Canada's deficit addiction: Three in four small businesses are worried about the lack of plan to achieve a balanced federal budget

TORONTO, Oct. 30, 2024 /CNW/ - Nearly three in four (74%) small businesses are worried about the lack of a plan to return to a balanced federal budget as Canada continues running deficits and racking up federal debt, says the Canadian Federation of Independent Business (CFIB).

The federal debt has nearly doubled in the last 10 years, rising from $602.4 billion in 2012/2013 to $1,173 billion in the 2022/2023 fiscal year.

"The federal government must introduce a timeline to balance the budget. Our economy and our entrepreneurs cannot sustain this level of debt forever. Too much money is spent to manage our debt. That's money that could instead be used to reduce taxes and the cost of doing business," said Jasmin Guenette, Vice-President of National Affairs at CFIB. "Ottawa needs to stop acting as if it has money to burn and, instead, work to avoid driving up the national debt."

All the money to be collected from the goods and services tax (GST) across Canada barely covers the $54 billion in annual interest payments on the country's national debt. It is the equivalent of the total combined provincial budgets of Manitoba, Saskatchewan and Newfoundland and Labrador in 2024/2025.

Looking ahead, Canada's debt charges are projected to further rise to $64.3 billion in 2028-29 due to higher borrowing requirements and interest rates. The money that will be spent on debt charges in 2028/2029 is the equivalent of what could have been used to eliminate the GST, energy taxes, custom import duties and excise taxes combined in the 2022/2023 fiscal year.

"Increasing taxes is not a sustainable solution," added Guenette. "It's well beyond time for the government to get its fiscal house in order." CFIB recommends the federal government:

• Implement a clear path to balancing the budget with specific indicators to measure progress.
• Commit to a fiscal anchor that will actually reduce the deficit and debt.
• Implement legislated spending limits for the government outside of a global crisis.
• Commit to undertaking meaningful internal reviews to reduce the size and cost of the federal public service.
• Freeze the operating budget of all departments at their current levels.
• Avoid introducing new or expanding social programs (e.g., dental care, pharmacare etc.).
• Sell government assets (e.g. Crown corporations, land, buildings) where it makes sense.

"Entrepreneurs know that today's deficits result in tomorrow's new or higher taxes. Recurring deficits deter future entrepreneurs from entering the market and current ones from making the investments to grow their businesses. Canada must curb its spending tendency and implement solid fiscal anchors to help keep spending in check. The upcoming Fall Economic Statement and 2025 Budget is a great opportunity to start," said Juliette Nicolaÿ, CFIB's policy analyst and co-author of the analysis.

Read the full report here.

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.

SOURCE Canadian Federation of Independent Business

For media enquiries or interviews, please contact: Dariya Baiguzhiyeva, CFIB, 647-464-2814, [email protected]