Canadian business groups have offered contrasting assessments of the federal government’s 2026 budget, with the Canadian Federation of Independent Business (CFIB) criticizing the lack of direct support for small firms while Restaurants Canada says several measures could create opportunities for investment and economic growth in the restaurant sector.
The responses highlight differing expectations for a budget that includes capital investment incentives, tax simplification measures and proposed changes to the Canadian Growth Incentive, but does not introduce the tax reductions and tariff relief CFIB says small businesses need.
CFIB criticizes lack of small-business support
The CFIB said the Nov. 5 budget falls short of expectations for small business owners facing rising operating costs and trade-related pressures. The organization said the government missed an opportunity to provide tax relief and address shortcomings in existing tariff support programs.
“While there is a reannounced Mega Deduction and a focus on mega projects, small business owners will find the 2026 budget mega disappointing,” said Dan Kelly, CFIB President. “If you are a small business owner struggling to keep your business going in the face of rapidly rising costs and a trade war, the budget will provide you with no help whatsoever.”
Kelly said the absence of new tax reductions and tariff relief was particularly disappointing, noting that smaller businesses remain excluded from existing tariff support programs.
“Small business owners are looking for tax reductions and tariff relief, and the budget provides neither. I find it appalling that, a year and a half into the trade war, the government hasn’t even bothered to fix the failing tariff relief measures. The budget speech says government will be at the side of Canadian businesses for as long as it takes. Sadly, this remains untrue as small firms with less than $1 million in sales do not qualify for any of the existing tariff support programs, despite Canada having collected more than $14 billion in counter-tariff revenue," Kelly added.
The organization did identify several positive measures, including the expanded Mega Deduction and enhancements to Small Business Rollovers, which it said could support investment by smaller companies. It also pointed to tax simplification initiatives and the government's commitment to reducing the regulatory burden by $2 for every $1 in new regulatory costs.
The proposed Canadian Growth Incentive (CGI), which includes a $15-million capital gains exemption, was another measure the CFIB said could encourage investment and business creation if appropriately designed.
“The CGI has a lot of potential to help address the decline in business starts that Canada has been facing in recent years,” Kelly said. “But, as usual, Ottawa has decided to limit the initiative by adding a bunch of complicated rules which result in excluding about half of the businesses that could otherwise use it. It makes absolutely no sense that a family farm, a hotel, restaurant, forestry or fishing business, engineering firm or arts/entertainment business would be excluded. CFIB strongly supports the spirit of this proposal, but will immediately lobby to simplify it by including all sectors covered by the Lifetime Capital Gains Exemption.”
Kelly said the organization would continue pushing for changes to the budget measures, arguing that small businesses need greater consideration in federal economic policy.
“While the government is introducing some helpful measures that focus on tax simplification and regulatory reduction, small businesses appear to remain in the government’s blind spot,” Kelly said. “And as Canada’s debt grows close to $1.4 trillion, it is critical that we look at new approaches to stimulate business creation and small business growth to help get us out of this mess.”
Restaurants Canada identifies investment opportunities
Restaurants Canada took a more positive view of the budget, supporting the government's focus on business investment, economic competitiveness and affordability. The national industry association said measures involving capital investment incentives, tax simplification and immigration could benefit restaurant operators, depending on how the programs are structured and implemented.
Restaurants Canada President and CEO Kelly Higginson said restaurants should be included in the implementation of federal initiatives, given the sector's economic contribution and reliance on small businesses.
"Restaurants are an essential part of Canada's economy, supporting 1.2 million jobs as the country's fourth largest employer, purchasing $30 billion annually from Canadian food and beverage producers, and supporting communities across the country," said Kelly Higginson, President and CEO of Restaurants Canada. "We support the government's focus on building a stronger, more competitive Canadian economy, and it is important that restaurants are recognized and included as these initiatives move forward."
The association said 98 per cent of restaurant businesses are small businesses and noted that operators continue to face significant financial pressures. It reported that 67 per cent of operators had lower profitability than a year earlier.
Higginson said access to workers and support for local businesses would be important to the government's broader economic objectives.
"A strong economy needs strong local businesses and access to the workforce required to support growth," added Higginson. "We look forward to working with the federal government to support these efforts to strengthen Canada's economic prosperity."
Restaurants Canada describes the foodservice industry as a $129-billion sector employing 1.2 million Canadians and the country's largest source of first-time jobs. The association said the budget's potential benefits for restaurants will depend on the details of program implementation and whether the sector is included in the measures moving forward.