Toronto, March 19, 2026 – The Canadian Federation of Independent Business (CFIB) today released its top priority for the 2026-27 Ontario Budget next Thursday: Lower the Small Business Tax Rate from 3.2%-2% and/or raise the threshold to access this rate from $500,000-$700,000.
“Our members have been telling us they need direct measures like tax cuts to deal with today’s uncertain economic conditions created largely by U.S. tariffs,” said Angela Drennan, CFIB’s Ontario Vice-President of Legislative Affairs. “We recently delivered this message in over 50-plus meetings, so our members’ voices are heard loudly and clearly across Queen’s Park. Small businesses want a new budget line item they can call their own.”
“Our small business tax changes would be an investment, since our members have also told us they’d wisely use the savings to increase employee compensation, expand their operations, and hire new employees,” said Julie Kwiecinski, CFIB’s Ontario Director of Provincial Affairs. “We’ve done the math and know that 346,930 Ontario small businesses would benefit from lowering the Small Business Tax Rate from 3.2%-2% alone.”
CFIB’s tax-related recommendations are strongly supported by CFIB survey data. A resounding 96% of Ontario small businesses say that “reducing the overall tax burden” should be a priority for the Ontario government. Another CFIB survey revealed that “taxes” are the top concern for Ontario small businesses, outranking operational costs (e.g., rent, insurance, supplies), uncertainty over economic conditions, energy costs, and trade uncertainty.
CFIB also recommends that the Ontario government implement CFIB’s small business tax changes using the remaining $4B in its tariff-related Protecting Ontario Account. Based on CFIB’s February 2026 survey data, almost three-quarters (72%) of Ontario small businesses across all sectors are being impacted by U.S. tariffs, including 28% directly and 44% indirectly.
“Large businesses in the auto, steel and aluminum industries aren’t the only ones feeling tariff pain,” said Joseph Falzata, CFIB’s Ontario Policy Analyst. “Almost everyone’s suffering from U.S. tariffs in some way, and the latest global economic pressure – higher oil prices – is yet another cost increaser coming at a bad time for businesses.”
According to CFIB’s Monthly Business Barometer® released this morning, March 2026 marked the 31st consecutive month that lack of demand was rated by Ontario small businesses as the top barrier to their sales or growth. Persistent low demand means less sales and revenue, keeping many small businesses in an endless state of just surviving, rather than thriving.
For media inquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small- and medium-sized businesses with more than 103,000 members across every industry and region, including 40,000 in Ontario. 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.
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