Small biz owners hopeful ahead of vote

Opinion

Hey there, time traveller!
This article was published 20/09/2023 (742 days ago), so information in it may no longer be current.

AS Manitoba’s Oct. 3 election approaches, small businesses are eager to have their concerns addressed, given all the challenges they are facing.

With party campaigns dominating headlines and all that’s been promised so far, small business owners are hopeful that the newly formed government will actually come through for them in the long run.

Small businesses have faced a tremendous amount of turmoil these past few years. Inflation, mounting debt, rising interest rates, and ongoing labour shortages have put 19 per cent of local Manitoba businesses at risk of closure.

Of those who are hanging on, many find themselves in a precarious situation, and are in need of support in order to recover and to grow. According to a recent pre-election survey from the Canadian Federation of Independent Business (CFIB), small business owners have clearly indicated their top priority is for the next provincial government to address the rising cost of doing business.

Over seven in 10 (72 per cent) of Manitoba small business owners said they believe “reducing the overall tax burden” should be the focus for the next provincial government. If economic growth and recovery are the goals, the province must deliver policies that will help reduce costs and regulatory burdens for local businesses.

Currently, there are two provincial taxes in Manitoba which routinely stymie business growth: the provincial payroll tax (i.e., the Health and Post-Secondary Education Tax Levy); and education property taxes.

These two taxes are particularly harmful because they are profit insensitive — meaning businesses that are barely making enough to keep the lights on are still required to pay them.

Manitoba’s provincial payroll tax is levied on employers based on the wages, salaries, and/or bonuses paid to employees. It’s effectively a penalty on employers for their investments in staffing and growth.

When it comes to education property taxes, in 2023, the average commercial property owner will pay about 7.2 times more than a homeowner on a property of the same assessed value of $339,000.

Small business owners appreciate that the provincial government has committed to phasing out education property taxes through rebates over the next few years, however, while residential rate payers will be rebated 50 per cent of their education property tax bills, commercial property owners will get back only 10 per cent.

With that in mind, it is no surprise that 72 per cent of Manitoba small business owners support the province’s commitment to phase out education property taxes while also ensuring commercial property owners aren’t paying more than their fair share in the meantime.

According to our pre-election survey, the majority (92 per cent) of small business owners believe the next provincial government must strive to become more tax-competitive with other Canadian provinces to better support both employers and employees. To that end, 73 per cent of Manitoba small businesses support reducing or suspending the collection of the provincial fuel tax (which currently sits at 14 cents per litre).

In addition, with 77 per cent of Manitoba small businesses indicating that energy and utility costs are placing significant financial strain on their business, freezing Manitoba Hydro rates until more businesses have had the chance to recover, would be the cherry on top.

Ultimately, small businesses want the next provincial government to adopt a “do no harm” approach. This means working to keep existing costs and regulatory burdens low, while also avoiding the addition of new costs and excessive regulatory requirements. Often with limited finances to allocate for specific expenses, there is little room for unexpected costs.

That is why, during this election campaign, CFIB is calling on all parties to thoroughly communicate their plans for the economy and small businesses — rather than glossing over how they’ll compensate for lost revenue and then making up a new tax once elected.

CFIB has asked each of the party leaders to share their plans regarding small businesses and economic growth should they form the next government. Their responses to our questions and further resources to help business owners prepare to vote can be found on our website at: Manitoba Election 2023: Small business priorities.

Seo Rhin Yoo is a CFIB policy analyst.