Senator Martin: In addition to higher costs caused by inflation and higher interest rates, the government will hurt small businesses by increasing energy costs and payroll taxes. It seems the government is either deaf to the demands of the business community or has no interest in helping small businesses.

Leader, why won’t the government cancel its planned hikes of carbon and payroll taxes that will hurt small businesses?

Hon. Yonah Martin (Deputy Leader of the Opposition): My question is for the Government Leader in the Senate.

Last week, the Senate Banking Committee heard from Kevin Page, the former Parliamentary Budget Officer, who told the committee that an expected winter recession will hurt small businesses significantly. In fact, the combination of three factors will hurt small businesses, the backbone of the Canadian economy: a recession, high interest rates and inflation. Those mean higher costs for businesses and less money for consumers.

Mr. Page confirmed this, saying:

. . . That will hurt small businesses significantly because, with these higher interest rates, people will not want to use credit to go out and spend.

This recession will be caused by high interest rates, which are the direct result of the reckless spending by the Liberals. Leader, what is the government’s plan to help small businesses that will suffer in 2023?

Senator Martin: Yes, but on a week we should be celebrating small businesses, the Bank of Canada has announced the worst drop in business outlook since 2020. Many businesses expect slower sales growth as interest rates rise and demand slows. Many think a recession is likely within the year, and fewer businesses are planning to hire. With the central bank’s indicators falling, if the government is still determined to heap more taxes on small businesses, will they at least consider providing some relief by delaying these hikes until the economy improves?

Hon. Yonah Martin (Deputy Leader of the Opposition): Government leader, this week is Small Business Week. Small‑business owners are the grease in the Canadian economy. They employ nearly two thirds of the Canadian workforce. They are moms and dads. They are friends and neighbours. They love their communities and give back every day, yet this government continues to punish them with higher payroll and carbon taxes, leaving them with higher costs for families that rely on that business for a paycheque.

Will the government commit to reviewing their planned tax hikes on small-business owners?

Senator Martin: More than half of Canada’s businesses, 55.3%, have fewer than four employees. Many are family-owned and -operated. While these families struggle to keep their doors open, they are also dealing with rising costs due to inflation and tax increases. Now they must wait for a year on average to have their CRA small business audits completed. This is causing unnecessary stress for owners of small businesses across Canada. If resources are a problem at the agency, what plans does the government have to address this?

So this is a really dire issue, senator.

Hon. Yonah Martin (Deputy Leader of the Opposition): Government leader, 99.8% of businesses are small- and medium-sized businesses, or SMEs. SMEs drive Canada’s economy by employing 88.3% of Canada’s private labour force and accounting for more than half of the nation’s GDP.

Healthy SMEs are vital in any post-pandemic recovery plan, yet at this critical time, the Canada Revenue Agency is putting undue stress on businesses by taking almost a year on average to complete audits.

What is the government doing to address the delays at the CRA?

Hon. Yonah Martin (Deputy Leader of the Opposition): Honourable senators, my question is also for the government leader.

Among the promises the Liberal government made to small businesses during the 2019 federal election campaign was a commitment to cut the cost of federal incorporation by 75%, from $200 to $50. This is a relatively small promise for a federal government to make, but it matters to entrepreneurs as every dollar counts when starting a new venture.

A recent answer to a written question on the Senate Order Paper states the government “continues to assess the impact of reducing the fee.”

Instead of saying when this fee will be cut, the answer notes that annual incorporations have increased by over 100% within the past five years.

Leader, this sounds very much as though the NDP-Liberal government has chosen to abandon this promise made by the Prime Minister to small businesses. Why?