Federal Budget 2023: Small businesses look for much-needed relief from cost increases and post-COVID debt
Toronto, March 14, 2023 – The federal government needs to use the upcoming budget to implement policies that will support small businesses and foster economic growth, says the Canadian Federation of Independent Business (CFIB). This includes helping businesses deal with their COVID-related debt, keeping business costs down, reducing red tape, and addressing labour shortages.
“Small businesses are facing higher costs across the board, rising interest rates and lack of staff, at a time when many still haven’t recovered from the impacts of the pandemic. This leaves many of them in a precarious financial position, without an ability to repay their staggering debt loads,” said Corinne Pohlmann, CFIB’s senior vice-president of national affairs. “The federal budget must ensure small firms have a pathway to recover and grow in the challenging months ahead.”
As of February, over half (57%) of small businesses have not repaid their pandemic-related debt, at an average of $105,000, and only 48% have seen their sales return to pre-pandemic levels.
Small businesses are also struggling with rising costs on almost every line of their budgets. Tax and regulatory costs are causing challenges for 54% of small businesses. Other cost pressures include fuel and energy (69%), wages (63%), insurance (59%) and product input (45%) costs.
“Many small firms are slowly recovering from years of subpar business conditions. Now, they’re getting hit with rapidly increasing costs. Small business confidence is still below the pre-pandemic levels, and there’s a lot of uncertainty around the economy,” said CFIB’s chief economist Simon Gaudreault.
To help small businesses recover and thrive, CFIB recommends the government:
- Extend the repayment deadline for the Canadian Emergency Business Account (CEBA) to December 2024 or even 2025, consider additional debt forgiveness and implement an appeal process for CEBA loan recipients that are now deemed ineligible
- Pause carbon pricing at the current level
- Lower the federal small business tax rate from 9% to 8%, at least for the next two years and increase the small business deduction threshold from $500,000 to $600,000, followed by indexing it to inflation
- Introduce a targeted Employment Insurance (EI) credit for small business
- Deliver on the promise to lower credit card fees for small business
- Create a pathway to permanent residency for lower-skilled temporary foreign workers
- Extend the Accelerated Capital Cost Allowance (ACCA) and make Immediate Expensing of up to $1.5 million permanent to help with capital investments
“Small businesses are doing everything they can to dig themselves out of the hole the pandemic put them in, but the current economic challenges are not making that easy. They want the government to listen to their concerns and take action now. The federal budget must speak to small business priorities and put appropriate policies in place to ensure a strong small business recovery across all sectors and regions,” added Dan Kelly, CFIB president.
Read CFIB’s full pre-budget submission for more details.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
February Business Barometer®: February findings are based on 531 responses from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflect responses received from February 2 to 13. Findings are statistically accurate to +/- 4.3 per cent, 19 times in 20. Every new month, the entire series of indicators is recalculated for the previous month to include all survey responses received in that previous month.
Final results for the Your Voice – February 2023 survey: an online survey completed by 3,023 CFIB members between February 8-28, 2023. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of ±1.8 per cent, 19 times out of 20.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 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.