Business:Entrepreneurship
In this interview, Corinne Pohlmann, Executive Vice-President of Advocacy of the Canadian Federation of Independent Business, discusses the big challenges small businesses continue to face in Canada.
Pohlmann talks about the looming repayment deadline for the Canada Emergency Business Account as well as the increases in employers’ payrolls with hikes for Canada Pension Plan and Employment Insurance.
NEWS RELEASE
No cost relief in sight for Canadians and small businesses as government hikes CPP and EI yet again
Toronto, January 4, 2024 – As of Jan. 1, Canadians will be seeing a drop in their take-home income, while employers will face another increase to their payroll budgets due to Employment Insurance (EI) hikes and adding a second earnings limit to Canada Pension Plan (CPP) thereby hiking CPP, says the Canadian Federation of Independent Business (CFIB).
These latest hikes increased payroll taxes for employers by up to $366 per employee, and up to $348 for workers. This year, total employer contributions for CPP and EI alone could amount to $5,524 per employee.
“That’s a significant increase in the cost of labour for employers and puts them in an even tougher position, especially when many employees will be looking for a salary increase at the beginning of the year. Business owners may be forced to rethink their wage and hiring plans for 2024. And that is over and above other cost pressures small businesses are dealing with right now, such as the looming Canada Emergency Business Account repayment deadline,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB.
Heading into 2024, most small businesses (77%) want governments to focus on addressing rising prices and the cost of doing business, while another 74% want governments to reduce the overall tax burden, according to a recent CFIB survey. If governments reduced the overall tax burden, over half (57%) of small businesses said they would increase employee compensation such as wages and benefits.
CFIB is calling on Ottawa to work with the provinces to offset the CPP hikes, implement a 50:50 split in EI premiums between employers and employees, or introduce a refundable credit, similar to the 2015-16 Small Business Job Credit, to offset the rate increases for small businesses.
With the carbon tax set to increase to $80 per tonne on April 1, the federal government should overhaul the entire carbon tax system by halting future carbon tax increases, immediately returning all promised funds to small businesses that paid into the tax and expanding the carbon tax exemption to all forms of heating fuels, including natural gas and other sources used by small business.
“Ottawa is sitting on $2.5 billion in carbon tax revenue that it promised to return to small businesses, at the same time it’s providing large subsidies to multinational corporations, while small businesses and Canadians are struggling with the increased costs of living. Is this where government priorities lie?” Pohlmann said. “Ottawa must wake up and realize the impacts its recent decisions on CEBA and rate hikes will have on small businesses’ ability to continue to operate, much less compete.”
Methodology:
Final results for the Your Voice – December 2023 survey, conducted from December 7-19, 2023, number of respondents = 2,966. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of at most +/-1.8%, 19 times out of 20.
Final results for the Your Voice – November 2023 survey. The online survey was conducted November 2-20, 2023, number of respondents = 3,265. For comparison purposes, a probability samples with the same number of respondents would have a margin of error of +/-1.7%, 19 times out of 20.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 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.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
About Us
Canada’s Podcast is the number one podcast in Canada for entrepreneurs and business owners. Established in 2016, the podcast network has interviewed over 600 Canadian entrepreneurs from coast-to-coast.
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