Keeping inflation at reasonable levels is clearly an important goal, but this key rate increase came at a really bad timing. In fact, 62% of small and medium-sized businesses are still collapsing under the weight of their pandemic debt, which amounts to an average of $158 thousand. It is increasingly expensive to do business in Canada. High operating costs, high interest rates and labor shortages are putting SMEs in a difficult position,” warns Simon Goudreau, chief economist and vice president of research at CFIB.
Nearly a third of small and medium-sized businesses (32%) plan to increase prices by 6% over the next year, according to CFIB’s August Business Barometer. You should know that 79% of small and medium-sized businesses have already had to raise their prices over the past year to offset the increase in operating costs, according to a June survey by CFIB.
“Governments must quickly take measures to lower the operating costs of small and medium businesses. For example, the federal government should freeze currently planned tax increases and accelerate reductions in credit card transaction processing fees, as promised,” suggests Yasmin Janet, Vice President of National Affairs in CFIB.
To help small and medium businesses get out of this mess, the African Union International Bank recommends that governments adopt some measures, namely:
- Freezing planned federal tax increases (including carbon/alcohol taxes and CPP/QPP or EI premiums);
- reduce the regional tax burden;
- Increase the grant portion of Canadian Emergency Business Account (CEBA) loans to at least 50%;
- The deadline for the repayment of CEBA loans that can be partially converted into grants has been postponed until December 2024
- Increase the small business deduction from $500,000 to $600,000;
- Immediate implementation of the promised reduction in credit card transaction fees for small merchants.
“While SMEs have to deal with significant increases in almost every component of their budget, governments must ensure that they do not impose additional costs that will have a negative impact on their activities,” comments Yasmine Genetti.
To view the full CFIB report, he is here.
Sophie Laurent is a contributor to Vaughantoday.ca, covering a wide range of topics including local news, politics, business, technology, sports, entertainment, and lifestyle. She focuses on delivering clear, balanced reporting that helps readers stay informed about current events and issues that matter to their communities. Sophie is committed to presenting accurate information, practical insights, and relevant stories in a straightforward and reader-friendly manner, making complex topics accessible to a broad audience.