CFIB, major political parties, disagree with Council of Chief Executives
TORONTO/CALGARY – The Canadian Federation of Independent Business (CFIB) strongly disagrees with the Canadian Council of Chief Executive’s latest report on Canada’s corporate tax system, authored by Jack Mintz, which proposes abolishing the lower small business corporate tax rate.
“It is disappointing to see big business interests trying to use the election spotlight to try to stick it to hard-working entrepreneurs,” said CFIB president Dan Kelly. “If the Council of Chief Executives wants to help small businesses grow by raising their taxes, that’s help small businesses just don’t need.”
There is ample evidence that the small business rate is a fundamental component of Canada’s economic growth, stability and well being. The notion that the lower rate acts as a disincentive to grow is strictly a red herring.
“Entrepreneurs getting into the market need the opportunity and the means to develop into a larger business. The lower small business tax rate is designed to help offset the inherent, natural disincentives to grow,” said CFIB chief economist Ted Mallett.
“If there were a disincentive to growth created by the different rates,” added Mallett. “It would only apply to those close to the $500,000 revenue threshold. The vast majority of small businesses are nowhere near that amount. In fact, 85 per cent make less than half that.”
Furthermore, from a fairness perspective, large businesses have seen their taxes cut nearly in half (28 to 15 per cent) since 2000, while the small business rate has barely moved (12 to 11 per cent). “While CFIB supported reductions in the general corporate tax rate, reductions to the small business rate are long overdue,” Kelly added.
“Fortunately, Canada’s national political parties appear to disagree with Mr. Mintz and the CCCE, and recognize the positive role of small business in driving the economy forward,” added Kelly. “We are pleased that all four national political parties have committed to reducing the small business rate to nine per cent by 2019.”
CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region.