Driven by United Nations and made official last year by the National Assembly of QuebecMicro, Small and Medium Enterprises Day aims to raise awareness of their essential role.
Today, I say THANK YOU to the people who have dared to be an entrepreneur!
To dare to undertake is to have the courage to face uncertainty to do what you love. It means passing on your knowledge and skills to those around you and to your community. It means contributing to the economy of today and tomorrow, in particular through job creation and private investment in the regions.
Small businesses alone generate two-thirds of jobs in the private sector and contribute nearly one-third of Quebec’s GDP. The heart of our economy is low to the rhythm of its SMEs.
The last two pandemic years have been tough and have generated a level of debt exceeding $100,000 on average for SMEs. Even today, small businesses are struggling to regain their pre-pandemic cruising speed.
While the pandemic seems behind us, our SMEs must face two major challenges: labor shortages and inflation.
The glaring lack of employees is a nightmare for the majority of business owners: overtime, closed businesses, lost contracts, expansion plans on the ice and diminished production capacity.
In the meantime, the bills keep coming in and are getting harder and harder to absorb. Inflation negatively affects 85% of SMEs and particularly the smallest companies, because economies of scale are weak or non-existent.
On the eve of the provincial elections, we present our recommendations to contribute to the success of Quebec SMEs.
We have to talk about taxation, because it is not by having the heaviest taxation in the country for SMEs that we will help them to prosper. Quebec is the province with the highest payroll taxes in Canada. They are 31.7% higher than in Ontario. We are also unique in not offering the reduced tax rate for smaller businesses in the service and construction sectors. The result is a 259% higher tax rate for these. We highlight the successive declines in the SME rate in recent years. We have to continue, because there are eight Canadian provinces that offer a lower rate to their SMEs.
Giving tax relief would allow SMEs to raise wages and invest in automation.
We must also mention the administrative and regulatory burden, the cost of which amounts to $8.2 billion in Quebec! To reduce inflationary costs and address worker shortages, contractors are working longer hours. The paperwork is therefore heavier than before. This is therefore a project to be accelerated which is at no cost to the government.
Other measures can propel our SMEs, such as buying local, entrepreneurial succession and post-pandemic recovery. These are levers to pave the way for the success of SMEs: a guarantee of success for Quebec.
Francois Vincent
Vice President for Quebec
Canadian Federation of Independent Business (CFIB)