Charlottetown, March 23, 2026 – As the Prince Edward Island Legislative Assembly prepares to return on March 24, the Canadian Federation of Independent Business (CFIB) is urging the provincial government to make small business stability and competitiveness a central focus of Budget 2026.
CFIB’s budget submission, delivered earlier this year on behalf of more than 900 PEI members, outlines targeted tax, regulatory, and cost-containment measures needed to support small firms facing persistently high costs and weak consumer demand.
“Small business confidence on PEI remains fragile,” said Frédéric Gionet, CFIB Director of Legislative Affairs for PEI and Atlantic Canada. “While we’ve seen a slight uptick in optimism, it’s not a recovery. Businesses are still operating with very little room for error, and fewer Islanders are stepping forward to start or take over businesses. That’s a warning sign”
CFIB’s latest Business Barometer™ shows recent unevenness in long-term business confidence, reflecting ongoing global trade and energy uncertainty. At the same time, 63% of PEI small business owners cite the total tax burden as their biggest cost pressure.
“When exits begin to outpace new entrants, you don’t just lose businesses, you lose community anchors, jobs, and local investment,” said Gionet. “Policy must not only protect existing firms, it must encourage the next generation of entrepreneurs.”
Recognizing progress, but more to do
CFIB acknowledged several positive steps taken by the provincial government in recent budgets, including maintaining the small business tax rate at 1%, increasing the small business tax threshold to $600,000, reducing the general corporate tax rate, and adjusting personal income tax credits and brackets.
“These measures have helped provide stability,” said Gionet. “Now, government needs to build on that momentum. Recent announcements on refocusing efforts toward red tape reduction and fiscal sustainability are also positive signals, and we will be looking for concrete actions stemming from them.”
CFIB’s key recommendations for Budget 2026 include:
- Maintain the small business tax rate at 1% to help firms manage ongoing cost pressures and reinvest in growth.
- Raise the small business tax threshold to $700,000 and index it to inflation, reflecting economic realities since the threshold was first set in 2009.
- Continue lowering the general corporate tax rate through a clear, long-term plan to improve competitiveness. PEI still has the highest general corporate rate in Canada.
- Adopt a formal red tape reduction framework, following the completion of PEI’s regulatory count under Project ART, to ensure new rules are offset and regulatory burden is reduced over time.
- Support workers without increasing employer payroll costs by continuing to improve personal income tax credits and brackets, and by modernizing the approach to minimum wage increases to reflect prevalent wage growth.
- Protect small businesses during major public construction projects by updating the Municipal Government Act to require stronger mitigation plans.
- Improve electricity reliability and rate predictability, including the creation of a dedicated small business intervener and transparent, long-term rate forecasting.
- Commit to fiscal sustainability through a clear debt stabilization and reduction plan to avoid future tax increases.
For media enquiries or interviews, please contact:
Frédéric Gionet, Director, PEI/Atlantic
Canadian Federation of Independent Business
C: 506-866-5548
frederic.gionet@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. In Atlantic Canada alone, CFIB represents more than 10,000 members, over 900 of them in PEI, and collectively employ more than 124,000 people in the region (10,200 in PEI). CFIB advocates for policy change at all levels of government, provides expert advice and tools, and negotiates exclusive savings to help business owners succeed. Learn more at cfib.ca.
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