Tracey urges Minister to lower small business tax rate

Instead of honouring election promise, Minister says promise was just a sound bite

At the Standing Committee on International Trade, Tracey raised Essex small business owners' concerns with hydro bills and the high cost of doing business. She urged the Minister to follow through on the Liberals' campaign promise to lower the small business tax rate.

The Minister for Small Business' response is shocking.

Ms. Tracey Ramsey (Essex, NDP):

Thank you, Minister, for being here today with your team.

My riding is Essex, in southwestern Ontario, on the border with the U.S. I am hearing from business owners about the high cost of doing business. The hydro costs are out of control, and businesses are looking at leaving to go to the U.S. Greenhouses are heading over the border because they can't afford the hydro costs, and they're saying they are going to lose out to competition.

A reduction in the small business tax rate would be the best thing right now to help them with their overall costs, so I have to ask about that broken promise. That was something we all committed to, on all sides, during the campaign. I think it's incredibly vital, especially in Ontario, to deal with the hydro costs.

Will the 2017 federal budget include a reduction in the small business tax rate?

Hon. Bardish Chagger:

I have to take just a minute, because I've been working closely with Minister Freeland, and I'm sure, MP Ramsey, we'll be working closely with Minister Champagne as well. I'd said this to you earlier, but let me state for the record that it's really nice to see that people are fighting for the people who we need to fight for. I appreciate your constructive feedback and I appreciate your being a part of the solution.

When it comes to the consultations and communications we've had with SMEs, and I'm talking about the people who are in the pipeline, and approaching new people, they want conditions for success. They want programs and services not to be shelved, and for government to say these exist. They want to be successful in their applications so they can have the outcomes we need them to have.

The small business tax rate does not give the return we believe it does. It's a great sound bite, it's a great headline, but at the end of the day, when you talk about dollars and cents, it does not achieve it.

Ms. Tracey Ramsey:

That's not what they're telling me, though. In my riding, when I'm out there and speaking to them, it's not what they're calling and asking for. They're asking for the rate to be cut.

Hon. Bardish Chagger:

I would welcome the opportunity for us to continue to communicate together, as well as to have them communicate with my office and our team, so that we can see that success. We want that feedback. We work closely to ensure that we are creating those conditions for success. We know that government does not create the growth, but we can create the conditions for growth. We can create those opportunities.

That's partly why, and I know this is going to seem like a point.... When it comes to lowering the middle-class tax rate, it actually impacts every Canadian of the middle class. Those are our business owners, those are our customers, and so forth—

Mr. Gord Johns (Courtenay—Alberni, NDP):

Okay, but you made two promises.... I'm just going to jump in here.

Hon. Bardish Chagger:

You're welcome.

Mr. Gord Johns:

You talked about consulting businesses. The Canadian Federation of Independent Business has over 109,000 members. They rank it number one, lowering small business taxes. It was a promise made by this government. The government hasn't honoured the promise.

I knocked on the doors of over 300 businesses in my riding, with over 70 volunteers, and it was number one in my riding too. I just want you to take note of that.

Another significant cost of doing business is, of course, credit card merchant fees. It's an issue that the NDP has been raising for years. There are some clear, concrete actions the government can take to help lower these costs and make them more predictable. Of course, our colleague Madame Lapointe has Bill C-236 on this issue. I think it's been moved 10 times. Hopefully the House will eventually debate this. With CETA coming on board, we know that some of our counterparts in Europe have rates as low as a fifth of what we have here in Canada.

I'm wondering what action the government is prepared to take on credit card merchant fees.

Hon. Bardish Chagger:

This is a conversation we've been having. What's refreshing about this government is that we are taking the whole-of-government approach. When it comes to the Minister of Finance and the Department of Finance, we are communicating with them and engaging with them on a regular basis. When the 22 departments that are directly related, I would say, to SMEs come together on a regular basis, and we're talking about a weekly meeting, they are able to raise these issues.

We consult with many groups. I've met with the CFIB. I've met with chambers of commerce. I've met with these groups to ensure that their stakeholder voices are being represented. We also continue to engage with them.

As you yourself know, instead of calling you a critic I call you an ambassador, because at the end of the day, we want the same outcomes and we want to see that success. When it comes to CETA, the opportunities that SMEs will see in export markets with this deal will be immeasurable, I would say. We know that CETA will open up markets unlike any other.

I will tell you that when we know that only 12% of SMEs are considering exporting right now, we need to encourage more SMEs, if they want to, to consider export markets.

Mr. Gord Johns:

If that's the case, we need to make sure that everybody is on an even playing field. If they are getting lower merchant fees, we're not on the same playing field.

I also want to make sure you understand that when we talk about small business taxes, and you talked about the middle-class tax break, there is no better way to have community economic development than by putting dollars into the hands of small business owners. Some of the rhetoric we've heard from government—

The Chair:

Sorry, Mr. Johns, I don't want to cut you off, but your time is up.