Finance Committee on Nov. 25th, 2013

[Monique Moreau]

I think we're looking for a robust, healthy economy.

[Murray Rankin, NDP, Victoria, BC]

A 2% growth, 5%—

[The Chair, Conservative, James Rajotte]

Let's just have her answer.

[Monique Moreau]

I'm not an economist, so I won't pick the number. That's typically not where CFIB lands itself. We are interested in raising the retirement income for Canadians, we just think there are options available other than doing it through a tax.

[The Chair, Conservative, James Rajotte]

Thank you.

We're going to go to Mr. Jean, please, for your round.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair, and thank you to all the witnesses who appeared today.

Small businesses are defined as those that employ 5 to 100 persons. Looking at some of the statistics for small businesses...and of course, Ms. Moreau, your organization represents 109,000 of them, but that doesn't make up all the small businesses. There are actually 1.1 million small businesses, so you represent about 10% of them. They employ 48.3% of Canada's workforce—over 5.1 million Canadians work for small businesses—and 86% of Canadian exporters were small businesses; 42% of Canada's private sector GDP is from small businesses; 28% of the country's total GDP came from businesses that employ under 50 people—I'm so excited, I can't even say “small businesses”.

Wouldn't you say that small businesses have a significant impact on our economy? It's a stunning impact.

[Monique Moreau]

Based on statistics you just read, and we have our own that are very similar, there's no question. We believe small businesses underpin the Canadian economy, essentially.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Without them, our economy would be in tatters.

[Monique Moreau]

Yes, I'd have to agree.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

What did expanding and extending the hiring credits for small businesses do to our economy? That hit 50% of Canadians, in essence.

[Monique Moreau]

It did. It allowed small business owners to receive a bit of a break during a time when the economy wasn't doing very well and they were just trying to get out of the recession. We have research that shows small business owners, in times of economic distress, are the first to hire, the last to fire. Many of our members didn't pay themselves during the recession in order to keep their employees. Giving them the EI hiring credit allowed them to keep those employees or to keep up with inflation and give small increases in their salaries, and to maintain the workforce they had.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I was even shocked to see—and I can't remember where I saw it—that the average wage for small business owners was $38,000.

[Monique Moreau]

I know there's this perception that small business owners are hiding money under the mattress and that's why they're not providing pensions for their employees or not providing wages or not hiring. As you said, many small business owners are receiving very small salaries. The margins on a small grocery store, for example, can be very low, 1% to 2%.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I think I read somewhere that just five years ago we had a record for the closing of small businesses, 109,000 as a result of the economic downturn—or something like that, I can't remember. But that would put a lot of people out of work. In fact, many people who are small business owners would not receive a salary as a result of effort and money they put into that business.

Is that fair to say?

[Monique Moreau]

I think so, yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

So in relation to the expansion and extension of the hiring credit, what else have you heard from your members?

[Monique Moreau]

Our own research shows that they've been thrilled. As I was saying earlier, it's a low cost, they didn't have to apply for it, there's no red tape associated with it. CRA does the calculation, and they receive it when they qualify. We can't think of a better way to implement a tax measure such as the hiring credit. It's very easy, and business owners don't have to worry about whether or not they need to apply for it.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

And it doesn't go to any particular large corporation. It goes to everybody, just about spread right across the economy, across every province.

[Monique Moreau]

CFIB lobbied hard for the credit, but it applies to all small business owners, whether they're members of ours or not.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Can you suggest any other innovative ways that this government can reduce debt and at the same time grow the economy by creating jobs?

[Monique Moreau]

A tax credit like the small business hiring credit is a great example. We're looking at a variety of different measures through training, reducing the deficit, and bringing public sector wages in line with the private sector. There are a number of issues we'll be hoping to present to members of Parliament as we proceed through the budget 2014 process.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Do you find that during the consultation process the department has worked very well with you, taking your suggestions and giving them due consideration?

[Monique Moreau]

We have an excellent relationship with the Department of Finance and we've been quite pleased to be working closely with them over the years.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jean.

Mr. Caron, you have the floor.