DAN KELLY
The lack of consumer demand is currently the top limitation on sales growth for small firms, cited by 53% of CFIB members. While a temporary sales tax cut will help boost demand in some sectors, like restaurants, in the slow post-holiday period, Canadians and Canadian businesses really need permanent tax relief.
The temporary sales tax holiday will be reasonably straight forward and welcome in some sectors like restaurants and food service businesses but may add confusion and complexity for general retailers with both taxable and new exempt items. It will require retailers to reprogram point of sale systems twice in a two-month window. In addition, some small manufacturers and retailers will undoubtedly question why they are excluded from the exemption. It is hard to explain to a small producer of spirits why their products are taxed while other alcoholic beverages are not.
It is good news that government and political parties are shifting their focus on reducing taxes rather than just increasing them. But Canadians need permanent, not temporary tax relief. Reducing the small business corporate tax rate or payroll taxes like Employment Insurance and CPP premiums are among the top priorities for small business owners.
CFIB also notes that six weeks after the sales tax holiday ends in mid-February, government plans to hike the carbon tax by 19% on April 1 while cutting the carbon rebate to small firms by nearly half. Freezing, then scrapping the carbon tax, is an even bigger priority – supported by 83% of small business owners.
Dan Kelly is President of the CFIB
