Supporting Small Business and Fostering Entrepreneurship


  • Small businesses make up over 90% of Canadian businesses and employ two-thirds of all Canadians.


  • They are the foundation of our economy and are an essential element of our communities.


  • We want them to succeed, which is why, since we formed government, we have reduced the small business tax load by almost 50%.


  • This unprecedented tax relief will help create jobs and economic growth in communities across Canada.


  • Economic Action Plan 2015 delivers on these commitments by providing record tax relief and support to small businesses and Canadian entrepreneurs, through measures such as:


  • Reducing the Small Business Tax Rate from 11 percent to 9 percent by 2019, which will allow small businesses to retain more earnings that can be used to reinvest and create jobs.


  • Reaffirming the Small Business Job Credit, a credit that will lower small businesses payroll taxes by 15 per cent for the next two years.


  • Improving Access to Financing for Canadian Small Businesses under the Canada Small Business Financing Program, which has provided over 50,000 loans since 2006, which will help new businesses get started and help established firms expand.


  • Expanding the Services of the Business Development Bank of Canada and Export Development Canada to help small- and medium-sized enterprises.


  • Reducing Red Tape for Small Business Owners in order to make doing business easier and more efficient.


  • Increasing Access to Venture Capital Financing to help innovative, high-growth companies grow and create jobs.


  • Supporting Young Entrepreneurs with an investment of $14 million over 2 years for Futurpreneur Canada.


  • Supporting the Action Plan for Women Entrepreneurs to help women business owners succeed through mentorship and increased access to credit and international markets.


  • These actions build upon our Government strong record of support for small businesses, which includes:


  • Supporting Internships in Small Business, by investing $15 million for up to 1,000 post-secondary graduates to intern in small- and medium-sized businesses across Canada.


  • Maintaining the freeze on Employment Insurance (EI) premiums in order to provide certainty and flexibility for small businesses in the years ahead.


  • Cutting the Red Tape Burden by eliminating over 800,000 payroll deduction remittances to Canada Revenue Agency made every year by over 50,000 small businesses.


  • Promoting Fairness in the Credit Card Market, by committing to work with groups to help lower credit card acceptance costs for small businesses and to further improve business practices.


  • Reducing the small business tax rate from 12 percent to 11 percent.


  • Increasing the ‘small business limit’ to $500,000.


  • Lowering the federal corporate income tax rate to 15 percent to help create jobs and economic growth for Canadian families and communities.


  • Eliminating the corporate surtax for all corporations in 2008, which was particularly beneficial to small business corporations as the surtax represented a larger proportion of their overall payable tax.


  • Increasing the Lifetime Capital Gains Exemption to $800,000 from $750,000 and indexing it going forward. This positive measure will increase the rewards of investing in small business, by making it easier for owners to transfer their family businesses to the next generation of Canadians.


  • Providing $49 million to the Canadian Youth Business Foundation to help young entrepreneurs grow their firms.


  • Launching the Venture Capital Action Plan to increase private sector investments in early-stage risk capital and to support the creation of large-scale venture capital funds.


  • Standing up for the automotive sector by investing $500 million in the Automotive Innovation Fund to support significant new projects in Canada


  • Investing $65 million for the permanent Build in Canada Innovation Program (BCIP), which helps companies commercialize their technologies through testing and providing feedback on performance.


Example: corporate income tax reductions for small businesses
Chart 3.2.1
Federal Corporate Income Tax Paid by a Small Canadian-Controlled Private Corporation With $500,000 of Taxable Income

Chart 3.2.1 - For details, see the previous paragraph.