The Canadian Federation of Independent Business is calling on the federal government to reinstate their promised small business tax cut after a report from the Parliamentary Budget office found freezing the rate will cost the economy $300 million per year, and will cost small business a whole lot more.
“The reason the small business tax rate exists is to allow small firms to reinvest their earnings back into their businesses,” said Dan Kelly, CFIB president. “Freezing the rate handcuffs middle class entrepreneurs’ ability to grow the Canadian economy. While the PBO report is a good first step in demonstrating the tax freeze fallout, we believe the long-term impact on employment will be even more significant because small firms are so much more labour intensive than larger ones.”
The PBO report also found that the freeze will cumulatively cost small businesses more than $2 billion over the next five years and the effects will carry on beyond the report dates.
“The report gets at what small business owners have been telling the federal government since they broke their promise to cut the tax: freezing the small business tax rate will make it more difficult for small business to invest, limit job growth and hurt the Canadian economy,” added Kelly. “The government is taking money from the businesses that need it most.”
Kelly will appear before the finance committee on Thursday to raise this issue.