Standing Up for Small Business 2017 Ontario Budget Recommendations Julie Kwiecinski, Director of Provincial Affairs, Ontario Ryan Mallough, Policy Analyst, Ontario January 18, 2017 Check against delivery

Canadian Federation of Independent Business (CFIB) CFIB is a not-for-profit, non-partisan organization with 109,000 small- and medium-sized business members across Canada, including 42,000 in Ontario (representing about 500,000 employees) Each week, our representatives make nearly 2,000 personal visits to member businesses across Canada, allowing us to speak credibly on behalf of our members CFIB members set association policy through Mandate votes using the “one member, one vote” rule – research capacity is second to none CFIB is 100% funded by members

CFIB’s Ontario Member Profile Our diverse membership of 42,000 businesses is a good reflection of the Ontario economy

The Cost of Doing Business in Ontario Which of the following are major cost constraints for your business? Source: CFIB, Business Barometer®, December 2016, based on 243 responses

Electricity Costs Climbing How have your total business electricity costs changed during the past three years? (% response) Source: CFIB, Ontario Pre-Budget Survey, January 2017, based on 2,965 small business responses

Higher Electricity Costs Hurting Business How have electricity costs affected your business during the past three years? (% response) Source: CFIB, Ontario Pre-Budget Survey, January 2017, based on 2,965 small business responses

Time-of-Use Penalizing Business Has your business been able to change its electricity consumption from on-peak to either mid-peak or off-peak hours throughout the entire year to manage electricity costs? (% response) Source: CFIB, Ontario Pre-Budget Survey, January 2017, based on 2,965 small business responses

Billing Transparency Needed How difficult is it to understand the charges on your business’s hydro bill (e.g. Usage, Regulatory, Debt Retirement, Delivery, etc.)? (% response) Source: CFIB, Ontario Pre-Budget Survey, January 2017, based on 2965 small business responses

Cap and Trade = Higher Business Costs If a carbon pricing mechanism were to increase your business costs, what would be the impact? Source: CFIB, 2016 National Environment Survey July - August 2016, based on 2,350 small business responses from Ontario members

Red Tape = Deterrent Do you agree or disagree: If I had known the burden of government regulation, I might not have gone into business (% response) Source: CFIB, Regulation and Paper Burden survey, June 2014, Ontario data, based on 3,519 responses

Most Burdensome Provincial Regulations (% response) Stuck in Red Tape Most Burdensome Provincial Regulations (% response) Source: CFIB, Canada’s Red Tape Report, 2015

Small Business Tax Burden Continuing to Grow How has the total tax burden on your business changed during the past three years? (% response) Source: CFIB, Ontario Pre-Budget Survey, January 2017, based on 2,965 small business responses

In what timeframe should the provincial government balance its budget? Balancing the Budget In what timeframe should the provincial government balance its budget? Government Debt Level: 71.4 Very concerned 22.4 Somewhat concerned 4.1 Not very concerned 0.9 Not concerned at all 1.2 Don’t know Source: CFIB, Ontario Pre-Budget Survey, January 2017, based on 2965 small business responses

2017 Budget Recommendations Make hydro costs affordable, predictable and stable for small businesses. Eliminate time-of-use (“Smart Meter”) pricing for small businesses and implement a tiered-rate system where the first 3,000 kWh are billed at a lower rate; or allow businesses to “pick their peak” (i.e., adjust their on-peak, mid-peak and off-peak hours to better address the energy demand and consumption needs of their business) Remove the Debt Retirement Charge from commercial bills by no later than April 1, 2017 (i.e., at least one year sooner than planned) Require the Global Adjustment (GA) fee to be visible on all bills to inform Ontarians of exactly where their hydro payments are going, apart from usage

2017 Budget Recommendations Regulation and Paper Burden In addition to calculating red tape savings, determine the overall cost of provincial regulations and place a hard cap on the cost of rules in the system Expand the Red Tape Challenge to include more sectors of focus (e.g., retail) and centre red tape reduction efforts on reducing the regulatory burden for Ontario’s small businesses Conduct thorough public consultations before acting on any recommendations arising from the Changing Workplaces Review to determine potential effects on small businesses and Ontario’s economy Cap and Trade Create a clear communications plan under which small and medium-sized businesses would be made fully aware of and understand their obligations, if any, under the program Clearly and transparently communicate measurements on targets (e.g., explain CO2 emission amounts in a way all people can understand) Commit to annual, independent value-for-money audits of all cap and trade-related programs

2017 Budget Recommendations Government Spending Deliver on the commitment to balance the budget this year Upon balancing the budget, implement a clear plan that includes timelines to reduce Ontario’s growing debt, restrained and prudent government spending, and future balanced budgets