Last Updated on January 24, 2019
As federal political parties start campaigning for the upcoming federal election, small business owners and advocates are waiting for more detailed platforms to see which parties will offer the most supportive policies. There’s a lot at stake for small businesses in a faltering Canadian economy.
“Small businesses have been fairly prominent on the political radar over the past couple years, but I do think all political parties have been even more attentive to small- and medium-sized firms lately,” says Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB).
Given there are 2.5-million Canadian entrepreneurs who are self-employed or operating small- or medium-sized businesses, politicians are recognizing the importance of this demographic.
One big issue CFIB will be watching closely is the expansion of the Canadian Pension Plan (CPP). Imposing mandatory new costs would hurt the economy, as small businesses would have to hike payroll taxes, affecting job creation, says Mr. Kelly.
A big issue for small business is the state of the Canadian economy.
“The economy is pretty shaky right now, and there’s a lot of worry on the part of business owners with where things are headed,” Mr. Kelly says. “So small-business owners will be even more attentive to all things economic in this election … watching the parties’ plans to try to get the economy back on a more sound footing than is the case today.”
Federal NDP leader Thomas Mulcair has pledged to increase the federal minimum wage, cut small business taxes, and introduce a tax credit for innovation and an accelerated capital cost credit, policies he says would help manufacturers to modernize their plants. He’s also promised to spend an extra $1.5-billion in gas taxes on infrastructure projects, to introduce a national childcare program, and deliver balanced budgets.
The Harper government’s pre-election budget also offered investment incentives to the hard-hit manufacturing sector. The Liberals, meanwhile, have focused on improving economic conditions for middle-class Canadians, but besides cutting the small-business tax, they had not revealed their small-business platform so far.
Some people are more skeptical of party intentions. Walid Hejazi, an associate professor at Rotman School of Management, says he doubts the parties will deliver on all their campaign promises. One of the biggest criticisms Mr. Hejazi has heard from business owners is that there’s intense focus on the problems of the energy sector, but far too little support for developing manufacturing and other industries.
Manufacturers, he continues, are especially hurt by the uncertainty of the Canadian dollar. When oil sold for $100 a barrel, it drove up the Canadian dollar and, as a result, many exporters, especially small ones, weren’t able to remain competitive. Now that the dollar has dropped, the idea is that the exports should surge, but many businesses reduced their manufacturing capacity during that time.
He adds that more needs to be done by the federal government to support innovation: “The idea is that, if you’re producing products that are of high quality or differentiated, even when the Canadian dollar goes up, people will still buy your product.”