Canada’s finance minister is teasing that this week’s budget will address pain points for the country’s small businesses.
“I think you will see in this budget a journey to … simplify the life of small and medium-sized businesses.”
Ahead of tabling the 2026 federal budget this Thursday, François-Philippe Champagne said in a conversation with CBC’s Peter Armstrong at the Canadian Club of Toronto that the government is aiming to simplify things for entrepreneurs and small business owners while continuing its campaign to bring more investment to Canada.
“This is a budget about entrepreneurs,” Champagne said on stage. “This is about a budget [for] innovators. This is about the budget for creators, and they will see themselves.”
“I think you will see in this budget a journey to fixing a number of things to…simplify the life of small and medium-sized businesses,” Champagne said. “I think that on Thursday, those who represent small businesses will see themselves in that budget.”
It’s unclear what specific measures Champagne is referring to, but recent calls from business groups could offer some clues. In its pre-budget submission, the Canadian Federation of Independent Businesses (which represents small and medium-sized businesses) recommended that the government reduce the small business tax rate from nine percent to six percent. It also suggested that the feds extend the threshold for a preferred tax rate for small businesses to their first $700,000 of income, rather than $500,000.
Several investor and business-sector groups, such as the Canadian Venture Capital & Private Equity Association and the Council of Canadian Innovators, have called for tax changes they say will incentivize investment in Canadian companies and entrepreneurship in general. These include a capital-gains deferral and a QSBS-style tax incentive that’s similar to the US system.
Canadian investment leaders have told BetaKit that the feds appear to be more amenable to pro-business changes than in the past. A pre-budget report from Scotiabank economist Rebekah Young also noted that potential capital gains incentives for startups and lower tax rates at higher incomes were possible.
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Champagne also hinted that the budget could contain further changes to the popular Scientific Research and Experimental Development (SR&ED) tax credit. In last year’s budget, SR&ED rules were reformed to expand eligibility and raise expenditure limits, as well as an intent to streamline the review process with AI.
“When I met people at the time, they were asking us not only to expand, but to make that more simple,” Champagne said. “And we’re going to go beyond.”
The finance minister’s remarks come after the feds announced a Productivity Mega Deduction in September, a new measure that allows businesses to immediately deduct the full cost of most new capital investments. It’s part of a broad effort to make Canada a more attractive place to invest.
“People may think it’s for big businesses,” Champagne said. “It’s for local businesses which are purchasing new kitchen equipment, a small business purchasing new tools or office technology.”
Feature image courtesy François-Philippe Champagne via LinkedIn.