OTTAWA
The federal budget due Thursday will include targeted tax breaks for entrepreneurs and small businesses, according to policy plans circulating ahead of its release.
The government is also aiming to curb the cost of regulation, with a target to eliminate $2 in regulatory costs for every $1 in new costs.
Business groups have long pressed for reform and less red tape ahead of the budget, arguing that a clearer, simpler tax code and lower regulatory burdens can influence how quickly businesses invest and expand.
The budget is expected to address the broader question of tax reform and regulatory efficiency, with Ottawa signaling interest in balancing growth-friendly measures with fiscal discipline.
Finance Minister François-Philippe Champagne has said the budget will focus on entrepreneurs and aim to make the tax system less complex, as e2gold.ca reported earlier this month.
The upcoming budget is being watched for details on whether targeted supports for small firms will include temporary or permanent elements, and how they would interact with existing programs.
Analysts and industry associations will be assessing not only the size of any relief but also the timing and mechanics of how and when measures take effect.
In addition to federal measures, Ottawa’s municipal government is pursuing its own tax relief for small-business properties.
The city’s official information describes a program designed to ease the tax burden on eligible properties, through a 15% reduction in property taxes phased in over two years while residential properties are unaffected.
Property-tax relief is limited to eligible commercial and other non-residential properties, with the 15% reduction phased in across the two-year period.
The interaction between federal incentives and local tax relief will shape how small businesses plan for the next two years.
The budget presentation will lay out policy design, fiscal assumptions, and timeline for any measures announced.
Stakeholders will then dissect the details to determine how proposed tax rules and regulatory reforms would translate into cash flow, compliance requirements, and investment planning for the coming years.
Lessons from the GST fight
This week's budget calculus comes more than three decades after the contentious introduction of the Goods and Services Tax.
When the GST took effect on Jan. 1, 1991, at 7 per cent, it followed a political clash over moving the tax from the factory to the till.
To soften the backlash, Ottawa promised to leave basic groceries untaxed, a concession that narrowed the tax’s base, and one that meant deciding, item by item, where groceries ended and indulgence began.
A chicken kept warm under a supermarket heat lamp would be taxed as a prepared meal, while the same bird, chilled and moved to the deli case, would be a grocery.
Five muffins made a taxable snack, while six made a household staple.
Anger over the tax helped reduce Brian Mulroney's Progressive Conservatives to two seats in the 1993 election, months after he left office.
But the GST outlasted him, and outlasted the Liberals’ 1993 promise to replace it, and today accounts for about 10 per cent of the federal government’s revenue.
François Vaillancourt, an economist at the Université de Montréal, said it worked because it arrived as a “big bang” that forced everyone to adjust at once.
More than three decades on, economists and business groups are pressing Ottawa for another, even as the government signals it prefers something closer to steady state.
The GST fight remains one of the defining episodes in the history of Canadian taxation, a road paved with best intentions and rules that have long outlived their purpose.
And Thursday’s budget might not do much to change its direction.
This story was written by the e2gold.ca newsroom from reporting by The Globe and Mail and Rich Picks Daily. Quotes are checked word for word against that reporting.