OTTAWA, March 29, 2012 /CNW/ - The 2012 federal budget had some positive news for small business with major progress on eight of CFIB's top 12 priorities for 2012. However, this budget did not go fast or far enough in dealing with spending, the federal deficit or public service compensation and pensions.
Employment Insurance (EI): Small businesses will be pleased that the EI Hiring Credit was renewed for 2012. "The recent increase in EI premiums harms small Canadian businesses and extending this credit makes it easier for them to continue to support Canada's economic recovery by creating jobs," said Catherine Swift, president of CFIB. In addition, positive changes have been made to the EI rate setting process and future increases will be capped at 5 cents for employees and 7 cents for employers.
Spending: "We were disappointed in the baby steps taken by the federal government to restrain its spending," commented Swift. While there has been a lot of talk about the amount of spending reductions in this budget, overall program spending continues to rise.
Pensions: The government has begun to tackle unsustainable federal public sector and MP pensions. CFIB is particularly pleased that there is a commitment to have public sector employees contribute more to their pension plans and measures were taken to discourage early retirement. "These are important steps in tackling the $150 to $230 billion unfunded liability currently facing the federal public sector pension plan," said Swift.
Old Age Security (OAS): While supportive of the idea of raising OAS benefits for those who delay their retirement, many small firms will be concerned with the increase in the eligibility age for OAS to 67. "Until all MPs and public sector workers start retiring at age 65 or older, there should be no increases in the eligibility age for Old Age Security for the rest of Canadians," Swift said.
Innovation Programs: While more details are needed, many small and medium-sized firms will be alarmed with the changes to Scientific Research and Experimental Development (SRED) tax credits.
CFIB was also pleased to see movement in some other key areas:
- increasing accountability at CRA by having it provide written responses in electronic form through the My Business Account,
- the government's commitment to make red tape reduction permanent by implementing a one-for-one rule, among other measures,
- work to reduce the backlog and processing time for immigration and temporary foreign worker applications to help small firms in their growing labour shortages.
For further information:
On budget night, please call Gisele Lumsden to arrange an interview with a CFIB spokesperson at 647 808-5769 (cell) or via email at [email protected]. For further information, please contact Meghan Carrington at 416 222-8022. To view CFIB's budget backgrounder, please visit www.cfib.ca