Question Period Note: SME SUPPORT DURING ECONOMIC RECOVERY

What is the Government of Canada doing to support small and medium-sized businesses during economic recovery?

• Small businesses are the backbone of the Canadian economy and the heart of communities across the country.

• The Government of Canada is focused on supporting jobs and small businesses, ensuring Canada makes a rapid and strong recovery.

• Budget 2022 includes measures to build more resilient supply chains, cut taxes for Canada’s small businesses, and drive the creation and ensure the protection of Canadian intellectual property.

• The Canadian Digital Adoption Program is helping Canadian small businesses be more competitive by growing online and boosting their business technologies.

As COVID-19 support measures wind down, Budget 2022 makes targeted investments that will drive small business productivity and growth to help support Canada’s economic recovery and job creation. Measures include steps to build more resilient supply chains, cut taxes for Canada’s growing small businesses, supporting emission-intensive and trade-exposed small and medium-sized enterprises, promoting diversity, enhancing cybersecurity, and ensuring the protection of Canadian intellectual property.

Budget 2022 Measures to Support Small and Medium-Sized Enterprises (SMEs) Growth and Innovation:

Cutting Taxes for Canada’s Growing Small Businesses
Budget 2022 proposes to gradually phase out access to the small business tax rate, with access to be fully phased out when taxable capital reaches $50 million, rather than at $15 million. This would allow more medium-sized businesses to benefit from the reduced rate, increase the amount of income that can be eligible for the reduced rate, and deliver an estimated $660 million in tax savings over the 2022-2023 to 2026-2027 period that can be reinvested towards growing and creating jobs.

Returning Fuel Charge Proceeds to Small and Medium-Sized Enterprises
Budget 2022 proposes to provide up to $30 million over two years, starting in 2022-23, to Environment and Climate Change Canada to administer direct payments to support emission-intensive, trade-exposed small and medium-sized enterprises in those jurisdictions.

Strengthening Canada’s Trade Remedy
Budget 2022 proposes to provide $4.7 million over five years, starting in 2022-23, and $1.1 million ongoing, to the Canada Border Services Agency to create a Trade Remedy Counselling Unit that will assist companies, with a focus on small and medium-sized enterprises.

Budget 2022 Sector-Specific Support Measures for SMEs:

Supporting Canada’s Performing Arts and Heritage Sectors
Budget 2022 proposes to provide an additional $50 million in 2022-23 to the Department of Canadian Heritage, the Canada Council for the Arts, and Telefilm Canada to compensate Canadian arts, culture, and heritage organizations for revenue losses due to public health restrictions and capacity limits.

Growing Canada’s Health-Focused Small and Medium-Sized Businesses
Budget 2022 proposes to provide $30 million over four years, starting in 2022-23, to build upon the success of the CAN Health Network, and expand it nationally to Quebec, the territories, and Indigenous communities.

Support for Canada’s Tourism Sector
Budget 2022 proposes to provide $20 million over two years, starting in 2022-23, in support of a new Indigenous Tourism Fund to help the Indigenous tourism industry recover from the pandemic and position itself for long-term, sustainable growth.

Budget 2022 also proposes to provide $4.8 million over two years, starting in 2022-23, to the Indigenous Tourism Association of Canada to support its operations, which continue to help the Indigenous tourism industry rebuild and recover from the pandemic.

Previously Announced Measures to Support SMEs:

Reducing Credit Card Transaction Fees
Payment card transaction fees can increase the cost of doing business for small businesses. As announced in Budget 2021, the government is committed to lowering the cost of credit card fees in a way that benefits small businesses and protects existing reward points for consumers. To this end, the government will continue current consultations with stakeholders on solutions to lower the cost of fees for merchants.

Canada Digital Adoption Program (CDAP)
In Budget 2021, the government announced $4 billion for CDAP, which launched in March 2022 to help businesses move online, boost their e-commerce presence, and digitalize their businesses. CDAP consists of two streams of support for businesses: Stream 1, Grow Your Business Online; and, Stream 2, Boost Your Business Tech. Stream 1 will help SMEs take advantage of e-commerce opportunities; eligible businesses will receive micro-grants to help with the costs related to adopting digital technologies as well as support and advice from a network of youth digital advisors. Stream 2 will help businesses with the development and implementation of digital adoption strategies.

Canada Small Business Financing Program
Budget 2021 announced that the government will be enhancing the Canada Small Business Financing Program, increasing annual financing to small businesses by an estimated $560 million.

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