Lower taxes dominate CFIB’s top 5 priorities for fall legislative session

Toronto, October 16, 2025 – In preparation for the Ontario legislature’s return next week, the Canadian Federation of Independent Business (CFIB) today released the top five priorities of its over 39,000 small- and medium-sized business members representing all sectors across the province. Topping the list are three tax-related recommendations, including: lowering Ontario’s Small Business Tax Rate and increasing its threshold, lowering Business Education Tax rates, and increasing the Employer Health Tax exemption threshold. 

“Ontario small businesses have been telling us that they need direct, meaningful tax relief to help them navigate U.S. tariffs and today’s unpredictable economic climate,” said Angela Drennan, CFIB’s Ontario Vice-President of Legislative Affairs. “Two tax measures alone – lowering the Small Business Tax Rate from 3.2%-2% and elevating its access threshold from $500,000-$700,000 – would save an Ontario small business up to $25,000 every year.”

CFIB’s tax-related recommendations are strongly supported by recent data. CFIB’s September monthly 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. In CFIB’s monthly survey started on October 9 and still open for responses, 95% of Ontario small businesses to date said that “reducing the overall tax burden” should be a priority for the Ontario government. 
  
“In addition to tariffs, small businesses have been challenged by ever-increasing costs of doing business, thin margins, and low demand,” said Julie Kwiecinski, CFIB’s Ontario Director of Provincial Affairs. “For the past 26 consecutive months, lack of demand has been rated by our Ontario members as the top barrier to their sales or growth. This means that people haven’t been buying enough of their goods and services to allow them to get ahead and stop treading water.”

CFIB’s top five priorities also include creating and/or reintroducing practical measures for small businesses with minimal administrative burden, and introducing a provincial construction mitigation program while removing the legislative roadblock that has prevented municipalities from providing direct financial support to small businesses affected by local projects.

“Small businesses don’t have compliance departments or the means to put proposals together,” said Joseph Falzata, CFIB’s Ontario Policy Analyst. “That’s why tax cuts & credits and returning WSIB surplus funds directly to safe, premium-paying businesses are so popular with our members.”

Here are CFIB’s top five priorities for the Fall Legislative Session, in more detail:

1.    Lower the Small Business Tax Rate (SBTR) and Increase its Threshold: Ontario should reduce its SBTR from 3.2%-2% and raise the threshold to access this rate from $500,000 to at least $700,000, while indexing it to inflation annually.
2.    Lower Business Education Tax (BET) Rates: The province should lower its BET rates to close the wide gap between its average BET rate and Residential Education Tax (RET) rate. Ontario's average BET rate is still almost 6 times its RET rate.
3.    Raise the Employer Health Tax (EHT) Exemption Threshold: Ontario should increase its EHT exemption threshold from $1M-$2.25M to match Manitoba, and index it to inflation annually (instead of every five years).
4.    Create and/or Reintroduce Measures that Work for Small Businesses: The government should consult with small businesses before they announce programs or other measures targeted at small businesses. Initiatives with minimal administrative burden (e.g., a new informal training tax credit and a renewed Apprenticeship Training Tax Credit) are better suited to small businesses than programs designed for larger businesses with exclusionary criteria. 
5.    Offer Construction Mitigation: Ontario should create a provincial fund to compensate small businesses for revenue losses due to lengthy, disruptive construction projects that are managed by the province and/or include provincial funding. The government should also amend the Municipal Act to enable municipalities to provide direct financial support or property tax breaks to small businesses affected by local projects.

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 100,000 members across every industry and region, including over 39,000 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.