Tuesday, June 18, 2024

Nearly 38,000 SMEs have been excluded from business tax credits

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Maria Gill
Maria Gill
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“We only perpetuate the unfavorable situations for companies that have had the misfortune of getting into the construction and services sectors. No province imposes a lockdown like that in Canada,” said CFIB Quebec Vice President François Vincent.

Nearly 38,000 small businesses in Quebec have been excluded from the business tax credit as well as being taxed as multinational companies, the Canadian Federation of Independent Business (CFIB) denounced on Wednesday.

It claims Quebec is the only province in the country that bars companies in the construction and services sectors that don’t pay 5,000 hours a year – or fewer than 3 full-time employees – from getting tax credits to keep workers 60 and over. For those with severe employment limitations.

This inequality, in her view, is exacerbated by the fact that these very small companies do not have access to a low tax rate for SMEs, and therefore are taxed like multinationals.

“The gap between the level of taxation for a small business with 2 employees versus a company with 4 employees would be 259% in the Quebec service and construction sectors, can we read the research note revealed on Wednesday. Concretely, for a $100,000 profit, the A business with 2 employees will have a tax amount of $11,500, as opposed to $3,200 for a business with 4 employees, that’s for the same profit.

CFIB says this is “hardcore”.

“If you’re too young, that’s too bad, regrets Quebec Vice President of CFIB, François Vincent in a phone interview. It’s a conflict and an injustice that has no place and has lasted long enough.

“We are perpetuating unfavorable situations for companies that were unfortunate to enter the construction and services sectors,” he adds. No province enforces a lockdown like this in Canada.”


The CFIB argues that creating a minimum employee level was part of a government strategy to encourage these companies to hire. However, in addition to questioning the logic of this measure, she points out that these small businesses face greater difficulties in recruiting labour.

The CFIB argues that companies with five or fewer employees struggle with an above-average vacancy rate and that this is particularly true in the service and construction sectors, which are covered by Quebec’s tax rules. So these SMEs are stuck in a vice: they are understaffed more severely and they are more financially disadvantaged.

François Vincent said: “We are surprised that this issue has not yet been resolved. We hope that the Prime Minister of Quebec will give priority to this file.”

As part of budget consultations, the CFIB will request later this week that these restrictions be removed in the next budget for the Coalition of the Future government of Quebec.

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