Good morning.

My name is Jasmin Guénette, and I am the vice-president of national affairs at the Canadian Federation of Independent Business, or CFIB.

I would like to thank the members of the committee for this kind invitation. I will deliver my opening remarks in French, but I will be able to answer questions in French and English.

The CFIB represents 97,000 business owners from all sectors of the economy across the country. Among our member businesses, 70% have nine or fewer employees, and 28% have between 10 and 49 employees.

Currently, the optimism index among Canadian entrepreneurs is very low. This is according to our monthly “Business Barometer” survey, which we have been using for a few decades now to assess optimism.

Not only is the optimism index low, but the majority of entrepreneurs would not recommend that Canadians start a business because of the very high operating costs, economic uncertainty and tax burden.

When we ask our members what factors are limiting their business's growth the most, a majority indicate that demand is not there. In other words, consumers are spending less.

When asked about the top costs putting pressure on their business, our members cite insurance, taxes and regulations and payroll taxes as the top three biggest costs.

It is important to note that borrowing costs have risen sharply in recent years. What's more, the proportion of financing requests from small and medium-sized businesses, or SMEs, has increased significantly over the years. It went from 35% to 58% between 2012 and 2022. In addition, the approval rate for these applications is 94% for medium-sized business owners, compared to only 77% for microbusiness owners.

When the Bank of Canada began raising its key interest rate to combat inflation, the share of small business owners struggling with borrowing costs jumped from 21% in January 2022 to 39% in May 2023.

To ensure the success of our entrepreneurs and our SMEs, public policies, such as environmental ones, must avoid increasing the regulatory, administrative, tax and financial burdens of our SMEs. If we force environmental, social and governance criteria on financial institutions or large businesses, they in turn could force them onto their clients, which could lead to higher costs for SMEs and make financing less accessible and more expensive.

We therefore ask parliamentarians not to impose new legislative provisions on SMEs that would increase their costs and red tape.

Thank you.