One in five small business owners describe their business as “weak” or “critical”: CFIB

The Canadian Federation of Independent Business says  22% of small businesses are in weak or critical condition.

Its research indicates just 18% would advise someone to start a business right now, while half (50%) would not. 

The CFIB released its research on Monday with Canadian Parliament back in session and the national organization said the federal government must act quickly to address Canada’s entrepreneurial drought.

Among those that say now is not a good time to start a business, 88% cite the high cost of doing business, 86% cite economic uncertainty, 65% say the tax burden is too high, and 53% point to the heavy government regulatory burden, said the CFIB.

“Small business owners have spent years navigating rising costs, and now the tariff war with the U.S. is piling fresh uncertainty and additional costs on top of already weak consumer demand and low small business confidence. It’s no surprise small business owners are pressing pause on hiring, investment and expansion as they wait and see what comes next,” said Corinne Pohlmann, CFIB executive vice-president. 

“Canada is a country of small businesses and government priorities need to reflect that. The government took positive steps towards strengthening Canada’s economy by making immediate expensing permanent and expanding the deduction to more assets. We strongly encourage them to build on that momentum and boost Main Street by lowering the small business tax rate from 9% to 6% in the upcoming session.” 

“Small businesses are being squeezed from multiple directions. The best way for the government to help is to focus on what it can control,” said Jasmin Guénette, Vice-President, National Affairs. “That means delivering on tax reduction, cutting red tape, and ensuring Canada has the best environment possible to start, run and grow a business.”

CFIB is calling on the federal government to introduce concrete measures that would lower costs and improve small business competitiveness, including:

• Reducing the federal small business tax rate from 9% to 6% and increasing the small business deduction threshold to $700,000;
• Introducing a lower capital gains inclusion rate for small firms of 33% on the next $2-million of gains beyond the LGCE.
• Exempting taxes from capital gains incurred following the sale of a business (shares and assets) when the proceeds are reinvested in a Canadian CCPC within the next three years (rollover policy). 
• Increasing the GST/HST threshold from $30,000 to at least $60,000 and indexing it to inflation going forward;
• Bringing in a two-for-one rule for federal regulations to jumpstart regulatory modernization; and,
• Returning counter-tariff revenues to businesses directly affected by the U.S.-Canada trade war. 

The CFIB is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region. 

More from Retail Insider:

• Trade war puts over 50,000 Canadian small businesses at risk: CFIB
• CFIB projects private investment to weaken, even as GDP expected to grow in Q2-Q3