IT’S TIME TO CUT THE SMALL BUSINESS TAX RATE!

The federal small business tax rate has been stuck at 9% for 7 years, while provincial rates have been cut to an average of just 1.6%.

Graphic showing federal SBTR stuck at 9 percent since 2019 alongside a map of Canada with provincial small business tax rates ranging from 0 percent to 2.5 percent and an average of 1.6 percent

OTTAWA HAS BEEN MISSING IN ACTION FOR YEARS.

The federal government keeps growing, your tax relief hasn’t. If the SBTR threshold had been indexed to inflation in 2009 it would be over $700,000 today!

Timeline graphic showing small business deduction threshold at $500,000 in 2009 and still $500,000 in 2026, with a grey arrow labeled where we are. A red arrow labeled where we should be points to $737,483, illustrating the impact of inflation not being applied.

IT’S TIME FOR A CHANGE.

*Newfoundland and Labrador reduced the SBTR to 2% in 2026 with another reduction to 1.5% scheduled for 2027, and another, lowering the rate to 1%, in 2028.

Prime Minister Mark Carney

CC: My Member of Parliament

Running a small business has never been harder. High costs, economic uncertainty and years of neglect from Ottawa are making it even more challenging to hire, invest and grow.

The federal small business tax rate (SBTR) has been stuck at 9% since 2019, even as provinces have cut their rates to an average of just 1.6%. The $500,000 income threshold – the ceiling on how much business income qualifies for the SBTR – hasn’t moved in nearly two decades, quietly losing its value to inflation every day.

Every dollar that I keep is a dollar I reinvest; in my staff, my operations and my community.

I am calling on you to:

  • Reduce the federal small business tax rate from 9% to 6%.
  • Increase the small business deduction threshold from $500,000 to $700,000 and index it to inflation going forward.
CFIB logo

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.