CFIB says that there's a huge pile of cash that would really help struggling Canadian SMEs right now
With many of Canada’s small business owners working harder than ever as they juggle economic pressures with the continued financial fallout of the pandemic, rates, and inflation, $3 billion would be a welcome windfall.
But the cash is tied up in five Canadian workers’ compensation boards (WCBs) which are overfunded by more than their own targets according to the Canadian Federation of Independent Business (CFIB).
Boards in British Columbia, Manitoba, New Brunswick, Prince Edward Island, and Yukon are holding more than the CFIB says is appropriate and it is calling for a rebate to help SMEs navigate the current challenging economic environment.
CFIB believes that 125% should be the funding target limit, but BC’s board is overfunded at 146% (its own funding target is 130%) and could provide a $2.5 billion windfall to the province’s small businesses.
Across the five overfunded boards, rebates for a small business with five employees could be in the thousands of dollars, ranging from $505 in the Yukon to $4,835 in British Columbia.
“Workers’ compensation boards are holding onto billions in extra money, while over half of small businesses (60%) are still carrying their pandemic-related debt, at an average of $126,000. Getting excess WCB money back to small businesses would be game-changing,” said Marvin Cruz, CFIB director of research. “Businesses could reinvest the funds or use them to keep up with inflation, maintain jobs or pay down their pandemic-related debt.”
Follow Ontario’s lead
Ontario is the only province to have a mandated rebate for businesses when its WCB reaches 125% overfunding and the CFIB is calling on other provinces to adopt this.
“Obviously, workers’ compensation systems need to be adequately resourced to continue the important work of supporting workers and making workplaces safer. But why should boards have more employer money than they need, while small businesses—the backbone of the Canadian economy—are still struggling?” said Duncan Robertson, CFIB policy analyst and co-author of the snapshot. “The source of funding for the boards comes directly from employer-paid premiums. So, it’s only fair for the boards to give back the excess money.”
