TORONTO, Dec. 14, 2023 /CNW/ – Tomorrow’s meeting of federal, provincial and territorial finance ministers is an opportunity for Deputy Prime Minister Chrystia Freeland to announce the extension of the Canada Emergency Business Account (CEBA) forgivable deadline by a full year. In recent weeks, this move was supported by all 13 provincial and territorial ministers. In addition, the Canadian Federation of Independent Business (CFIB) is calling on ministers to support a freeze of four major tax hikes coming in early 2024.
Next Monday will mark one month until the CEBA repayment deadline on January 18. If small businesses can’t repay the loan by then or haven’t applied with their bank for a refinancing extension, they will lose the up to $20,000 forgivable portion and begin paying interest on the principal amount.
“Last week, Ottawa finally provided some crucial details to help businesses considering different repayment options,” said Dan Kelly, President at CFIB. “While this information is helpful, it gives businesses very little time to find the best option for them. We’re urging government to give businesses more time to secure the forgivable portion of the loan.”
New CFIB data found that only one-third (34%) of business owners have repaid their CEBA loans while another 23% don’t think they can repay it in time to keep the forgivable portion.
CFIB continues to push the government to further extend the forgivable deadline from January 18 to December 31, 2024.
“Small businesses feel like Ottawa is abandoning them at a critical time in their recovery,” said Jasmin Guenette, Vice-President of National Affairs. “We’re already seeing more business bankruptcies compared to last year. Close to 50% of small businesses are making below normal sales, they face more than $100,000 in pandemic debt, while consumers are spending less than they were previously due to the pressures of inflation. It seems that only the government doesn’t understand the negative consequences that not extending the repayment deadline could have on our economy and our small businesses.”
Employment Insurance (EI) and Canada Pension Plan (CPP) premiums will rise on January 1, while the carbon and alcohol excise taxes will increase on April 1.
Both CPP and EI changes will increase payroll taxes for workers by up to $348 in 2024, and by up to $366 per employee for employers. Total employer contributions for CPP and EI changes could amount up to $5,524 per employee in 2024. That doesn’t even include other payroll taxes that an employer may pay depending on where their business is located.
Then on April 1, the carbon tax will increase from $65 per tonne to $80 per tonne, while the alcohol excise tax will be automatically adjusted to inflation (approximately 3.5%) in 2024 unless Ottawa legislates a freeze or cap.
The increase in the federal carbon tax is planned despite the fact that Ottawa has not even created the program intended to return $2.5 billion in carbon tax revenue to small business owners. The federal government is sitting on billions that have been collected since 2019 despite repeated promises to get these dollars back to small firms.
“Canadians and small businesses are already struggling with high costs. The upcoming tax increases will further drive up the cost of doing business and cut workers’ take-home income. We’re calling on the federal government to make both living and doing business in Canada more affordable by pausing the upcoming tax hikes,” Kelly concluded.
Business owners can visit CFIB’s website for more information on their CEBA financing options.
Preliminary results for the Your Voice – December 2023 survey, conducted from December 7-13, 2023, number of respondents = 2,617. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of at most +/-1.9%, 19 times out of 20.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
