Event: Launch of the 2014 Canada Revenue Agency Red Tape Reduction Consultations Report
Venue: Ministers’ Regional Office, Vancouver, BC
Date: June 19, 2015
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Thank you for that kind introduction. It's a pleasure to be here, and to be joined by Rick Thorpe and Laura Jones, recognized leaders in combatting red tape.
Red tape is the silent killer of jobs. It burdens all Canadians by restricting the innovation, productivity, and competitiveness of businesses, impeding economic growth, and stifling job creation.
Red tape affects us all, but it hits small and medium businesses the hardest. These businesses are critical to the health of the Canadian economy.
Small businesses are the lifeblood of our economy. They account for 98% of all businesses in Canada, and employ half of the working men and women in the Canadian private sector.
That is why our Government has made reducing and eliminating red tape in the tax system our priority.
The One-for-One Rule and other reforms have brought a new level of discipline to how our Government regulates businesses. The One-for-One Rule demands that when a new regulation is added, one of equal administrative burden must be removed.
I can assure you, as a member of the Treasury Board, this rule is applied rigorously.
The One-for-One Rule has alone saved businesses an estimated $22 million dollars last year, along with 290,000 fewer hours dealing with red tape.
That is why cutting red tape is our priority, particularly in my department at the Canada Revenue Agency.
As we do so, we are making sure that business owners—those who know best what is needed to be successful—are part of the solution.
And it's working. In response to consultations with small business in 2012, we are taking measurable and meaningful actions.
For example, based on input from the 2012 consultations, in Economic Action Plan 2014, our Government revised the remittance thresholds for employer source deductions.
Over 50,000 small and medium-sized employers now have the maximum number of required source deductions payments cut in half. This eliminates the requirement for more than 800,000 payments.
That is 50,000 businesses that now have less frequent reporting to government, and therefore less red tape.
That is 50,000 entrepreneurs who now have more time to focus on growing their business, employing Canadians, and supporting our economy.
The effect of this minor administrative change had such a positive impact on small business that the CFIB—Canadian Federation of Independent Businesses—awarded me with their prestigious Golden Scissors Award in January. Thank you again, Laura, for that honour.
But, as I said then, there is much more work to be done.
In the fall of 2014, we held the second installment of our biennial red tape reduction consultations. Small and medium businesses, bookkeepers, accountants, and stakeholder associations spoke to us about the challenges they face, and solutions they propose.
The consultations were held in-person, online, and through written submissions, to ensure that everyone in the business community had the opportunity to be heard.
We were thrilled by the tremendous level of engagement from BC participants in Burnaby and Delta. Your voices joined those across Canada, including Québec City, St. John's, and Whitehorse.
In total, we held 45 in-person sessions, covering all the provinces and territories, in addition to online submissions.
Participants acknowledged and welcomed our progress on reducing red tape. All provided helpful feedback in determining our new priorities.
Equipped with new ideas, we are determined to continue to make the changes that small and medium businesses want and need the most from the Canada Revenue Agency (CRA).
I am pleased to announce today the release of the 2014 Canada Revenue Agency Red Tape Reduction Consultations Report.
This report offers an overview of what we heard during last fall's consultations. In fact, its title is, "We Heard You: Cut Red Tape for Small and Medium Businesses!"
More importantly, it outlines a clear and achievable action plan to continue to cut red tape where it will make the biggest difference for small and medium businesses.
This action plan sets the CRA's priorities for the next two years as we strive to make it easier for businesses to meet their tax obligations.
It contains many initiatives and enhancements that will help business owners in their day-to-day operations and, ultimately, improve their bottom line, therefore improving their ability to contribute to the economic health of their community.
Based on feedback directly from the business community, we will focus on six priority areas:
- improve client telephone services;
- make it easier to find CRA information and services on the web;
- provide information in simple, plain language;
- help businesses get it "right from the start";
- make more online services and tools available, particularly in My Business Account; and
- better explain the audit process.
The action plan identifies items that will be achieved in the short term—to ensure that businesses see the changes they need and want now.
Immediate actions include:
- developing tools for telephone service agents to connect callers to the right expert;
- making the Liaison Officer Initiative a permanent program, assisting business owners in getting it right from the start;
- increasing auditor training on the business realities that an audit has on a small business;
- expanding the My Business Account services available online;
- and many more, as outlined in the Action Plan.
We have also identified numerous items that will be implemented in the longer-term as a part of CRA's ongoing red tape reduction efforts.
I am also excited to announce that, with the launch of the new Small Business Consultation Forum, led by the CRA and the CFIB, we are further strengthening our partnership with small businesses.
We are not simply listening to and responding to the business community: we are joining forces. Increased collaboration with key stakeholders will provide us with continuous, direct feedback.
We are fully committed to reducing the time and resources that businesses spend completing the actions and tasks required to follow Canada's tax laws and regulations.
Our consultation process isn't just a temporary measure—it's become part of our regular business operations.
Our Government knows that when you help small and medium businesses, you also help families, communities, and the economy.
To encourage small business growth, Budget 2015 reduced the frequency of remittances to the CRA, from monthly to quarterly, for new small employers starting in 2016.
More noticeable, it reduced the small business tax rate to 9 per cent by 2019.
This measure will reduce taxes for small businesses and their owners by $2.7 billion dollars over the next four year period.
When this reduction takes full effect in 2019, we will have achieved an impressive milestone.
Because of actions taken under the leadership of Prime Minister Stephen Harper, the small business tax burden will have been cut nearly in half by 2019.
That's right - nearly half.
This means an annual tax reduction of up to $38,600 that can be reinvested in each business to fuel its growth, and create jobs for Canadians.
We want business owners to focus on what they do best: growing their business, creating jobs, and generating wealth in communities from coast to coast to coast.
The 2014 Canada Revenue Agency Red Tape Reduction Consultations Report and the action plan it outlines drives us towards that goal.