Harper Sets Out Plan To Lower Taxes On Job-Creating Small Businesses
Building on past support, a re-elected Harper Government will deliver on its plan to further lower the small business tax rate from 11 percent to 9 percent over the next four years.
This tax cut – the largest tax rate cut for small businesses in more than 25 years – will provide $2.7 billion in tax relief to nearly 700,000 small business over this period.
When this tax cut for small businesses is fully implemented, the amount of federal corporate income tax paid by this business will be 46 per cent lower than in 2006. This represents an annual tax reduction of up to $38,600 that can be reinvested in the business to fuel its growth.
In addition, a re-elected Harper Government will cut payroll taxes on small businesses by 20 percent, beginning in 2017. This means that a small businesses with 15 employees earning, on average, $40,000, will experience a net payroll tax decrease of $3,276.
In sum: Prime Minister Harper’s forward-looking plan for Canada’s small businesses is rooted in a balanced budget, low-tax program that respects their vital contribution to the Canadian economy and will help them succeed and grow.
Canada’s small businesses are the backbone of the national economy. They represent almost 99 percent of all businesses in the country and employ nearly 70 percent of all Canadians working in the private sector.
To help small businesses grow and create jobs, the Conservative government has delivered substantial ongoing tax relief to small businesses and their owners. This includes:
- Reducing the corporate income tax rate for small businesses to 11 per cent and increasing the amount of income eligible for this lower rate to $500,000. These two changes are reducing taxes for small businesses by $2.2 billion in 2015 alone.
- Increasing the Lifetime Capital Gains Exemption and indexing it.
- Establishing the Small Business Job Credit to save 780,000 small businesses more than $550 million this year and next.
Our record of supporting Canada’s small businesses extends beyond tax relief. We have:
- Cut red tape in partnership with the Canadian Federation of Independent Business.
- Improved access to financing through the Business Development Bank of Canada, the Department of Industry’s Canada Small Business Financing Program, and our own Venture Capital Action Plan.
- Expanded trade services to small businesses so that they can grow and find customers in new markets.
- Resisted calls from the Liberals and NDP to dramatically hike payroll taxes on small businesses.
The Harper Government has taken these steps and more because we understand that small businesses are of vital importance to Canada’s economic future. Their success is Canada’s success.
“CFIB applauds the government for lowering the tax burden on Canada’s small businesses now that the budget has been balanced. Reducing the small business corporate tax rate was viewed by CFIB members as the most effective measure the federal government could take to strengthen the performance of small firms. We are especially pleased that government intends to legislate the full small business tax cut plan before the election.”
Canadian Federation of Independent Business
“The CCSA believes two measures in particular will help its retail members remain competitive and hire more young Canadians. These measures include: a reduction in EI premiums from their 2016 rate of $1.88 to a $1.49 rate in 2017, a reduction of 21%; and a reduction of the small business tax rate from 11% to 9% by 2019.”
Canadian Convenience Stores Association
“The proposed measure boosting the small business deduction will help make Canada’s independent retailers more competitive in the face of strong Global competition. This budget builds on the government’s overall record of lowering the corporate income tax rate from 22 per cent to 15 per cent.”
Retail Council of Canada
“The  budget will have a positive impact in a sector poised for new growth. We also appreciate the fact that the government took the needs of small business into account in this budget.”
Canadian Chamber of Commerce
“The announced reduction in the tax rate for small businesses, from 11% to 9%, will be well received by regional businesses. In addition, the increase in the Lifetime Capital Gains Exemption to $1 million for businesses in the agriculture and fishing sectors will help them pass the torch to the next generation.”
Quebec Federation of Municipalities
Justin Trudeau’s Liberals and Thomas Mulcair’s NDP voted against our tax cuts for Canada’s small businesses.
In fact, Justin claims that most small businesses – “a large percentage” – are just schemes for wealthy Canadians to avoid paying taxes. This lack of understanding is disrespectful of small business owners and speaks to his basic economic illiteracy and unreadiness.
And to make matters worse, Justin’s Liberals are proposing massive payroll tax hikes – including as much as $1,000 for employees earning $60,000 in new CPP payroll taxes – that will hurt small businesses’ bottom lines and stall job creation.
Mulcair and the NDP have advocated for an even more dramatic payroll tax hike on small businesses and their workers. For someone earning $60,000 per year, Mulcair’s tax-hike would cut their take-home by more than $1,500 per year.
Only Prime Minister Stephen Harper has the proven experience to keep taxes low and the economy moving forward. The Harper Government’s low-tax plan for job-creating small businesses will support economic growth and new job creation now and in the future.