More than 7,500 small and medium-sized businesses (SMEs) in Quebec are at risk of seeing their taxes skyrocket by 259% due to labor shortages, fears the Canadian Federation of Independent Business (CFIB).
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A study published on Tuesday by the CFIB said a total of 7,576 SMEs are at risk of losing access to the small business deduction (SBD), of which 5,682 are at high risk.
The association recalls that Quebec is the only province that blocks access to the reduced tax rate for the smallest companies in the construction and services sectors that do not pay 5,500 hours of work (that is, slightly less than three full-time employees).
As a result, “many very small companies face more complex challenges due to their size, with stronger brakes, particularly paying $4,150 more for every $50,000 of profit,” he explains.
For François Vincent, vice-president for Quebec at the CFIB, the labor shortage problem represents “a sword of Damocles hanging over the heads of small business owners.”
“[Ils doivent] You face a 259% tax increase due to the loss of one or two employees. That does not make sense! “The Quebec government's tax policy represents a time bomb for thousands of companies,” he lamented.
The CFIB also states that 9,731 entrepreneurs have signed a petition calling on the government to “put an end to injustice.”[déduction pour petite entreprise] DPE” and “create a more favorable tax environment for SMEs”.
“During the March 12 budget we will see whether Prime Minister François Legault and his Finance Minister Eric Girard have decided to rub their hands when they see the new tax revenues being taken from the pockets of the smallest companies.” […] or if they rolled up their sleeves to eliminate this injustice,” Mr. Vincent added.
The survey was conducted from November 2nd to 20th, 2023 among 382 respondents.