Freezing small business tax rate will chill economy: CFIB
PBO report finds cancelling a promised cut will cost the economy $300 million per year.
TORONTO — The Canadian Federation of Independent Business (CFIB) is calling on the federal government to reinstate the promised small business tax cut after a Parliamentary Budget Office (PBO) report found that freezing the rate will cost the economy $300 million per year.
But the report found the freeze will cost small business more than $2 billion over the next five years and the effects will carry on beyond the report dates.
“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. …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.”
CFIB, which represents Canada’s SMEs, has 109,000 members across every sector and region.