Toronto – Deputy Prime Minister Chrystia Freeland on growing Canada’s small businesses, said in Toronto:
Good morning everyone.
I am so glad to be here home in Toronto, in my own riding, in my own neighbourhood, with two wonderful colleagues, Minister Rechie Valdez, and Jean Yip. And I am really happy to be at Bateman’s. This is my local bike shop!
Bateman’s is such a great example of how small businesses are the heart of our economy. They are also the heart of our communities. And that is what I want to talk about today.
We are living at a pivotal moment for Millennials and Gen Z.
These young Canadians have so much talent and so much potential.
But today, too many young Canadians feel as though the deck is stacked against them. They can get a good job, they can work hard, but far too often, the reward of a middle class life, a life that is secure, comfortable, prosperous, remains out of reach.
We are acting today to ensure fairness for every generation.
We are moving to help build more homes, faster.
We are making life cost less.
And we are driving the kind of economic growth that will ensure every generation of Canadians can reach their full potential.
Our country works best when our economy is growing and when there are opportunities for every generation.
To drive the kind of growth that will deliver prosperity for Canadians—and for everyone here at Bateman’s—the budget I tabled on Tuesday redoubles our efforts to attract investment, increase productivity, boost innovation, and create good-paying, meaningful jobs.
And that absolutely includes small businesses. You truly are the engine of our economy, and the heart of our communities. That’s no exaggeration—about 64 per cent of Canadians work at small- and medium-sized businesses. And we need to ensure that we are setting you up for success.
That’s why, with this budget, we’re making it easier to start new businesses and to help existing businesses to grow.
One way to do that is by delivering on our promise to return carbon pricing proceeds to small- and medium-sized businesses.
Our new Canada Carbon Rebate for Small Businesses will soon return over $2.5 billion directly to about 600,000 small- and medium-sized businesses.
For businesses in Ontario that are about the same size as Bateman’s, that could mean a cheque of up to $7,000.
We are working hard to get the technical systems at the CRA set up as quickly as possible and are hopeful that cheques can be delivered by the end of the year. And then going forward, every year, eligible businesses will receive a cheque after they file their taxes.
What has been important for us in setting up the new rebate for small businesses is to make it automatic. Eligible small- and medium-sized businesses just need to file their taxes; the CRA will automatically assess you and send you a cheque.
You don’t have to apply for anything.
It’s a system designed to be fair and affordable—while reducing the pollution that is causing climate change. And this new rebate is going to deliver real, meaningful support for businesses like Bateman’s.
We are also making Canada’s tax system more fair—by ensuring that the very wealthiest pay their fair share.
In Canada and around the world, the 21st century winner-takes-all economy is making those at the very top richer, while too many middle class Canadians are struggling just to avoid falling behind.
The job of our tax system is to lean against this structural inequality—to fund investments in the middle class, especially in young Canadians, by asking those who are benefitting from the winner-takes-all economy to pay a little bit more.
Today, our tax system doesn’t do that. Today it is possible for a carpenter or a nurse or a bike mechanic to pay tax at a higher marginal rate than a multi millionaire. That isn’t fair.
That’s why we are supporting small businesses by increasing the lifetime capital gains exemption to $1.25 million.
Currently, Canadians can exempt around $1 million in capital gains tax-free on the sale of small business shares as well as farming and fishing property. Starting on June 25th this year, business owners with capital gains of up to $2.25 million will be better off under our new rules. That is going to help small businesses save money while increasing tax fairness at the same time.
In that same spirit, we are creating a new Canadian Entrepreneurs’ Incentive. With this incentive, the inclusion rate will be reduced to 33.3 per cent on a lifetime maximum of $2 million in eligible capital gains when it is fully rolled out.
Entrepreneurs will then have a combined exemption of at least $3.25 million when selling all or part of a business.
This will ensure Canadian entrepreneurs get to keep a bigger share of the profits from the risks they take and the hard work they do—and have more money to reinvest into their next venture.
All of this is on top of our government’s commitment to keep taxes on small businesses low—in fact, at an average combined federal-provincial rate of 11.6 per cent, Canada has the lowest tax rate on small businesses in all of the G7.
Because Canada depends on small businesses and entrepreneurs for a prosperous future and good-paying jobs. Canada’s success depends on your success. That is why we are supporting you.
We’re acting now because the cost of inaction today would be borne chiefly by young people. We would be leaving them behind. And we cannot—we simply will not—do that. Instead, we will help them realize the promise of Canada with a responsible economic plan that creates new career opportunities and grows the economy for every generation.
Today we say to our younger generations, and to those who care about them: We are putting the power of government to work for you.
Together, we will unlock the door to the middle class for more Canadians—and renew the promise of our great country.
Thank you very much.