Federal Budget Highlights
Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released the Federal Budget 2023. Included in the budget highlights were the following items that will directly affect the small business sector in Toronto.
Lowering Credit Card Fees for Small Businesses
As a follow-up from the 2022 Budget, in Budget 2023 the government is announcing that they have reached an agreement with Visa and MasterCard to lower credit card fees up to 27%. This reduction will help small businesses save $1 billion over the next 5 years. We will monitor the details once these are released.
- The government’s expectation is that the commitments by credit card networks to lower interchange fees for small businesses will not adversely impact interchange fees paid by other businesses.
- The government also expects other credit card companies to take similar actions to lower fees for small businesses, and that payment processors will pass these reductions through to small businesses. To achieve this, the government will be engaging with networks, acquirers, and payment service providers.
Freezing the Excise Tax on Beer, Wine, and Alcohol
To help businesses and breweries facing high inflation, the government is Freezing the Excise Tax on Beer, Wine and Alcohol. The excise duty will be kept at the 2 per cent increase and not the planned 6 per cent previously announced.
- Under the Excise Act and the Excise Act, 2001, alcohol excise duties are automatically indexed to total Consumer Price Index (CPI) inflation at the beginning of each fiscal year (i.e., on April 1st).
- Budget 2023 proposes to temporarily cap the inflation adjustment for excise duties on beer, spirits, and wine at two per cent, for one year only, as of April 1, 2023. The excise duty rates on all alcoholic beverage products as of April 1, 2023, are presented in the table below.
- The proposed measure would come into force on April 1, 2023
Included in Budget 2023 is support for Canada’s Tourism Sector with a $108 million investment to support communities and small businesses.
- The budget includes mention of a new Federal Tourism Growth Strategy to chart a course for growth, investment, and stability in Canada’s tourism sector.
- The government proposes to provide $108 million over 3 years, on a cash basis, starting in 2023-24, to the Regional Development Agencies to support communities, small businesses, and non-profit organizations in developing local projects and events.
- It also proposes to provide $50 million over 3 years, on a cash basis, starting in 2023-24, to Destination Canada to attract major international conventions, conferences, and events to Canada.
Conferences and Events
$50M fund over 3 years to attract major international conferences and events.
Budget 2023 proposes to expand eligibility for the Electronic Travel Authorization Program to low-risk, trusted travellers from additional visa- required countries—a service which is currently available only in Brazil.
- This will help make Canada a more attractive destination for trusted travellers, while allowing the government to focus resources where it matters most, such as on screening higher-risk travellers. The cost of this measure is $50.8 million over four years in forgone revenue. Details on eligible countries will be announced in the coming weeks.
- The government will complete a study on all “junk fees” which includes the likes to luggage charges.
The government continues to make changes towards more effective immigration changes.
- Temporary Foreign Worker Program ( TPF) – The budget allocated $48 million in improving the Temporary Foreign Worker Program Employer Compliance Regime. Another $10 million is budgeted in the coming years to drive compliance of worker standards and protection. The program will be extended to Oct 30th 2023 for hardest-hit sectors such as tourism and hospitality. This means that LMIAs continue to be valid for 18 months and the #hotel sector can keep hiring up to 30% of its workforce through the TFW program.
- A new immigration pathway for refugees & displaced workers
- This summer, refugees and other displaced people can use the EMPP to connect with in-demand job openings. A step in the right direction to addressing the workforce shortage.
- The Government is expanding the Economic Mobility Pathways Program (EMPP) pilot with a new pathway for #tourism and #hospitality workers.