Minister Duclos highlights government's significant new support to help small business

QUÉBEC, Oct. 4, 2024 /CNW/ - Canada's small- and medium-sized businesses keep main streets flourishing across the country, create good-paying jobs, and deliver the dream of entrepreneurship. It is essential that these businesses thrive so they can continue being the bedrock of our communities and our economy.

Today in Québec City, the Honourable Jean-Yves Duclos, Minister of Public Services and Procurement and Quebec Lieutenant, met with LumIR Lasers to highlight the federal government's new support to help small- and medium-sized businesses start-up, grow, and thrive.

To this end, Canada Economic Development for Quebec Regions (CED) will award $1 million via the Regional Economic Growth through Innovation program in the form of a repayable contribution. The project aims to increase the production capacity, productivity and ability to seize new business opportunities of a young, growing technology company in the quantum sector. The main activity of the project, to be carried out by LumIR Lasers, is to set up its first manufacturing plant for fluoride glass fiber lasers, which can be used as components for medical (for example, aesthetics and dentistry) and industrial applications. CED's contribution will cover the acquisition of specialized equipment and leasehold improvements to production space.

First, the federal government announced the payment amounts for the new Canada Carbon Rebate for Small Businesses, which will deliver over $2.5 billion to about 600,000 Canadian businesses before the end of this year. This refundable tax credit will return a portion of the fuel charge proceeds from 2019-20 through 2023-24 to small businesses, in jurisdictions where the federal fuel charge applies.

Second, the federal government announced a revised Code of Conduct for the Payment Card Industry in Canada to protect over 1 million businesses that accept credit card and debit card payments from customers. Starting on October 30, 2024, the revised Code will help businesses compare prices and offers from different payment processors, and shorten the complaint handling response time by nearly 80 per cent to just 20 business days. All major payment card network operators in Canada have agreed to the terms of the revised Code. Certain obligations requiring complex or technical system changes will come into effect by April 30, 2025.

Third, the federal government announced that new, reduced credit card transaction fees for small businesses will take effect on October 19, 2024. More than 90 per cent of small- and medium-sized businesses that accept credit cards will receive lower rates and see interchange fees reduced by up to 27 per cent. These fee reductions are expected to save eligible small businesses about $1 billion over five years. Reduced credit card transaction fees will save small businesses thousands of dollars every year. For example, if a store processes $300,000 in credit card payments, they currently pay nearly $4,000 in annual fees. With these new agreements, the store could save $1,080 in fees every year.

The Government of Canada is taking action to help businesses start-up, grow, and thrive by reducing the costs of running a business. These new supports for business owners build on our government's lowering of the small business tax rate to 9 per cent—which saves small businesses $6 billion every single year. In Budget 2022, our government lowered small business taxes further by making the 9 per cent federal small business tax rate available to more businesses as they grow, which is saving businesses another $660 million in taxes over 2022-23 to 2026-27.

Quotes

"Small and medium sized businesses are an integral part of communities in Québec and across the country. The federal government is making life easier for locally owned businesses by introducing reduced credit card transaction fees and delivering the Canada Carbon Rebate for small businesses. The federal government understands the importance of investing and protecting good paying jobs in Québec and in Canada."

The Honourable Jean-Yves Duclos
Minister of Public Services and Procurement and Quebec Lieutenant

"With this support from Canada Economic Development, LumIR Lasers will be able to acquire equipment and infrastructure that will multiply its production and innovation capabilities. We are very grateful to the Canadian government and to Minister Duclos for supporting our growth as an exporter and our mission to improve laser healthcare.

Louis-Philippe Pleau
Director of LumIR Lasers

Quick facts

• The Canada Carbon Rebate for Small Businesses is a refundable tax credit to return a portion of federal fuel charge proceeds directly to eligible businesses.
  • Businesses will not have to apply for this rebate. The Canada Revenue Agency will determine and automatically issue the rebate amounts to eligible businesses based on the payment rates of each applicable province for the corresponding fuel charge years, as specified by the Minister of Finance.
  • The rebate will be available to eligible Canadian-controlled private corporations that had 499 or fewer employees in Canada throughout the calendar year in which the applicable fuel charge year began.
• The Code of Conduct for the Payment Card Industry in Canada was first released in 2010 and was last updated in 2015.
  • All major payment card network operators in Canada incorporate the Code into their rules, making it binding on all their network participants: issuers, acquirers, and payment processors.
  • More than 1 million businesses that accept payment cards in Canada will benefit from the Code revisions. In 2023, these businesses accepted approximately 14.1 billion card payments worth $1.2 trillion.
• Businesses pay fees to process credit card transactions, with the largest component being the interchange fee paid to credit card-issuing financial institutions, such as banks. The federal government has finalized agreements to lower these fees for small businesses starting on October 19, 2024.
  • Visa and Mastercard have agreed to:
    • Reduce domestic consumer credit interchange fees for in-store transactions to an annual weighted average interchange rate of 0.95 per cent;
    • Reduce domestic consumer credit interchange fees for online transactions by 10 basis points, resulting in reductions of up to 7 per cent; and,
    • Provide free access to online fraud and cybersecurity resources to help small businesses grow their online sales while preventing fraud and chargebacks.
  • Small businesses will qualify with each credit card network individually.
    • Small businesses with annual Visa sales volume below $300,000 will qualify for the lower interchange fees from Visa, and those with annual Mastercard sales volume below $175,000 will qualify for the lower fees from Mastercard.
    • Non-profit organizations with transaction volumes below these thresholds will also benefit from reduced rates.

Related Product

• Revised Code of Conduct for the Payment Card Industry in Canada

Associated Link

• Budget 2024: Fairness for Every Generation

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SOURCE Public Services and Procurement Canada

Contacts: Guillaume Bertrand, Acting Director of Communications, Office of the Honourable Jean-Yves Duclos, 418-564-9571, [email protected]; Media Relations, Public Services and Procurement Canada, 819-420-5501, [email protected]