What does last week’s federal budget mean to your small business? Here’s the skinny in case digesting a 500-page budget document isn’t your idea of a good time. Yes, I do find such things enjoyable.
If you have employees, there are a couple of important things to know about employment insurance (EI). First, the EI hiring tax credit has been extended for a year.
This means that increases in payroll in 2012 – new hires or giving existing employees a raise – over 2011 payroll are eligible for a tax credit of up to $1,000.
This applies to firms with less than a $10,000 EI bill a year. It will save 536,000 employers $205 million.
Another important change is designed to bring more stability and predictability to annual EI increases. Increases will be capped at five cents for employees and seven cents for employers.
Turning to Canada Revenue Agency, as of April 16 of this year, businesses will be able to submit questions and get answers in writing using CRA’s My Business Account.
This is welcome news for business owners who report getting more than one different answer to the same question posed to different CRA agents over the phone. Having advice in writing from government agencies is always a best practice in case of an audit, but until now it was difficult to get advice in writing from CRA.
In other good news from CRA, more businesses will qualify for the simplified method of calculating the GST/HST.
Eliminating red tape was a theme throughout the budget and the commitment to institute a one-rule-out-for-every-new-one introduced was repeated.
The budget also commits to improve the review process for major natural-resource projects to eliminate unnecessary delays using a “one project, one review” approach and defined time periods for approvals.
Small businesses benefit from getting rid of red tape on major projects as the projects create demand for goods and services such as restaurant meals, legal contracts, transportation, hotel rooms, computer servicing contracts and haircuts.
Other notable changes include moving toward having federal civil servants pay 50 per cent of their pension costs, up from less than 40 per cent, and changing the expected retirement age to 65 for new hires in the federal public service starting next year.
In some areas the federal budget disappointed.
Fiscal restraint remains a fantasy in Ottawa, as overall spending continues to rise. Still, there are specific items in this budget for small business owners to smile about.
~ Laura Jones is the Sr. Vice-President Research, Economics & Western Canada with the Canadian Federation of Independent Business