The 2015 federal budget was announced this week…but what does it mean for your small business? As it turns out, it could mean quite a lot.
To begin with, there is a measure to cut the small business corporate tax rate from 11% to 9%. Here’s what this could mean for your small business:
- If you earn a net yearly taxable income of $30,000, you save $1,500 over four years.
- Net yearly taxable income of $500,000: you save $25,000 over four years.
If you are already a member of the Canadian Federation of Independent Business (CFIB), you’re aware of how hard we have been fighting for this measure on behalf of the small business community in Canada. Your feedback helped identify this as the top priority for us leading up to the federal budget, so thank you!
In addition to the small biz corporate tax cut, there is a lot more good news in this budget.
More items in the 2015 federal budget, advocated by CFIB:
- Major changes at the Canada Revenue Agency (CRA) including:
- fewer tax remittances for startups to help cut down on time-consuming paperwork;
- commitment to honour all written advice (be it through emails or their website); and
- a new CRA forum with CFIB, for you to share your concerns.
- Substantial reductions in credit card processing fees plus new rules to promote fairness in the payments industry.
- 1 for 1 rule to combat red tape – Every time a new regulation is introduced, an old, ineffectual or out of date regulation will be cut. If you haven’t struggled yet with red tape, don’t worry, you will.
- Increase of the Lifetime Capital Gains Exemption for farmers and fishers to $1 million immediately*. This helps small business owners save for retirement.
- Introduction of balanced budget legislation**.
- A review of passive income rules. Right now, owners of campgrounds and self-storage facilities are unable to access the lower small business corporate tax rate because their income is considered passive. We will keep you apprised of the outcome of this review.
- Accelerated Capital Cost Allowance (CCA) for manufacturers for the next 10 years.
- Confirmation that small firms will save 15% on Employment Insurance rates through the Small Business Job Credit. Larger premium cuts will then begin in 2017.
*CFIB is proud of this accomplishment, and we’re dedicated to expanding the increased exemption to benefit all small businesses in Canada.
** 82% of CFIB members supported this balanced budget legislation and we thank you for your feedback.
See CFIB President Dan Kelly’s reaction to the federal budget: