OTTAWA, ON, Oct. 7, 2026 /CNW/ -- Only 7% of small businesses plan to grow or diversify significantly over the next 12 months, according to the latest research from the Canadian Federation of Independent business. A third of small businesses (31%) say they aren't growing because of cost and economic pressures, and of those, over half (59%) cite the tax burden as the biggest barrier preventing their business from expanding.
"When small business owners are telling you they're stuck in neutral and it's taxes that are the number one thing standing between them and growth, it's time to listen," said Corinne Pohlmann, CFIB's executive vice-president of advocacy. "Small firms have been crystal clear that they would rather see government reduce taxes than announce programs and grants that only target a small pool of applicants. The best way to invest in Canada's small businesses is for government to get out of the way. Cutting the small business tax rate should be government's number one priority in the upcoming fall budget."
CFIB is making 13 tax recommendations to government for the upcoming budget, including:
- Reducing the small business tax rate from 9% to 6%, increasing the deduction threshold from $500,000 to at least $700,000, and indexing it to inflation moving forward;
- Increasing the GST/HST threshold (unchanged since 1991) from $30,000 to at least $60,000 and indexing it to inflation moving forward;
- Exempting taxes from gains following the sale of a business (shares and assets) when the proceeds are reinvested in a Canadian CCPC within the next three years;
- Introducing a lower capital gains inclusion rate for all small firms of 33% on the next $2 million of gains beyond the Lifetime Capital Gains Exemption;
- And providing the self-employed with some type of standard business deduction or refundable tax credit of up to $20,000 similar to the Qualified Business Income (QBI) Deduction recently made permanent in the U.S.
If the federal government reduced the tax burden, nearly two-thirds (62%) said their top priority would be cutting the small business tax rate from 9% to 6%. Three in five (58%) of small businesses say they'd use tax savings to increase employee wages. Nearly half (48%) would pay down debt, and 47% would expand their business.
"Every dollar Ottawa takes in small business taxes is a dollar that doesn't go toward an employee raise, a new hire, or new equipment," said Jasmin Guénette, CFIB's vice-president of national affairs. "Entrepreneurs know where the money will do the most good, and time and time again they tell us it goes straight back into their people and their businesses. The upcoming budget is an opportunity for the government to be bold and send a clear message to Main Street that Canada is the best place to start, run and grow a business. That starts with fixing our tax system so that it works for small businesses."
CFIB's petition urging the federal government to cut the small business tax rate now has nearly 10,000 signatures. Small business owners can sign the petition here.
Methodology
Final results for the CFIB Fiscal Policy Survey. The online survey was conducted between August 6 – September 3, 2026, n = 1,694. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/- 2.4%, 19 times out of 20.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 103,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
SOURCE Canadian Federation of Independent Business (Toronto)
For media enquiries or interviews, please contact: Dariya Baiguzhiyeva, CFIB, 647-464-2814, [email protected]
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