Kerry-Lynne Findlay, Minister of National Revenue, was awarded the 2015 Golden Scissors Award by the Canadian Federation of Independent Business (CFIB) for a simple change to tax policy that will allow small businesses to file their payroll taxes less often.
Under the old policy, many mid-sized businesses had to remit payroll taxes to CRA weekly. Some of those businesses will now only have to remit those taxes twice a month, and some smaller businesses that paid twice a month will now only have to remit monthly. While the amount they have to remit won't change, thousands of small business owners will save a lot of time on paperwork.
"In Economic Action Plan 2014, our government revised the remittance thresholds for employer source deductions. That change means that over 50,000 small and medium-sized employers will see the maximum number of required payments on account of source deductions cut in half, eliminating more than 800,000 payments. That's 50,000 businesses who now have less reporting, and therefore less red tape. That's 50,000 entrepreneurs who now have more time to focus on growing their business, employing Canadians, and supporting our economy," said Minister Findlay.
In an interview with The Globe, Findlay explains what the tax policy means to small businesses in Canada.
Q: Why was it important to change the current taxroll policy?
A: In my meetings with small and medium business owners, CFIB members from across the country requested simplified reporting obligations, noting that most remittance thresholds were not current. CFIB has continued to be an active partner with me directly, and with CRA officials, guaranteeing that the changes we make are welcomed by businesses and not creating further burden. The real impact of changing the thresholds is that over 50,000 small and medium-sized employers will see the maximum number of required payments on account of source deductions cut in half. This eliminates the requirement for more than 800,000 payments.
Q: How do you plan to ensure that small business owners are aware of the change?
A: I, and other spokespeople from the CRA, have been actively speaking about this change since its announcement in Economic Action Plan 2014. Taxpayers impacted by the threshold changes were directly informed by letter from the CRA in November 2014. The CRA website has also beenupdated to highlight the changes.
Q: How long did it take for you to put this new policy in place?
Minister Flaherty announced the policy change in Economic Action Plan 2014 (Feb. 11, 2014). The threshold changes came into effect January 1, 2015.
Q: What was your reaction to finding out you were a finalist for this award, and now a winner?
A: Prime Minister Harper refers to red tape as the 'silent killer of jobs'. It is under his leadership that the Red Tape Reduction Commission was launched in 2011. The Commission's action plan has been the driver for my cabinet colleagues and I to remain focused on getting results for business. As a member of the Treasury Board, I can assure SMEs that we rigorously apply One-for-One rule across government, requiring a regulation to be removed each time a new regulation that imposes new administrative burden on business is introduced.
Our government has a low-tax plan for jobs and growth. Every time we reduce red tape, we free small business owners to focus on growing their business and creating jobs and growth in their community and in our economy. Being recognized for leadership in red tape reduction is a true honour, and I promise to use these golden scissors to keep cutting that red tape.
Q: What's your next move as Minister of Reveue with respect to small business owners?
A: Our government is committed to keeping taxes low, helping businesses and entrepreneurs succeed, and making sure that Canada remains one of the best places in the world to invest and do business. Today, the overall federal tax burden is at its lowest level in over 50 years. This is an unprecedented achievement.
I received two nominations for the Golden Scissors award this year. The second nomination was for our Liaison Officer Initiative, which has been piloted in Ontario and Quebec, and, due to the success of the pilot, has turned into an ongoing service, now available across the country. We are working to ensure small businesses are aware and utilizing this service.
Also, I have directed the CRA to consult with businesses on red tape reduction every two years to ensure that government action plans align with the priorities of small and medium businesses. We continue to take action on the recommendations SMEs provide, and support ongoing red tape reduction initiatives across all levels of government.