VICTORIA, February 20, 2020 – The Canadian Federation of Independent Business (CFIB) provides comment on the province’s BC Budget 2020 released today, emphasizing its short falls in providing any tax relief or initiatives to help small and medium-sized business. Despite insufficient support for entrepreneurs, small business owners highly value fiscal responsibility and are pleased to see a balanced budget over the next three years, with a projected $227 million surplus for 2020-21.
Small businesses are still figuring out how to recover from additional cost burdens brought on by past budgets. The Employers Health Tax (costing employers $1.85 billion in the 2019-20 year), a quickly rising minimum wage (which will reach $14.60 on June 1st, 2020), and lack of initiatives to address skyrocketing property tax bills are just some of the costs contributing to the cumulative burden felt by small business. With the exception of a few very niche tax incentives, BC Budget 2020 offers no new initiatives that would bring financial relief for the majority of small businesses in the province.
Budget 2020: ‘A Balanced Plan to Keep Moving BC Forward’ introduces a tool for municipalities to lower the property tax burden on major industrial port properties, however this tool fails to provide relief for small businesses hardest hit in British Columbia experiencing double or triple-digit annual increases in their property tax bills.
“The province needs to take immediate steps working with business owners and stakeholders to implement a solution to skyrocketing property taxes,” says Muriel Protzer, Senior Policy Analyst, BC and the North. “A solution that provides long term meaningful relief is needed now so businesses hardest hit by high property tax bills will have more certainty they can keep their doors open,” adds Protzer.
The new budget also shows a concerning outlook for business growth given 2019 outcomes, including weakened consumer spending (increasing just 1.1 per cent), a slowing of exports (down 6.4 per cent), and plateaued retail sales (rising 0.5 per cent). Despite an overall rosy economic outlook for Budget 2020, the combination of these factors suggest businesses are underperforming relative to past years. Creating a greater competitive advantage in BC through tax relief initiatives would allow business owners more flexibility to grow and create more certainty around consumer behaviour.
“The combination of new and increasing taxes on business over the past several years with weak consumer spending means significant challenges for SMEs going forward,” says Protzer. “With projected surpluses on the horizon, we hope the province is ready to look at ways to offer tax relief for businesses. Lessening the financial burden of the Employer Health Tax, for example, is one area the province could consider to give SMEs more flexibility to reinvest in their business,” adds Protzer.
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Muriel Protzer, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.