OPINION | Small business wish list for Budget 2018

Contributed to the Sixth Estate.

Another year, another budget slated for February 27th – the third for Minister Morneau. Given the recent proposed tax changes, it is also arguably one that is dreaded by many small business owners that are worried about what it might contain.   Despite some who believe the small business community has moved on, that is not the case. CFIB and other groups, including the Coalition for Small Business Tax Fairness with over 70 business organizations and advocacy groups representing hundreds of thousands of business owners across Canada have continued to raise concerns despite some of the adjustments government announced last fall.

Last December the federal government announced details around the new income sharing rules for family businesses, leaving only a few weeks for business owners to scramble to make sure their financial houses are in order. Not only are the new rules around income sharing confusing and difficult to understand for the most seasoned tax expert, they are simply unfair. It is almost impossible to quantify the role of spouses in a family business. These people are often staying late or coming in on the weekend when no one else around.

Small business owners are also worried about how government will address passive investment income which will be announced as part of this upcoming budget. Many rely on passive investments to put money aside to help grow their business, for emergencies or retirement. These types of tax tools recognize the inherent risk borne by many entrepreneurs and we need a much more fulsome understanding of the economic impacts of the proposed changes before moving forward.

Given these pending tax changes, Minister Morneau needs to make sure this budget also includes incentives for small business to spur innovation and job creation. Here are just a few ideas we hope to see in this budget:

  1. * Many young people get their first job experience working in their local café or retailer. An Employment Insurance credit for hiring youth – aged 18 to 24 – could be perfect to help with hiring.


  1. * Given recent tax reform south of the border, we need to find ways to help encourage innovation and productivity in Canadian small business by introducing an expense deduction for investments in new technology or equipment, similar to a deduction that is already available to small firms in the United States


  1. * And lastly, with all the recent international trade talk – let’s not forget about free trade in Canada. We want to see the federal government work closely with their provincial counterparts and address at least three interprovincial trade issues by the end of 2018. Making progress in this area can start addressing the often stifling red tape many small business owners face.

Canadian small businesses will be closely watching Tuesday’s budget for some positive announcements. Here’s hoping they will hear them.

Corinne Pohlmann, is Senior Vice-President, National Affairs and Partnerships at the Canadian Federation of Independent Business. With over 110,000 members, we’re Canada’s largest organization devoted to creating and supporting an environment where small business can succeed.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the Sixth Estate.

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