New Free Trade Agreement may hurt small businesses: MP Sorenson

Duty-free purchases being raised to $150 from $20

By Kevin Sorenson, MP Battle River-Crowfoot

Small Business Week, Oct. 14 to 20, is a great opportunity for us to highlight the importance of small businesses and to commend small business owners for their tremendous contribution to our communities and the Canadian economy.

As of December 2015, there were 1.17 million private sector businesses employing 11.6 million people in Canada. Of these, 1.14 million or 97.9 per cent were small businesses with 8.2 million employees or 70.5 per cent of the total private labour force. In 2014, small businesses contributed an average of 30 percent to the Gross Domestic Product (GDP). Over the last decade, small and medium-sized enterprises (SMEs) have been responsible for over 95 per cent of all jobs created.

While Ontario and Quebec lead the country in terms of the most small businesses, Western Canada has a robust and growing small business community lead by B.C. and Alberta. In terms of the number of small businesses, relative to the population, Alberta leads the country with a ratio of 50 per 1,000 population.

According to a 2014 Alberta Small Business Profile, posted in April 2015 (the latest date for which statistics can be found) by the Government of Alberta, small business made up 95 per cent of all business and 35 per cent of private sector jobs in our great province. In 2013, there were 158,049 small businesses, which are defined as businesses with less than 50 employees. Furthermore, Alberta’s small businesses continue to be leaders in generating economic activity contributing over 25 per cent of the provincial GDP.

The 2013 Small Business Provincial Tax Index, issued by the Canadian Federation of Independent Business (CFIB), rated Alberta as having the most small business-friendly tax system in the country. Unfortunately, to the best of my knowledge and an online search, statistics and ratings have yet to be updated. I suspect that rating may have changed in the last five years in light of the fact we have now had an NDP government since May 2015 who is not always supportive of small business.

The CFIB recently provided the results of their latest survey in which overwhelmingly small business owners in Battle River-Crowfoot expressed concerns regarding the Liberal government raising taxes on passive income, limiting the sharing of business income, raising CPP premiums in 2019, hiking EI premiums and implementing the carbon tax.

On Sept. 21, I rose in the House of Commons to ask the Finance Minister when he would “stop failing small business, or does he believe, like the Prime Minister, that they (small business owners) are nothing but tax cheats?” I failed to get an answer that would in any way appease concerns.

As everyone starts combing through the details of the new free trade deal with the U. S., small business owners may start raising additional concerns. The so-called ‘de minimis’ threshold for duty-free purchases is being raised to $150 from $20. Canadians being able to buy more from the United States duty-free may encourage them to buy more American products over the Internet, which could negatively impact small retailers. I say, “may” or “could” because it is too early to determine the full impact of the United States, Mexico, Canada (USMCA). Initial reactions are certainly mixed. Once I get the opportunity to digest all the particulars of this significant agreement, I will make it the subject of a future column.

If you have any concerns about USMCA as you read more about it, please share those worries with me.

If you have any questions or concerns regarding this or previous columns you may write me at 4945-50th Street, Camrose, Alberta, T4V 1P9, call 780-608-4600, toll-free 1-800-665-4358, fax 780-608-4603 or e-mail Kevin.Sorenson.c1@parl.gc.ca.

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