MPs create entrepreneur caucus
BY PROFITguide Staff | February 12, 2013
The newly formed Entrepreneur Caucus—made up of MPs from all three major parties—met for the first time this week in Ottawa. During the meeting, the Canadian Federation of Independent Business (CFIB) presented the results of a recent pre-budget survey and a list of recommendations for the 2013 budget.
"I am thrilled that MPs are working to put aside political differences to focus on ways to support the country's 2 million entrepreneurs," said CFIB president and CEO Dan Kelly, adding CFIB's representatives met with MPs to share examples of national issues affecting small businesses across the country.
During the meeting, CFIB presented recommendations on how the government could assist entrepreneurs, based on survey data from small business owners. Freezing CPP/QPP premiums was one of the top six recommendations. The CFIB says it recognizes the growing political pressure to increase CPP/QPP in order to improve retirement for Canadians. However, it points to research suggesting a mandatory CPP/QPP increase would equate to a hike in payroll taxes that would hinder economic growth.
The federal government plans to continue to increase EI employer rates by 7 cents per $100 of payroll per year, notes the CFIB. Since 72% of CFIB members surveyed listed payroll taxes as affecting the growth of their business, CFIB recommended reintroducing the EI hiring credit for small businesses and expanding it to include businesses with up to $15,000 in EI premiums, in order to mitigate the increase.
The CFIB points out that the general corporate tax rate was reduced from 28% to 15% between 2000 and 2012, while the small business corporate tax rate dropped from only 12% to 11% per cent during that same period. Given the importance of SMEs to economic stability and growth, CFIB recommended lowering the small business corporate tax rates to keep them as competitive as possible.
The CFIB also recommended indexing the lifetime capital gains exemption to inflation. The federation contends that, while the proceeds from the sale of a business are a significant source of retirement funding, they're also likely to be an important tool for funding the next wave of entrepreneurs as boomers transition their businesses to the next generation.
Of the CFIB members surveyed, 46% believe a balanced budget by 2015/2016 is reasonable, and 34% say it should be done sooner. With that in mind, CFIB recommended the federal government stay focused on eliminating the deficit by 2015/2016.
Rounding out the top six recommendations, the CFIB noted the progress the federal government has made to address the unsustainability of public-sector pensions, but encouraged further reforms to continue cutting costs.