CFIB welcomes progress made by the federal government on tax, credit card fees
Canada’s small businesses are to gain some much-needed financial relief in the final quarter of the year including a long-awaited payment of their share of carbon tax revenue.
The Canadian Federation of Independent Business welcomed what it hailed important progress on two issues for small businesses which also includes savings on the fees they pay for processing credit card payments.
On the carbon tax, the CFIB has been highly critical of the delay in paying rebates totaling $2.5 billion, with its polling indicating that the frustration of businesses led to most calling for the carbon tax system to be scrapped altogether. This is still the case and the CFIB says it will continue to lobby for that.
But the federal government has now promised that payments will be made by the end of the year, based on the number of T4s issued by an employer, including those issued to the business owner, their family, part-time, and seasonal workers, as well as for positions that turn over.
"CFIB is relieved to learn the federal government will return the $2.5 billion small business share of carbon tax revenue that has been stuck in Ottawa for the past five years," said Dan Kelly, CFIB president. "It's good news that this money will be returned to small businesses by direct deposit or cheque before the end of the year. These are not trivial amounts of money. For example, a company with 10 employees in Alberta will receive nearly $6,000 in carbon tax rebates, a 25-person company in Saskatchewan will receive nearly $29,000, a 50-person business in Manitoba will receive $24,000 and a 100-person employer in Ontario will get $40,000."
Eligible businesses in the Atlantic provinces will receive smaller amounts as they have only been paying the federal carbon tax for one year.
Firms who are yet to file their 2023 corporate income taxes will also benefit from an extended filing deadline to December 31, 2024.
Credit card fees
The other good news was on credit card processing fees, which will be reduced by an average of 27% for small businesses processing less than $300,000 in annual Visa sales and $175,000 in Mastercard sales.
Small businesses will pay 0.95% average interchange rate for in-store sales and will qualify for a 0.1% cut in ecommerce fees. Again, this will add up to some significant savings and CFIB estimates that over 60% of its 97,000 members will qualify for the savings.
"Most small firms should see savings of between $300 and $400 for every $100,000 in Visa sales and $200 for every $100,000 in annual Mastercard sales," Kelly added. “CFIB will be closely monitoring all credit card processors to ensure the full value of the savings is passed on to the small businesses counting on this relief.”
