Small business owners in B.C. aren’t feeling too confident this spring, suggests a survey from the Canadian Federation of Independent Business.
Their optimism slipped the most of the Western provinces, with it a 3.6-percentage-point drop to 65.9 per cent since February.
CFIB western economist Aaron Aerts said the drop is concerning, but there’s “nothing to panic about” – yet.
“We consider 65 per cent and up to be relatively healthy,” Aerts said. “So 65.9 per cent is not a bad number.”
He said the dip in confidence could be tied to B.C.’s recent pipeline trade war with Alberta, as well as in anticipation of the new payroll tax coming in next January.
“The payroll tax will be felt in the bottom line… by those who are looking at expanding their businesses.”
He said any concerns are just speculation for now. “It will be really telling once the tax is introduced. Fear of a tax is one thing, it’s another thing to actually pay it.”
The payroll health tax, which replaces Medical Service Plan premiums, will hit all businesses with an annual payroll of more than $500,000. Those with payrolls between $500,000-$1.5 million will pay a yet-to-be-determined rate, while those at more than $1.5 million will pay 1.95 per cent.
The tax, which comes into effect next January, means that businesses already paying health premiums for their employees will pay double the amount in 2019 before MSP is phased out in 2020.
Despite gloomy predictions for the future, Aerts said B.C. companies are still hiring in the short-term.
“We’re seeing healthy hiring intentions,” he said, noting that 27 per cent of small business owners are look to hire, compared to just nine per cent looking to cut back.
“In the short term, I don’t think there’s anything to worry about in terms of employment.”
