Federal budget to include new measures for small businesses, Champagne says

TORONTO · Finance Minister François-Philippe Champagne says Thursday's federal budget will include new measures to support small- and medium-sized businesses. Speaking in Toronto on Monday, Champagne said the budget will aim to simplify parts of the tax code for entrepreneurs. He told an audience at the Canadian Club Toronto that the government has the fiscal room to make long-term economic investments, citing Canada's triple-A credit rating. The budget will be the second delivered under Prime Minister Mark Carney.

Champagne said the tax code has "a number of boutique things" that can be difficult for small- and medium-sized businesses, often requiring them to rely on tax advisers. "I think you will see in this budget a journey to fixing a number of things, to make things more simple," he said. "To simplify the life of small- and medium-sized businesses. And I think that on Thursday, those who represent small businesses will see themselves in that budget." He described the plan as "a budget about entrepreneurs" and for "innovators" and "creators."

When pressed for specifics during a question-and-answer session, Champagne said the budget will be "going further" on the small business front. The minister also said the budget will include new details on major policies like the Canada Strong Fund investment vehicle announced in April. He referenced plans to "modernize" the ownership structure of Canada's largest airports, asking, "Our pension funds, and I like to say ours, as Canadians, are managing airports abroad with the best possible expertise. Why can't they do it at home?"

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Prime Minister Mark Carney has already announced the budget's likely biggest item, a Productivity Mega Deduction worth $36 billion over five years. The measure expands the ability to immediately write off investments in eligible capital assets. It was announced at an international investment summit that Carney hosted in Toronto in September, where the airport ownership plan was also unveiled. The government's first budget last November focused on funding Carney's election campaign promises.

In a report on Oct. 29, Scotiabank economist Rebekah Young, a former Finance Department official, said the budget could include a targeted tax review. She said the government could announce plans to study the various breaks known as tax expenditures, which are also referred to as boutique tax cuts. Such a review would fall short of the broad-based tax reform many business groups and economists have long called for. Benjamin Bergin of the Canadian Venture Capital and Private Equity Association said last week his members are cautiously optimistic the budget will include capital-gains incentives for Canadian startups and tax changes aimed at retaining Canadian entrepreneurs.

Conservative Leader Pierre Poilievre outlined his party's proposals for the budget in an open letter on Sunday. He said the government should cut wasteful spending, reduce debt and deficits, and eliminate fuel taxes. Poilievre wrote that the government should reduce the deficit until the budget is balanced, but said Carney has made that unrealistic. "So the bare minimum is that you keep your word. Reduce the debt and the deficit as a share of our economy," he wrote. The Globe and Mail reported last week that expectations were mounting for new small business measures in the budget.

With files from The Globe and Mail