Mr. Chair, it is an honour to be here tonight talking about small business and the impact that small business has on our economy.
Small businesses are the backbone of the Canadian economy. They account for 99% of all businesses in Canada and employ half the working men and women in the Canadian private sector.
Our government believes that owners of small businesses should spend their time growing their business and creating jobs, not choking on high taxes and wallowing in red tape.
Today I want to give members a quick snapshot of why it is only our government that can be trusted to keep taxes low for all Canadians.
We have cut taxes significantly for small businesses and their owners. We cut the small business tax rate to 11% as of 2008, and by the way, as soon as we pass economic action plan 2015, we will be reducing it to 9%. We increased the amount of annual income eligible for this lower rate from $300,000 to $400,000 in 2007 and to $500,000 in 2009. We cut the general corporate income tax rate to 15% in 2012 from 22.12%. All of these benefits help successful small businesses when their income exceeds $500,000.
We increased the lifetime capital gains exemption on qualified small business shares to $750,000 from $500,000 in 2007. The government further increased this exemption to $800,000 in 2014 and indexed the limit to inflation, bringing it to $813,600 for 2015. The exemption is estimated to be delivering over $1 billion of tax relief annually to small business owners and owners of farms and fishing businesses. By the way, they are creating jobs with those savings.
We also reduced small business EI premiums by introducing the small business job credit. This credit is expected to save small businesses more than $550 million over 2015 and 2016. These measures will benefit hard-working small business owners all across the country.
Unlike the opposition, our government believes that the best way to create jobs is to lower taxes for job creators. That is exactly what we are doing.
Economic action plan 2015 cuts taxes even further for small businesses. To encourage small business growth, economic action plan 2015 proposes to reduce the small business tax rate to 9% by 2019. This would be the largest cut in the tax rate for small businesses in more than 25 years. It is estimated that the cut to 9% for small businesses would reduce taxes for small businesses and their owners by $2.7 billion over 2015 to 2019.
For example, a small business with a taxable income of half a million dollars would pay 46% less tax in 2019 compared to when we came into office in 2006. This means that their annual tax reduction can be reinvested in the business to fuel its growth and create jobs for even more Canadians. By the way, we have already created 1.2 million net new jobs since the depths of the recession, and that is only the beginning.
Alongside lower taxes, businesses also need access to capital. They have to have capital if they expect to develop. That is why our government is introducing changes to the Canada small business financing program. This program facilitates the extension of loans by private sector financial institutions to small businesses for the acquisition of real property and equipment and for leasehold improvements.
The program helps new businesses get started, helps established firms to make improvements and expand, and improves access to loans that would not otherwise be available to small businesses. That stimulates economic growth. That creates jobs for Canadians.
Since 2006, when our government took office, this program has provided over 50,000 loans to small businesses, with loans totalling approximately $1 billion per year.
Economic action plan 2015 proposes to amend the Canada Small Business Financing Act to make two changes: first, it will increase the maximum loan amount for real property from $500,000 to $1 million; second, it will raise the small business eligibility criterion from firms with gross annual revenues of $5 million or less to firms with gross annual revenues of $10 million and under.
In addition to reducing taxes and improving access to capital, action is also being taken to reduce the amount of red tape that is hindering the growth and success of small businesses across the country.
Any entrepreneur will say that running a small business means long hours and selfless sacrifice. Our government believes that entrepreneurs' time is best served growing their businesses, rather than being bogged down in red tape and having to pay exorbitant taxes. That is why cutting red tape is an absolute priority for us.
Since its implementation in 2012, the red tape reduction action plan has proved to be a very successful control on the growth of red tape, while maintaining high standards for safety and protection.
The one-for-one rule and other reforms have brought a new level of discipline on how the government regulates businesses. The one-for-one rule requires that when a new regulation is added, one must be removed. This measure alone has saved businesses an estimated $22 million last year alone, along with 290,000 fewer hours dealing with red tape.
Economic action plan 2015 will build on these successes to reduce the tax compliance burden faced by our businesses. That includes a new quarterly remitter category for the smallest new employers, which will reduce the frequency of remittance payments by two-thirds. Beginning in 2016, new employers will be eligible to make quarterly rather than monthly payments to the CRA if their monthly withholdings are less than $1,000 and they have maintained a perfect compliance record.
That is valuable time employers can reclaim and reinvest in both their operations and their families. Going forward, our government remains committed to continuing to provide tax relief to all Canadians, including small business owners and families.
Speaking of small business owners and their families, I think one of the most important pieces in our economic action plan 2015 is the introduction of an increase to the tax-free savings account. This is being lauded by not only business people, who recognize that this is a pool of capital that will be created for use and investment, but also by our children, who are perhaps saving for their first home purchase. It is being lauded by our seniors, our parents, who are putting a little bit by because they do not want to be terrorized by the fact that they are living longer. They want to be able to have savings for their wonderful long lives.
It is very important that we recognize that the tax-free savings account is helping all Canadians. As the minister said earlier, 60% of people who hold a tax-free savings account earn less than $60,000, and half of tax-free savings accounts are held by people who earn less than $42,000. That is a program that is helping the middle class.
I am thankful for the opportunity to speak on economic action plan 2015 and the previous elements we have completed. I have just reiterated what we are doing for small businesses because it matters so much; would the Minister of Finance speak to what our government has done to help families? I have said what we have done to help businesses. I would love to hear from him how we are helping families.