Submission By: Canadian Franchise Association; August 2023

Each year, the federal government solicits feedback from Canadians on their budget priorities through its pre-budget consultation process. The 2024 Federal Pre-Budget Consultation submission was due on August 4, and could be no longer than 2,000 words. CFA members have indicated that easier access to capital would enable brand growth.  The CFA’s submission included three (3) recommendations the federal government can implement to make it easier for everyday Canadians to realize the dream of owning their own business through the power of franchising and for franchisors to grow their brands. 

1. The CFA repeated our previous request, to allow individuals to withdraw up to $100,000 from their RRSP/RESPs to purchase a new or existing franchise business. Modelled after the federal government’s Home Buyers Plan, it would help prospective franchisees access capital without causing significant tax implications. 

2. The Small Business Deduction (SBD) threshold has been a long-standing tool to promote growth in small businesses by allowing them to pay a significantly lower tax rate on their first $500,000 of profit. Unfortunately, the SBD has remained static at $500,000 since 2009, when CPI has increased by more than 35%. This has significantly decreased the value of the SBD over the past last 14 years. The CFA is pushing the government to raise the deduction threshold to $700,000 and to index it to inflation. If this change is adopted, the value of the SBD will be tied directly to economic conditions and would ensure the threshold has the intended effect that businesses would pay less tax annually. 

3.  The CFA proposed a new initiative to allow qualified individuals who buy a new or existing franchise business to receive up to 10% of their investment from the federal government. This program is modelled after the federal government’s First-Time Home Buyers Initiative.  The First-Time Franchise Buyers Incentive (FTFBI) would make it easier to access capital and encourage small business growth through the franchise model.  

If you have questions regarding the CFA’s 2024 pre-budget submission, contact Derek Robertson, Senior Manager, Government Relations, at drobertson@cfa.ca. 

Learn more about the CFA’s pre-budget submission here:

Canadian Franchise Association 2024 Federal Pre-Budget Submission.pdf