- Committing to reducing barriers to internal trade. The government will focus on working with the provinces and territories to address roadblocks in transportation, food, construction and alcohol.
While this is definitely welcome news for many business owners, unfortunately the government did not release any plans to balance the budget in the years ahead. With the deficit now at $18 billion, it’s becoming urgent for the government to take charge before today’s deficits become tomorrow’s taxes!
Working towards Budget 2019
Our work is far from done! Throughout the process leading to the budget, we will continue to urge the government to take steps to ensure that your business can stay competitive.
We have submitted your priorities in the first round of consultations, and with our member’s responses to our pre-budget survey, we’ll be sending in a more detailed submission in the next round.We are also meeting with MPs and their staff to make sure your priorities are addressed in the budget – as well as in the next federal election, less than a year away!
Those priorities include:
- Offsetting the upcoming Canada Pension Plan hikes and the increasing costs of labour by implementing a permanent lower EI rate for small businesses and/or introduce an EI holiday for hiring youth.
- Exempting previous passive investments from the small business tax changes so you can keep your access to the small business tax rate.
- Allowing your business (and the CRA) to better understand how the new rules restricting family income-splitting apply delaying their implementation until January 1, 2019, or later.
- Recognizing the vital formal and informal roles spouses play to ensure the success of a family business by implementing a full spousal exemption from the new rules on income-splitting.
- In order to better understand the full impacts and costs of red tape on small businesses, improving the current way the government measures red tape by including guidelines, policies and legislation.
- Ensuring that your business can feel the true impacts of red tape reduction by expanding the one-for-one rule to included policies, guidelines and legislation.
- Keeping today’s debts from becoming tomorrow’s taxes by making a plan to balance the budget within the next three to five years.
- Making it easier and less expensive to transfer or sell a business to a family member. Currently, it is more expensive for you to transfer your business to a family member than to a third party.
With the next federal election fast approaching, this is a key time to get your issues in front of MPs! Reach out to your Business Counsellor to tell them about your biggest priorities for the upcoming budget and election.
Looking for more info on the 2018 budget? Read our reaction here.