Quebec and Ontario have the least small business-friendly provincial tax systems in the country, according to a new study by the Canadian Federation of Independent Business (CFIB).

The study examines how the provinces stack up by examining 65 indicators in five major areas of tax policy: premiums and payroll taxes; corporate income taxes; property and capital taxes; personal income taxes, and sales and excise taxes.

According to the study, Alberta’s tax regime is the most friendly to small businesses, followed by New Brunswick and Saskatchewan.

“It is alarming that the two biggest provinces, which make up 60% of the total economy, are the weakest links in the provincial tax chain,” says Catherine Swift, CFIB president. “It is no secret that a province’s tax system can help attract or repel investment, and these provinces in particular are doing a poor job of nurturing small business growth,” Swift notes. She adds that the cost, complexity and number of taxes business owners face are a barrier to local growth and stability.

Swift didn’t leave the higher ranking provinces off the hook. “All provincial tax systems have room for improvement because most provinces barely make a passing grade,” says Swift. She pointed out that those provinces which score better on CFIB’s Small Business Provincial Tax Index levy lower rates of tax and apply broad-based incentives that are simple and accessible.

“It is important that provincial policy makers understand the need to foster a mutually beneficial relationship with local business owners,” says Swift. To that end, tax relief measures contained in the recent Ontario budget are a step in the right direction.

IE