Federal Fall Economic Statement a missed opportunity to help small businesses deal with immediate inflationary pressures

TORONTO, Nov. 3, 2022 /CNW/ - The Canadian Federation of Independent Business (CFIB) is disappointed the federal government's 2022 Fall Economic Statement did not include any immediate measures to support small businesses on their long road to economic recovery. But the statement did provide reasons for optimism, including a plan to return to balanced budgets and a stronger commitment to reduce credit card processing fees for small business.

"Small firms need help right now in dealing with the crippling labour shortage and rapidly rising costs," said CFIB president Dan Kelly. "Unfortunately, Ottawa is making their problem even bigger with significant hikes in Employment Insurance and Canada Pension Plan premiums on January 1, and carbon and excise tax hikes in the spring of 2023. There are zero measures in this document that will lower the tax pressures facing Canada's small firms."

"It is good news that the federal government is finally getting serious about delivering on its many earlier promises to lower credit card merchant fees," Kelly said. Over three-quarters (78%) of business owners report credit card processing fees are unaffordable for their business, a situation that has been made worse by consumers shifting to digital payment methods and away from cash during the pandemic.

"While I'm concerned credit card fee relief may be too slow to help deal with the immediate inflationary cost pressures facing small business, the direction is positive and should encourage negotiations with card networks and banks towards an early deal. CFIB is especially pleased to see government plans to ensure businesses have a seat at the table in negotiating lower transaction fees specifically focused on small businesses," Kelly added.

CFIB is also pleased the federal government introduced a pathway to a balanced budget. "Small business owners know that today's deficits are tomorrow's taxes, so getting us back to balance in the medium-term is important," Kelly said.

"Sadly, there was no progress in addressing the crippling legacy of the pandemic debt carried by small business owners," Kelly said.  The average small business has taken on $144,000 in COVID-related debt, with most carrying a government-backed Canada Emergency Business Account (CEBA) loan. CFIB will continue its call to increase the forgivable portion of all CEBA loans to at least 50%, provide an additional year to repay the loan in full and allow the 50,000 businesses recently deemed ineligible to appeal the decision.

"With less than half of small businesses back to normal sales and nearly all of them facing significant cost, tax, inflation, interest rate and labour challenges, governments should be focused on making things easier, not harder for Canada's entrepreneurs. And while credit card fee relief and balanced budgets are positive future steps, the Fall Economic Statement does not deliver the immediate relief small businesses need," Kelly concluded. 

The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.

SOURCE Canadian Federation of Independent Business