The CFIB has about 105,000 members, so we focus on issues that cut across almost all business sizes and types. Small and medium-sized companies account for 45% of Gross Domestic Product (GDP), and about 60% of employment. About 98% of Canadian businesses have fewer than 50 employees. Our 200-person field force visits and polls about 4,000 small and medium enterprises (SMEs) each week across Canada. The last survey in January reported these top five issues:

1. Total tax burden: This has been a top issue for the last 20 years, and applies to all levels of government. With all this year’s deficit financing, it will undoubtedly translate into even higher concern since all this debt must be re-paid.

2. Government regulations and reporting: This has been increasing over the last few years. We conservatively calculated the cost as $33 billion annually for all businesses in 2005. The federal government then said it would reduce red tape by 20% across 13 major departments, and recently announced this goal had been achieved. We’re not against regulation, but there are too many obscure and overlapping requirements between and within government.

3. Shortage of qualified labour: This has been the fastest growing issue over the last few years. It might now level off, but regardless of the economy, it won’t go away anytime soon. One part of the solution is immigration. Our 2006 report said more emphasis should be placed on employer needs, not just applicant skills. Now, temporary foreign workers can flip into permanent roles in certain situations, and may avoid an otherwise lengthy 18-24 month immigration process.

4. Employment Insurance: This one has been less of a priority recently as EI rates reduced. The EI fund had generated a massive $57 billion surplus over the last ten years. Not surprisingly, concern
has waned now that EI rates and program costs
are better aligned.

5. Debt and deficits: Though this has been coming down in priority as debts have been repaid both federally and in some provinces, we expect this one will now rise again. The CFIB is very concerned with the $85B of projected federal deficit over the next few years.

Somewhat. For example, it will be no surprise that in Alberta and the other western provinces, skills shortages have been the number one concern.
In Atlantic Canada, our members are more concerned about EI than elsewhere. In Quebec, taxation is a big issue. In Ontario, taxation and regulations dominate the priority list, and particularly taxes that must be paid regardless of profit, such as payroll taxes.

Virtually all SMEs are worried, and many are holding back on investments and hiring. Though the unemployment rate has increased, so far, this hasn’t been an issue with small employers. The CFIB publishes a quarterly Business Barometer^® that has been following GDP down since the second half of 2007. Our March survey showed a slightly higher index, but confidence is still weak, and only about 20% of our members are performing better than last year. Almost half say they are performing worse, and 43% say they expect their businesses to be weaker over the next year.

For full-time employment, two-thirds say they expect no change over the next year, and more now expect to hire (20%) than terminate staff (14%). Maybe we’re at or near the bottom?

Two other important points I should make.
First, retirement and succession planning is always a big issue. About half of our members
plan to exit their businesses in the next ten years, but few have planned how to do this. Second, access to credit and cash flow are now very big issues, particularly for small businesses. Generally, credit remains available, but the cost is rising, with some businesses reporting rates of prime plus
6% or higher.
 

Lots of issues, lots for the CFIB to do.