Small business owners were looking to the 2025 budget to provide critical cost relief and to improve Canada’s tax competitiveness to jump start the economy. Instead, most of the budget’s economic measures were reannouncements from 2024, said the Canadian Federation of Independent Business (CFIB) on Tuesday following the release of the federal budget.
“Today was a missed opportunity to provide meaningful tax relief to Canada’s employers. The government could have taken the reins by reducing the small business corporate tax rate, freeing up millions of dollars for investment in employees, technology and operations,” said Dan Kelly, CFIB’s President.
“Government finances are a mess, but the budget just slows the growth in program spending with overall deficits above $50 billion per year as far as the eye can see. Small firms have learned the hard way that today’s deficits are tomorrow’s taxes.
“In addition to the lack of tax relief and giant fiscal deficits, many of the measures meant to stimulate the economy or insulate Canadians from the impact of tariffs appear to exclude small firms.”
• The $51-billion Building Communities Fund is to focus on projects using unionized labour, which would effectively exclude 90% of small businesses.
• The $1-billion Regional Tariff Response Initiative delivered by Regional Development Agencies misses the mark and excludes over half of small businesses that will be deemed too small or in the wrong sector.
• The Canadian Entrepreneurs’ Incentive announced in budget 2024, repeated in the Fall Economic Statement and confirmed as recently as January 2025, has now been officially cancelled.
But Kelly said there were a few wins for small business owners in the budget, albeit many were reannouncements from 2024.
• Government is reintroducing the Accelerated Capital Cost Allowance on most capital assets and immediate expensing provisions. The budget also extends immediate expensing to manufacturing and processing buildings. This is a sound way to improve productivity among many Canadian SMEs.
• Legislation to increase the Lifetime Capital Gains Exemption to $1.25 million has been confirmed. This is an important measure to help with small business succession plans.
• Legislation to remove income taxes from the Canada Carbon Rebate (CCR) for Small Business and to extend the deadline will be introduced. CFIB has also confirmed with government sources that the $623 million in CCR payments for 2024/25 will be distributed before the end of the year.
“Small business confidence in the economy remains incredibly low given the massive uncertainty over tariffs from the U.S., China and now India,” said CFIB’s executive vice-president of advocacy Corinne Pohlmann.
“While progress was made on a few fronts, there were very few new measures that will offer immediate help for small business owners trying to keep the lights on.”
The full budget can be found here.
Restaurants Canada said it is underwhelmed by the lack of measures addressing cost of living in Budget 2025 and alarmed about further cuts to immigration that will make it even more challenging for foodservice businesses to hire for hard-to-fill roles and in rural, remote and tourism areas.
“We are disappointed that the budget doesn’t include sufficient measures to improve everyday affordability for Canadians, including Restaurants Canada’s ask to exempt all food from GST. At a time when people struggle to afford essentials and food inflation in particular has been outpacing the rate of general inflation, we need more immediate action on this issue from our government,” it said.
“Our analysis of the GST/HST holiday earlier this year suggests that a permanent exemption for prepared food could create up to 80,000 jobs in foodservice and related industries, including many youth jobs, save $5.4 billion in taxes for consumers and lead to $1.5 billion in additional tax revenue and EI savings for government. Restaurants Canada will continue our advocacy on this recommendation.”
Restaurants Canada said it is incredibly concerned with the extreme reduction in temporary resident admissions from 673,650 in 2025 to 370,000 in 2027. The budget not only further cuts immigration levels but also does not recognize the importance of the foodservice industry in its updated immigration plan or provide a path forward for our sector to fill vacant roles.
“Temporary residents make up a small part of our total workforce, but they fill essential positions like chefs and cooks, hard-to-staff overnight shifts and roles in rural, remote and tourism regions where there are not enough local workers available. These workers allow our industry to be the fourth largest private sector employer, with over 1.2 million workers in every community. If a restaurant can’t hire a trained sushi chef, for example, it may have to cut staff hours or opening hours, or close entirely, putting Canadian jobs in jeopardy,” it said.
“We are, however, encouraged that the plan will consider the unique needs of rural and remote communities. We urge the government to allow the foodservice industry to access this labour pool.”
While we appreciate that the budget includes measures to help youth upskill, we are disappointed that it does not include any concrete measures to stimulate youth jobs. The foodservice industry has been the number one source of first-time jobs for youth for decades. In fact, 42% of the restaurant industry’s workforce is currently youth–we employ over 500,000 youth, representing one in five youth jobs in the country. We encourage the federal government to ensure that restaurants are eligible to participate in programs like the Canada Summer Jobs, the horizontal Youth Employment and Skills Strategy, and the Student Work Placement Program, added the national organization.
“We welcome the government’s commitment to improve public safety by expanding the capacity of the RCMP to hire 1,000 personnel to increase federal policing capacity across Canada. Restaurants are often at the forefront of public safety issues as they are public facing. While operators care deeply about their communities, they are ill-equipped to handle substance abuse and mental health concerns which threaten the safety of their staff and customers and cost them thousands in damages and increased security costs.”
“The foodservice industry is at a turning point—we are facing intense pressure from rising input costs and reduced consumer spending, and yet we have outpaced other industries in job creation over the past year. We need government to recognize our important role in the economic strength of not just communities, but the country as a whole, and invest in our industry,” said Kelly Higginson, President and CEO of Restaurants Canada.
The Canadian Taxpayers Federation criticized Prime Minister Mark Carney for ballooning spending and debt in Budget 2025.
“Budget 2025 shows the debt continues to spiral out of control because spending continues to spiral out of control,” said Franco Terrazzano, CTF Federal Director. “Carney needs to reverse course to get debt and spending under control because every dollar Canadians pay in federal sales tax is already going to pay interest charges on the debt.
“Carney isn’t close to balancing anything when he’s borrowing tens of billions of dollars every year.”
The federal deficit will increase significantly this year to $78.3 billion. There is no plan to balance the budget and stop borrowing money. The federal debt will reach $1.35 trillion by the end of this year, said the organization.
It said debt interest charges will cost taxpayers $55.6 billion this year, which is more than the federal government will send to the provinces in health transfers ($54.7 billion) or collect through the GST ($54.4 billion).
Budget 2025 increases spending by $38 billion this year to $581 billion.
Despite promises to control spending in future years, Budget 2025 projects that overall spending will continue to rise by billions every year, said the CTF.
“Canadians don’t need another plan to create a plan to meet about cutting spending, Canadians need real spending cuts now,” Terrazzano said. “The government always tells Canadians that it will go on a diet Monday, but Monday never comes.
“And the government isn’t really finding savings if it’s planning to keep increasing spending every year.”
Budget 2025 commits to “strengthening” the industrial carbon tax and “setting a multi-decade industrial carbon price trajectory that targets net zero by 2050.”
“Carney’s hidden carbon tax will make it harder for Canadian businesses to compete and will push Canadian entrepreneurs to set up shop south of the border,” Terrazzano said. “Carney should scrap all carbon taxes, cut spending and stop taking so much money from taxpayers.”
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