The latest federal budget did not do enough for small businesses, experts say.
There is nothing within the budget that federal Finance Minister Chrystia Freeland presented on Thursday that helps to address the debt small businesses have accumulated during the course of the pandemic.
“They’re not out of the woods yet,” said Kathleen Cook, the provincial director for Manitoba and the North with the Canadian Federation of Independent Business.
The feds did announce a reduced federal tax rate of 9% on their first $500,000 of taxable income. Budget 2022 also proposes to phase out the business tax rate gradually with access to be fully phased out when taxable capital reaches $50 million, rather than $15 million. It is something Cook said the CFIB has been calling on the federal government for years.
“That will encourage more small businesses to grow from small to medium-sized,” Cook said. “So that’s a positive change.”
President and CEO of the Winnipeg Chamber of Commerce Loren Remillard said he was disappointed the budget did not address some of the concerns chamber members have about the cost of doing business. Impacts on the supply chain and rising inflation have made things difficult for business owners, he added.
The cost of doing business is the No. 1 issue facing small business owners right now, Cook said.
“The cost of everything is going up,” she said. “From fuel to insurance, input costs, and there’s nothing in this budget that’s going to help small businesses deal with that.
The $85 billion increase in spending is something that won’t benefit small businesses in the long run, Cook said.
“I would say that just the increased spending overall is going to mean higher taxes down the road,” she said. “So, for small businesses, that’s generally not good news.”
However, one thing Remillard commended the feds for was an increase in defence spending, which could positively impact Winnipeg’s aerospace industry. The federal budget plans to spend $6.1 billion on national defence over five years starting in 2022-23.
Manitoba Liberal leader Dougald Lamont said there are a lot of positives within the federal budget and that it’s not the “blowout budget a lot of people expected it to be.”
Lamont pointed to tax breaks for rural nurses and doctors, which he said should help address the shortages in Manitoba. He also applauded his federal counterparts for increased spending on dental care.
However, Lamont said the provincial government needs to ensure the money flows from Ottawa into where it needs to go.
That is something that has often not happened in Manitoba,” Lamont told reporters Thursday at the Legislature.
NDP leader Wab Kinew echoed that sentiment during a press conference on Thursday afternoon with Alberta NDP leader Rachel Notley. Kinew and Notley spoke to the lack of increase to the Canada Health Transfer, which is something Manitoba Premier Heather Stefanson wanted to see get done as well.
Kinew said the federal government needs to be a more consistent partner to address the health care problems in Manitoba.
“Because let’s, let’s face it, we’re still in a pandemic now,” he said. “And even when COVID leaves the pandemic phase, it’s still going to stay with us in some form, which means we are going to have bigger needs in our health-care system. Whether that’s in the ICUs on an ongoing basis, or whether that’s in the hospitals helping people with long COVID.”
Kinew added that a strong health care system can contribute to a growing economy, which was made clear by the COVID-19 pandemic.
“We actually had to shut down our economy at different periods during the pandemic when our health care system was overwhelmed,” he said.