Research tax credits, extension of a hiring credit, and promises to reform immigration and temporary foreign worker programs were noteworthy sections in Thursday’s federal budget that were praised by small-business owners and advocates.
“Over all I’d grade the budget a B for what it does to help small business,” said Catherine Swift, president of the Canadian Federation of Independent Business (CFIB).
The extension of credits will make it easier for small businesses to continue to support Canada’s economic recovery by creating jobs, she added. But “we were disappointed in the baby steps taken by the government to restrain its spending,” and the lack of corporate tax reductions.
Ms. Swift said CFIB was also pleased to see movement in areas the group has been advocating in briefs to the government. These include increasing accountability at Canada Revenue Agency by having it provide written responses in electronic form through the online tax program My Business Account, and a commitment to reduce red tape.
Dave Savard, a partner in software consulting company Beckard Associates Ltd., Toronto
Mr. Savard welcomes the extension of the incentive that provides a credit of up to $1,000 against the increased employment insurance premiums a small firm would have to pay for hiring new staff. “We hired a new employee last year on the credit and we plan to hire at least one more this year,” he said. “It's a great way to stimulate hiring and get people to work.”
Andrew Patricio, founder of small business consultancy Biz.launch.com
Mr. Patricio feels temporary incentives are too patchwork. “The government should get rid of or simplify the application of grants, incentives and credits. Many small-business owners can't take advantage of them as they're complicated and you often need to employ consultants to apply for them. I'd rather see a reduction of the small-business tax as an incentive to create jobs, as this would provide all small and medium entrepreneurs the same incentive.”
Matthew Protti, CEO of technology startup BlackSquare Inc., Calgary
BlackSquare plans to hire several new employees in the coming months, and Mr. Protti applauded the creation of a $400-million fund to help increase private sector investment of early-stage companies. “I'm curious to see how the program will be managed, but I’m cautiously optimistic that it will help enable start-up companies such as ourselves gain access to capital, which is in much shorter supply in Canada versus the United States. That access to capital is the single biggest issue around our ability to hire.”
Mr. Protti said the $100-million for the Business Development Bank of Canada to support venture capital activities is also welcome. “But it is unclear what the increased money will go toward. Is it a continuation of the current mandate? Or is the government looking for the BDC to reach out to companies which, for whatever reason, hadn't been supported in the past?”
Ratna Omidvar, president of diversity advocacy Maytree
Ms. Omidvar said the government’s promise to deal with the backlog and processing time for immigration and temporary foreign worker applications should help small firms ease their growing labour shortages. “It shows a recognition of the importance of immigration as a lever of prosperity. However, “while we look forward to the immigrants of tomorrow, we must also remember the immigrant who is here in Canada today. We must continue to invest in their success,” through training and employment assistance programs.
Brian Doody, chief executive officer of electronics firm Teledyne Dalsa Inc., Waterloo, Ont.
Mr. Doody he was very unhappy about changes being made to the Scientific Research and Experimental Development (SR&ED) program, which provides tax incentives for R&D. “Under new rules outlined in the budget, the tax incentives in the program will not apply to capital spending, meaning a capital-intensive electronics firm like Teledyne Dalsa will lose out.” The change could also turn off foreign technology companies from coming to Canada, he said.
Robert Burko, president of marketing company EliteEmail.com, Toronto
Mr. Burko found the budget plans contradictory. “The government seemed eager to position Canada as an innovative leader by providing new money for start-ups and research and development, which is great ... But, why in the very same breath would they make changes to the SR&ED program by eliminating capital expenditures?
“The government once again failed to honour its 2008 promise of indexing the lifetime capital gains exemption to inflation. If they want the private sector to really take the reins and grow the economy, then this would have been a nice way to reward entrepreneurs who are being asked to do all the heavy lifting. With the elimination of the penny, what will Canadians pick up off the ground for good luck?”
Elliot Fishman and Steven Fitzgerald, co-owners of Habanero Consulting Group, Vancouver and Calgary-based IT services firm.
Habanero has about 80-85 employees. Elliot is CEO of Catapult ERP, a business services firm spun out from Habanero in January.
Elliot: “Everyone we talk to is hiring aggressively or trying to hire and has been for a long time. We don’t need incentives as much as talented labour to tap into. Our issue is more one of available talent.”
Steven: “The biggest constraint is access to talent. (Change to foreign workers rules) is really valuable. We need to invest in capabilities, to invest in the younger end of the workforce. It’s critical we find the talent internationally. That will (foster) growth and innovation in Canadian small businesses.”