Tax and tariff relief top small businesses' wish list for Budget 2026
CFIB calling for lower tax rate for small businesses, lower EI payments and tariff support
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relief → top → businesses
For entrepreneurs like Karla Briones, owning a small business has only been getting harder.
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owning → own → business
She's owned two Global Pet Foods franchises in the Ottawa area for more than a decade, but says costs are now rapidly rising, shrinking her margins and making it more difficult to compete with low-cost online retailers.
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it → own → retailers
Her distributors have also passed on some tariff-related costs, forcing her to raise prices on store shelves.
"There are rising costs in absolutely everything.
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distributors → pass → everything
Commercial rent, employment, our inventory — everything is rising, but we're trying to stay competitive," Briones said.
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Briones → rise → ?
Briones isn't the only one struggling.
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Briones → struggle → ?
Many small and medium-sized employers country-wide — which employ more than 60 per cent of the private-sector workforce in Canada — have faced challenges from tariffs and slowing consumer spending, according to Jasmin Guénette, vice-president of federal affairs with the Canadian Federation of Independent Business (CFIB).
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which → employ → Business
"Canada is facing an entrepreneurial drought, meaning that at the moment, more small businesses are closing than opening in this country."
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businesses → face → country
Ahead of Thursday's federal budget, Finance Minister François-Philippe Champagne foreshadowed to an audience at the Canadian Club in Toronto on Monday that small businesses would "see themselves" reflected in the government's financial plan.
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themselves → foreshadow → plan
That would be welcome news for many business owners and the groups that represent them, who are hopeful the 2026 budget might include improved tax measures and programs that can support them through punishing tariffs.
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that → represent → tariffs
Less taxes for small businesses top of CFIB's list
Topping the CFIB's wish list for the budget are tax changes that would bring down the cost of doing business.
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that → top → business
The federal tax rate for small businesses currently sits at around nine per cent, which the lobby group wants reduced to six per cent.
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group → sit → cent
It said it would also like to see the small business income threshold — which allows businesses to pay that lower tax rate on a portion of their earnings, before being taxed at a higher 15 per cent rate — raised from $500,000 to $700,000.
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businesses → say → 700,000
Guénette says such a move would have the broadest impact on small and medium-sized business owners across all sectors, who told the CFIB they would use the tax savings to reinvest in their operations.
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they → say → operations
Karla Briones rearranges cans of pet food on a shelf at one of the Global Pet Food franchises she owns in the Ottawa area.
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she → rearrange → area
Briones is hopeful the budget will help business owners like her following comments earlier this week by Canada's finance minister.
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budget → help → minister
That could include measures like new training opportunities and higher compensation for employees, as well as new equipment and machinery, she says.
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she → include → employees
The finance minister signalled on Monday that changes aimed at simplifying taxes could be coming.
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changes → signal → taxes
Briones says any such move would free up time for her to focus on other areas of her business, while the CFIB's ask would also be a much-needed boost.
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ask → say → business
But even better, she says, would be a cut to employment insurance premiums for small businesses, allowing employers to pay the same EI premium rates as their employees (something the CFIB is also calling for), as that would immediately put more money in her pocket.
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that → say → pocket
"That would be incredibly useful for us on a payroll-by-payroll basis, as opposed to waiting until … we file our taxes to get credits or to get other types of support," Briones said.
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Briones → oppose → support
That flow of cash has been one of the biggest hurdles for Briones, and one of the reasons why she hasn't yet jumped to use the government's productivity mega-deduction, a measure announced in September that allows businesses to expense the total value of many kinds of investments, including things like equipment.
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businesses → jump → equipment
Those investments can be expensed immediately, but Briones says she would still need the upfront cash to pay for a new freezer or point-of-sale system before she gets the money back, which isn't always easy.
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which → expense → money
She says an interest-free lending program to help businesses of all kinds make those investments is on her wish list.
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businesses → say → list
But Eric Saumure, an Ottawa-based small business finance expert and accountant with Zenbooks, says he isn't holding his breath.
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he → base → breath
In a pre-budget blog post, he wrote the mega-deduction and already-announced tariff relief measures will likely leave little room in the budget for more spending for businesses.
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deduction → write → businesses
"Put those together and my read is that Ottawa has already made its big business tax move for the year.
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Ottawa → put → year
"
More tariff relief, help accessing new markets
With the latest round of 50 per cent U.S. tariffs hitting small and medium-sized businesses in particular, many are also hoping the budget brings further trade war relief.
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budget → access → relief
The CFIB has said some 46 per cent of small exporters are directly impacted by the U.S. levies, while 49 per cent of small importers are impacted by Canada's counter-tariffs.
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cent → say → tariffs
Amit Thakkar says his Brampton, Ont.-based fabric and apparel companies, House of Blanks and Roopa Knitting Mills, have both taken a hit due to 50 per cent U.S. tariffs on clothing.
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companies → say → clothing
He applauded existing tariff measures like the regional tariff response initiative, which gives eligible companies impacted by the levies up to $3 million overall.
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which → applaud → million
But Thakkar says some of those programs are limited in the kind of costs they cover.
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they → say → costs
They also require businesses to apply for them and prove their eligibility, which Saumure also says is an obstacle.
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Saumure → require → eligibility
In a pre-budget submission, Zenbooks suggested the government give automatic tariff relief payments to impacted businesses to reduce that barrier.
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government → suggest → barrier
Amit Thakkar is the president of Roopa Knitting Mills and House of Blanks, which make apparel and fabric in Brampton, Ont.
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which → make → Brampton
Some clothing items were hit with 50 per cent tariffs by the U.S., and Thakkar says he'd like to see more relief measures in this Thursday's budget.
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he → hit → budget
In the budget, Thakkar would like to see revenue from counter-tariffs given directly back to the small businesses impacted by them — similar to another measure the CFIB has called on the government to implement.
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CFIB → like → government
But beyond that, he says businesses still need to have a customer once they've received support.
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they → say → support
"We've got to make sure there's a customer at the end of the tunnel," he said.
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he → get → tunnel
"It's all in vain if there's no sales to attribute to it."
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It → be → it
…and 2 more, not listed.
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