Nearly three in four (74%) small businesses are worried about the lack of a plan to return to a balanced federal budget as Canada continues running deficits and racking up federal debt, said the Canadian Federation of Independent Business (CFIB) in a statement released on Wednesday.
The federal debt has nearly doubled in the last 10 years, rising from $602.4 billion in 2012/2013 to $1,173 billion in the 2022/2023 fiscal year, said the national organization.
Jasmin Guénette
“The federal government must introduce a timeline to balance the budget. Our economy and our entrepreneurs cannot sustain this level of debt forever. Too much money is spent to manage our debt. That’s money that could instead be used to reduce taxes and the cost of doing business,” said Jasmin Guenette, Vice-President of National Affairs at CFIB. “Ottawa needs to stop acting as if it has money to burn and, instead, work to avoid driving up the national debt.
“Increasing taxes is not a sustainable solution. It’s well beyond time for the government to get its fiscal house in order.”
The CFIB is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region.
It said all the money to be collected from the goods and services tax (GST) across Canada barely covers the $54 billion in annual interest payments on the country’s national debt. It is the equivalent of the total combined provincial budgets of Manitoba, Saskatchewan and Newfoundland and Labrador in 2024/2025.
“Looking ahead, Canada’s debt charges are projected to further rise to $64.3 billion in 2028-29 due to higher borrowing requirements and interest rates. The money that will be spent on debt charges in 2028/2029 is the equivalent of what could have been used to eliminate the GST, energy taxes, custom import duties and excise taxes combined in the 2022/2023 fiscal year,” said the CFIB.
Juliette Nicolaÿ
“Entrepreneurs know that today’s deficits result in tomorrow’s new or higher taxes. Recurring deficits deter future entrepreneurs from entering the market and current ones from making the investments to grow their businesses. Canada must curb its spending tendency and implement solid fiscal anchors to help keep spending in check. The upcoming Fall Economic Statement and 2025 Budget is a great opportunity to start,” said Juliette Nicolaÿ, CFIB’s policy analyst and co-author of the analysis.
Read the full report here.
CFIB recommends the federal government:
- Implement a clear path to balancing the budget with specific indicators to measure progress.
- Commit to a fiscal anchor that will actually reduce the deficit and debt.
- Implement legislated spending limits for the government outside of a global crisis.
- Commit to undertaking meaningful internal reviews to reduce the size and cost of the federal public service.
- Freeze the operating budget of all departments at their current levels.
- Avoid introducing new or expanding social programs (e.g., dental care, pharmacare etc.).
- Sell government assets (e.g. Crown corporations, land, buildings) where it makes sense.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list. He was also named by RETHINK to its global list of Top Retail Experts 2024.
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