News
CFIB reaction to federal budget 2009

Jan. 28 – 2009 – The Canadian Federation of Independent Business (CFIB)
believes that federal budget announced yesterday will provide a certain
stimulus to the economy but remains
very concerned with the large deficits, and questions whether this
level of spending is really necessary in the current economic context.

The Canadian Federation of Independent Business (CFIB) believes that
federal budget announced yesterday will provide a certain stimulus to
the economy but remains
very concerned with the large deficits, and questions whether this
level of spending is really necessary in the current economic context.

“The number one priority for small business in this budget was to
see signs of stability that would build confidence,” said CFIB
president Catherine Swift. “There are measures that will benefit
Canada’s small business owners but we remain very concerned with giant
deficits.”

CFIB was pleased to see the government acknowledge its sector by
raising the small business corporate income tax threshold to $500,000
from $400,000. In addition, Swift applauded the targeted reductions in
personal income tax, as that has been CFIB’s members’ top tax cut
priority. The fact that these reductions are permanent is also very
positive. Another top priority of CFIB members was to stabilize
Employment Insurance (EI) rates. Freezing EI rates through 2010 was
therefore positively received by CFIB. It was also encouraging that EI
benefit increases are to be temporary. Capital cost allowance (CCA)
measures on technology assets and extension of CCAs for manufacturers
is also good news for many businesses.

“The high levels of spending in this budget are worrisome for
taxpayers and small business owners,” said Swift, “as it may be the
beginning of a trend which could be repeated at other levels of
government, reversing in two years what it took a decade to achieve.”

As well, CFIB is concerned that many of the so-called temporary
spending measures, such as enhancing EI benefits, will be difficult to
reverse and could lead to structural deficits in the future. Although
CFIB welcomes the introduction of some scrutiny on credit card
companies, more needs to be done to promote transparency for both
consumers and small business owners. Questions also remain on whether
measures in the budget aimed at alleviating the current credit crunch
will be effective. In the area of training, small business would have
appreciated a refundable tax credit on workplace training instead of
directing additional monies to existing programs which have
questionable effectiveness.

Given small businesses’ role as a stabilizing force in Canada’s
economy, CFIB is calling on all political parties to provide messages
of political and fiscal stability to Canada’s entrepreneurs.