Canadian Business Pushes For Tax Cuts

by Mike Godfrey, Tax-News.com, Washington

07 February 2011

The Canadian Federation of Independent Business (CFIB) has met with Finance Minister Jim Flaherty to push for job-creating measures that will encourage small business growth in the next federal budget.

Key concerns for small business owners are payroll taxes, red tape and growing government debt. CFIB members would also like to see measures that can actually help keep more money in their firms to invest in new employees, new equipment and new opportunities.

Some of CFIB's key recommendations include:

• Introducing a Hiring and Training credit so that small businesses can receive a one-year EI holiday on increased payroll to encourage new hiring and offset increasing payroll taxes.
• Indexing the Lifetime Capital Gains Exemption to inflation, as was previously promised.
• Planning for future reductions in the small business corporate tax rate to limit eroding the differential between the small business rate and the general corporate tax rate, and raise the threshold for the small business corporate tax rate to CAD600,000.
• Requiring the Canada Revenue Agency (CRA) to provide written interpretation on tax inquiries when requested by telephone or email, and if a business follows CRA advice which turns out to be incorrect, the firm should not be held responsible.
• Reducing the growing gap between public sector and private sector compensation, benefits and pensions, increasing the retirement age in the public sector and moving from defined benefit to defined contribution pension plans in the public sector.

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