CFIB asks Ottawa to cut small business tax rate to 6 per cent in 2026 budget

The Canadian Federation of Independent Business wants the federal government to cut the small business tax rate from 9 per cent to 6 per cent in the 2026 budget, the federation said in a release dated Nov. 4.¹

The CFIB also asked Ottawa to raise the small business deduction threshold to at least $700,000 and to index it to inflation going forward. It listed the tax rate and threshold changes as its top priorities for the budget.¹

Thresholds unchanged for decades

The federation asked the government to raise and index tax thresholds it described as outdated, including the GST/HST registration threshold, unchanged since 1991, from $30,000 to at least $60,000. It also wants the CPP basic exemption, unchanged since 1998, raised from $3,500 to $7,000.¹

On trade, the CFIB asked that counter-tariff revenues be returned to businesses directly affected by the U.S.-Canada trade war, and that tariff relief options be provided for businesses under $1 million in revenue.¹

Premiums and capital gains

The federation proposed lowering Employment Insurance premiums for smaller employers by letting them pay the employee amount for total wages under $600,000, which it compared to the EI Small Business Job Credit of 2015/2016.¹

It also asked for a lower capital gains inclusion rate for small firms of 33 per cent on the next $2 million of gains beyond the Lifetime Capital Gains Exemption. The CFIB further proposed exempting taxes on capital gains incurred after the sale of a business, in shares and assets, when the proceeds are reinvested in a Canadian-controlled private corporation within three years.¹

Who will be in Ottawa

CFIB president Dan Kelly, executive vice-president of advocacy Corinne Pohlmann and vice-president of national affairs Jasmin Guenette will be in Ottawa on Nov. 5 to discuss the budget and its implications for small businesses, the federation said. The CFIB said it will be available for comment before and after the budget.¹

The federation describes itself as Canada's largest association of small and medium-sized businesses, with 103,000 members across every industry and region.¹