One in five small business owners describe their business as “weak” or “critical” as parliament returns

Small business tax relief needs to be at the top of the agenda to restore small business confidence

Ottawa, September 21, 2026 – Over one in five small businesses (22%) are in weak or critical condition, according to new research from the Canadian Federation of Independent Business (CFIB). Just 18% would advise someone to start a business right now, while half (50%) would not. With Parliament back in session today, the federal government must act quickly to address Canada’s entrepreneurial drought.

Among those that say now is not a good time to start a business, 88% cite the high cost of doing business, 86% cite economic uncertainty, 65% say the tax burden is too high, and 53% point to the heavy government regulatory burden.

“Small business owners have spent years navigating rising costs, and now the tariff war with the U.S. is piling fresh uncertainty and additional costs on top of already weak consumer demand and low small business confidence. It’s no surprise small business owners are pressing pause on hiring, investment and expansion as they wait and see what comes next,” said Corinne Pohlmann, CFIB executive vice-president. “Canada is a country of small businesses and government priorities need to reflect that. The government took positive steps towards strengthening Canada’s economy by making immediate expensing permanent and expanding the deduction to more assets. We strongly encourage them to build on that momentum and boost Main Street by lowering the small business tax rate from 9% to 6% in the upcoming session.”

CFIB is calling on the federal government to introduce concrete measures that would lower costs and improve small business competitiveness, including:

• Reducing the federal small business tax rate from 9% to 6% and increasing the small business deduction threshold to $700,000;
• Introducing a lower capital gains inclusion rate for small firms of 33% on the next $2-million of gains beyond the LGCE.
• Exempting taxes from capital gains incurred following the sale of a business (shares and assets) when the proceeds are reinvested in a Canadian CCPC within the next three years (rollover policy). 
• Increasing the GST/HST threshold from $30,000 to at least $60,000 and indexing it to inflation going forward;
• Bringing in a two-for-one rule for federal regulations to jumpstart regulatory modernization; and,
• Returning counter-tariff revenues to businesses directly affected by the U.S.-Canada trade war.

“Small businesses are being squeezed from multiple directions. The best way for the government to help is to focus on what it can control,” said Jasmin Guénette. “That means delivering on tax reduction, cutting red tape, and ensuring Canada has the best environment possible to start, run and grow a business.”

For media enquiries 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 103,000 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.