Small business leaders disappointed there was no tax cut in budget
Small business leaders say the Liberals broke a promise in the budget to cut the tax rate for companies with less than $500,000 in gross profits.
The Canadian Federation of Independent Business said during the election campaign, the Liberals promised to maintain a Conservative Party commitment to gradually reduce the small business tax rate from the current 10.5 per cent to 9 per cent.
There is nothing in the budget for this year, however, or in future years, for small businesses.
“So it was a brutal turnaround yesterday, it was a total surprise for us,” said Martine Hebert of the Canadian Federation of Independent Business.
The matter is of particular importance to businesses in Quebec; as many as 75 per cent of Quebec enterprises have fewer than 10 employees.
“It might be some new equipment that you want to purchase to improve productivity inside your business; it might be additional hours that you want to give to your actual employees,” said Hebert.
Lowering the tax rate would have cost the government $300 million this year and $900 million in 2019.
Business leaders say it would have been money well spent.
Tech startup HeyBubble.com has only a handful of employees now, but is hoping to grow to 50 workers in a year. Every penny helps, said Interfacing COO Scott Armstrong.
“Why give it away to the government when, at the end of the day, employees want higher salaries, higher wages? I prefer to give it to them showing for their good efforts instead of passing it back to the government,” he said.
Business leaders say the budget isn't all bad, though, pointing to infrastructure spending that will help all areas of the economy in the short-term.
But they're still hoping Ottawa will come around next year.
Milky Faruq of small graphic design firm Maestro Print on Park Ave. has been feeling the pinch.
Faruq used to employ five people, but is now down to one.
“Last year it was great and this year, nothing is happening, absolutely nothing is happening,” he said, adding he was hoping there would be something in the budget for small business. “These little savings obviously make us survive, otherwise we're almost on the brink of bankruptcy, a lot of small companies.”