Small firms irked at big budget letdown

Manitoba small businesses were given little thought in the 2026 federal budget, local sector groups say.

“The government once again focused on mega projects and big business while overlooking the small businesses that are the backbone of Manitoba,” said Brianna Solberg, Canadian Federation of Independent Business director of legislative affairs for the Prairies.

She accused Ottawa of “building expectations,” only to let small businesses down.

On Monday, Finance Minister François-Philippe Champagne hinted at changing taxes to improve operations for small- and medium-sized firms during an event in Toronto.

The budget arrived Thursday without a small-business tax rate reduction or an increase to the small-business deduction threshold.

The threshold is outdated, Solberg said Friday.

The budget also hasn’t fixed “gaps” in federal tariff support measures, she added. Regional tariff response programs require businesses to have $1 million in annual revenue.

More than a third of Manitoba CFIB members — 36 per cent — reported being highly affected by Canadian counter-tariffs in an October survey. Twenty per cent said the same about United States tariffs.

The CFIB counts more than 5,800 Manitoba members.

Companies face economic uncertainty amid trade disputes and war overseas. Operating costs have jumped for many, Solberg said. “It’s a really difficult time to be a small business.”

The Winnipeg Chamber of Commerce also noted a lack of change in the small-business tax rate and threshold. Chamber president Loren Remillard called for a comprehensive review of Canada’s tax system.

“If you want companies to grow, you need to give them the means to be able to do that,” Remillard said, adding firms paying less tax have more money to expand.

Attracting talent to Canada can be hard because of the personal income tax system, Remillard said. Still, his initial take on the budget is “overall positive.”

Manitoba manufacturers and aerospace companies could benefit from the productivity mega deduction, which was first announced in September, said Elisabeth Saftiuk, acting president of the Manitoba Chambers of Commerce.

The measure lowers the effective tax rate on new business investment to 6.4 per cent from 13 per cent.

“We are encouraged to see the federal government place such a strong emphasis on private-sector investment, productivity and strengthening Canada’s economic competitiveness,” Saftiuk said. “I think the biggest outstanding question is how effectively these commitments will be implemented.”

For example, time will tell how fast major projects advance, Saftiuk said.

Proposed immigration changes should benefit Manitoba companies, according to the Business Council of Manitoba’s president.

“(It) looks like they’re doing a reset, so that’s a good thing,” Bram Strain said.

Up to 200,000 temporary residents in Canada could become permanent by the end of 2027, the budget says.

It vows to reform the Temporary Foreign Worker Program “to better align with regional labour market needs,” including by collaborating with provinces.

This could mean funnelling more people through Manitoba’s provincial nominee program, Strain said. The economy-driven path leads to permanent residency.

“This is exactly what we were pushing for,” said Strain, who trekked to Ottawa in September with peers from Saskatchewan, Alberta and British Columbia.

He applauded a new tax exemption: some investments in Canadian companies will be exempt of up to $15 million in capital gains. Small-business rollover will also be enhanced.

The initiative, called the Canada Growth Incentive, is “somewhat promising,” but appears to exclude many small businesses, Solberg said. The CFIB will lobby Ottawa to include more sectors, such as farms and hotels, she added.

Manitoba startups may benefit from the expansion of scientific research and experimental development tax incentives, said Matt Schaubroeck, founder of Leverage Point Consulting.

“It is so easy for startups to access funding for (research and development),” said Schaubroeck, who sold his company IoAirFlow in 2022 and now advises small businesses.

“Once they come to the end of that stream, support falls off a cliff and they’re left still in the pre-revenue phase.”

Canada often pours money into research, and then founders leave for the United States to get growth capital, Schaubroeck said.

The $930-million tax incentive expansion will focus on commercialization.

The Winnipeg Construction Association sees “significant opportunities” for local builds in the federal budget, said president Darryl Harrison.

He pointed to funding for housing and a new centre for mental health and addictions.

However, he’s worried the workforce won’t be able to keep up. The Winnipeg Construction Association and the Construction Association of Rural Manitoba penned a joint letter to provincial Business Minister Jamie Moses in October saying apprentice registrations have fallen over the past two years.

They blame the government’s decision to mandate one-to-one journeyperson-to-apprentice ratio training instead of two-to-one. The change occurred in 2024.

gabrielle.piche@winnipegfreepress.com