March 23, 2011 - The Canadian Federation of Independent Business (CFIB) is pleased that the 2011 budget recognizes the major contributions of small business to job creation and economic growth. This is especially relevant as the Federal government declared 2011 the Year of the Entrepreneur. "This was a tough budget as the government needed to ramp down stimulus spending and focus on reducing the deficit," said Catherine Swift, CFIB president. "We give credit to the government for working to balance its books while finding important, low-cost ways to help small firms grow the economy. We are very pleased government accepted CFIB's recommendation to introduce an Employment Insurance (EI) Hiring Credit and with efforts to reduce red-tape - particularly at the Canada Revenue Agency."
EI Hiring tax credit: CFIB is extremely pleased to see its top budget priority - an EI Hiring Credit for Small Business - announced in the 2011 budget. As this budget forecasts rising EI premiums in each of the next three years, this credit will be a major help to small firms in growing their workforce. This credit will exempt some small employers from having to pay premiums on an increase in their payroll in 2011 over 2010 levels. As an example, this credit will allow a firm with less than $413,000 in payroll to create one new $40,000 per year job without paying any EI on that new position.
Red Tape: As a member of the government's Red Tape Reduction Commission, CFIB has been focused on reducing unnecessary rules and paperwork and there are several measures in this budget that respond to this challenge. CFIB is delighted the budget makes an ongoing commitment to continue BizPal - which provides firms with one-window access to permits, licences and fees at all three levels of government.
Canada Revenue Agency (CRA) - Improving Taxpayers Fairness: Requiring CRA to provide written interpretation on tax inquiries when requested through CRA's online window will bring a significant improvement in transparency and accountability. In addition, the measures to review penalty levels for information returns will be welcomed by firms struggling to meet government paperwork requirements.
Retirement Income: While CFIB welcomes the ongoing work to introduce Pooled Registered Pension Plans, we remain concerned that the budget notes that "federal, provincial and territorial governments are continuing work on options for a modest enhancement to the CPP".
"In this Year of the Entrepreneur, the government took several important steps to help small businesses spend less time focusing on red tape and spend more time creating jobs and growing their firms," said Catherine Swift. "However, given the size of the deficit, we are disappointed more action wasn't taken to reduce the cost of the civil service - particularly unfunded, overly-generous public-sector pensions."
As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 108,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.