Thank you so much, Chair. It's nice to see all the committee members on the screen today. I'm sorry that I'm not there with you in Ottawa, but I'm happy to be in Toronto today.
Look, I don't need to remind you of the crazy year that Canada's small and medium-sized businesses have been through, and the crazy couple of years over the course of the pandemic. However, I think I need to share with you just how critical things are right now.
Many think the pandemic is very much in the rear-view mirror for small business owners as the economy has bounced back. That's not what we're hearing from our small and medium-sized firms—the 95,000 members that are part of the Canadian Federation of Independent Business. In fact, only 42% of small businesses tell us that their sales are back to normal levels. Under 50% of Canada's small business owners are still under water with respect to their sales levels and they haven't seen those materialize.
Almost two-thirds, 64%, are facing pandemic-related debt. Of our members, 40% haven't repaid any of the debt they have taken on during the course of the pandemic. While pandemic support programs, particularly those from the federal government, were immensely helpful to many small businesses, our data shows that only about a third of the pandemic's negative financial repercussions were covered by support programs. Two-thirds are still on the books of business owners right now.
We have, right now, major labour shortages and cost increases on almost every line of the budget postpandemic. These are really, really challenging times for small and medium-sized firms. Added to that is the risk of a nasty recession in the next few months. All of this is not incenting business owners to expand or to get anywhere close to back to normal.
What should the government do though? How can the finance committee and the federal government help?
For one thing, our main request is not to make it worse. Unfortunately, there are several plans on the part of the federal government to do exactly that—to make a bad problem much, much worse for small and medium-sized companies. We don't have to look that far. In just a couple of months, on January 1, we're going to see a significant increase in Canada pension plan premiums, with hundreds of dollars taken out of every Canadian's paycheque and out of the payroll budgets of every Canadian employer. EI rates are now set to rise again on January 1 after a helpful two-year freeze. Of course, we have a whole host of other issues on the regulatory front that are making challenging times that much worse.
One of the things that may surprise you is that health care has emerged as the number two priority for small and medium-sized firms. It was number 15 only a few short years ago. Health care capacity is a huge priority for small and medium-sized firms across the country. We're just beginning to grapple with what that looks like.
I want to spend a few minutes on some of our key recommendations. I want to talk about the CEBA loan program. This was a program that was immensely helpful. Nearly 900,000 businesses across Canada took out a CEBA loan. You should know that just in the last couple of weeks—and I think the chamber noted this in their testimony a second ago—50,000 small and medium-sized firms have had their CEBA loan recalled by the bank. Basically they are losing the forgivable portion as they've been reconsidered and are now deemed ineligible.
Members of Parliament are going to start, if you haven't started already, to hear from tons of business owners who are losing the CEBA loan and who are now going to be forced to lose the $10,000 forgivable portion, for most who took out the $40,000 flavour. We're urging government to actually consider forgiving a larger chunk of the CEBA loan. We're suggesting that 50% should be forgiven by the federal government at this time. We think that would remove more debt from the backs of small business owners. That certainly would be helpful in ensuring that more of them survive.
On the payroll tax front, we're urging the Deputy Prime Minister to go to the provincial governments and ask if we can pause the CPP increase that is set to go into effect or, at the very least, overturn the recent decision on the part of the feds to increase the EI rate that is set to go up.
If you're not prepared to do any of that, I urge you to consider something that the Tories and the Liberals mutually put in place around the change in government. The Conservatives put forward a small business job credit that effectively lowered the rate of EI for small employers down to 1.2% of that which was paid by employees. That was then delivered by the Liberal government when it first took power, and we're urging you to reconsider the small business job credit as a means of reducing the payroll tax burden on small firms.
We need progress on credit card merchant fees. An outstanding commitment the Liberals promised small business owners in the 2019 campaign was that they would have a further reduction in credit card processing fees. That has not been delivered. The government promised it again in the 2021 budget, but it has not been delivered. In the 2022 budget, it has not been delivered. We're hoping that there may be some signs of that either in the fall economic statement or in the months ahead. We are urging you to make progress on this front.
We also support the chamber's suggestion a moment ago on making more permanent the phase-out of the accelerated capital cost allowance. That measure was very helpful, and I think that sends the right messages.
There are many other ideas on our plate on carbon taxation, small business deductions and thresholds, but I'll keep my testimony to that.