Small businesses get a tax cut

Ashley
Ashley Fitzpatrick
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A corporate income tax rate goes low in latest budget

In Budget 2014, the Progressive Conservative government has rolled back the small business corporate income tax rate from four per cent to three per cent.

The change, it was emphasized Thursday, brings Newfoundland and Labrador in line with Nova Scotia for the lowest small business corporate income tax rate in Atlantic Canada, with New Brunswick and Prince Edward Island both sitting at a tax rate of 4.5 per cent.

This province’s tax cut was welcomed by representatives of the business community, including the St. John’s Board of Trade and the Canadian Federation of Independent Business (CFIB) in Newfoundland and Labrador.

Expecting big impact

Vaughn Hammond with the CFIB, who was at the Confederation Building as the budget was read, said it would be wrong for anyone to say the small business tax break would not have much of an effect.

“The government has identified (it will reach) 6,000 businesses. So if you look at the people that are going to be affected by that ... the company within our membership has an average of 20 employees, so you’re kind of looking at 120,000 people that would be affected by this small business tax rate,” he said, putting forward an estimate on the numbers.

“We’re quite pleased with the fact the small business tax rate is going to go down in July to three per cent,” he said. “That’s something we’ve been asking for for quite a while and so we’re pleased to see that.”

He said the savings for business owners will allow for more to go towards worker training, wage increases, investments in equipment and expansion.

Unfunded public-sector pension

Yet, despite his approval for the small business tax break, Hammond steered discussion to the province’s unfunded public-sector pension liability, expected to grow to almost $9 billion of net debt by 2016-17.

“It’s crowding out everything else that we want,” he said.

Organizations: Canadian Federation of Independent Business, Board of Trade

Geographic location: Newfoundland and Labrador, Nova Scotia, Atlantic Canada New Brunswick Prince Edward Island

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Recent comments

  • Joe
    March 28, 2014 - 06:58

    " so you’re kind of looking at 120,000 people that would be affected by this small business tax rate,” There is no affect for the 120,000. This guy must have rocks in his head!

  • Angus
    March 28, 2014 - 04:36

    "He said the savings for business owners will allow for more to go towards worker training, wage increases, investments in equipment and expansion." This sounds like more unpaid internships and EI Topups. "Hammond steered discussion to the province’s unfunded public-sector pension liability, expected to grow to almost $9 billion of net debt by 2016-17" Should government decide to slash benefits then the business community will feel the results especially the retail and service sector.

  • Angus
    March 28, 2014 - 04:29

    Meanwhile the PC's put another $10M in a slush fund for the local business community.