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The Harper government will cut taxes for small businesses and the manufacturing industry in a budget designed to promote hiring and boost flagging investment.

Its pledge to reduce the small-business tax rate to 9 per cent by 2019 from 11 per cent — what the government said is the biggest cut for small firms in 25 years — received a positive response in Calgary.

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“This budget takes meaningful action to balance the budget, reduce small business taxes and cut red tape,” said Amber Ruddy, senior policy analyst with the Canadian Federation of Independent Business, which gave the budget an ‘A’ grade.

“Lower tax rates allow independent firms to invest back into their businesses by increasing employee compensation, offering more staff training, and paying down debt. Every dollar back in the pockets of business owners helps small businesses grow and prosper.”

The CFIB said the tax break for small business builds on earlier announcements of employment insurance premium relief, new measures to address credit card fees and balanced budget legislation. The new tax rate will save small firms $2.7 billion over four years and $1.2 billion per year when fully implement, it said.