CFIB releases second Small Business Provincial Tax Index
CHARLOTTETOWN — Prince Edward Island ranks in the middle of the pack when it comes to small business-friendly tax systems, but there are significant areas for improvement, according to an updated report by the Canadian Federation of Independent Business (CFIB).
“When we talk to small business owners, the number one concern facing their business is the total burden of taxes they face,” said Erin McGrath-Gaudet, CFIB’s director of provincial affairs for P.E.I. “Some taxation is necessary to fund important government programs and infrastructure, but we also need our tax system to allow room for businesses to compete and grow.”
CFIB’s 2013 Small Business Provincial Tax Index examines elements of provincial tax systems from the perspective of small-and medium-sized business owners. The 2013 index encompasses 53 indicators in five major areas of the tax system—premiums and payroll tax; sales and excise tax; corporate income tax; personal income tax; and property tax.
P.E.I. ranks well in both payroll taxes and property taxes since the province does not levy a payroll tax and property taxes are low relative to many other jurisdictions.
When it comes to personal income tax, however, the province ranks second worst in the country.
“Islanders pay high personal income tax rates, and we start paying at a lower level of income than other Canadians. This is only getting worse because, unlike most provinces, our basic personal amount and income tax brackets aren’t increased with inflation every year,” said McGrath-Gaudet. “This means a hidden tax hike every year.”
Corporate income taxes are also a concern with P.E.I. scoring in the bottom three. This score will drop further given the province’s small business tax rate increase took place mid-year, and so was prorated in this edition of the report.
The national rankings placed Alberta, Saskatchewan and New Brunswick in the top three spots while Ontario, Nova Scotia, and Quebec were in the bottom three positions.
To view the full report, “Ranking Provincial Tax Systems in Canada: CFIB’s 2013 Small Business Provincial Tax Index,” please visit www.cfib.ca