In its 2019 provincial pre-budget submission, the Greater Charlottetown Area Chamber of Commerce is calling for the lowering of PEI’s small business tax rate from 3.5 per cent to 2 per cent by January 2020. This would make the PEI rate the most competitive in Atlantic Canada.

“The Chamber applauds the 2018 decision to lower the small business tax rate by one per cent. However, Island small business owners are still paying higher taxes than other Atlantic Canadian businesses,” said Chamber President, Jennifer Evans. “We want PEI small business owners to be on a level playing field with others in the region and the country.”

The Chamber acknowledges the role business tax revenues play in funding government services. Notably, as a result of a strong economy, government surpassed its projection of business tax revenues by $38 million for fiscal 2017-18.

“While the Chamber encourages fiscal responsibility, over-taxing businesses has consequences,” said Chamber CEO, Penny Walsh-McGuire. “When Island business owners pay higher taxes, they have less money to invest in competitive employee wages, job creation and business expansion.”

A recent Chamber member survey administered by MQO Research found that 72 per cent of members felt businesses are overtaxed in the province and 71 per cent support lowering the small business tax rate to 2 per cent. Further, 67 per cent agreed that lowering business taxes would increase their growth opportunities.

The Chamber notes that historically, there is no correlation between a business tax rate reduction and loss of provincial revenues.

“Chamber members see a small business tax reduction as a way to help support their business, and the economy as a whole,” said Walsh-McGuire. “A sustainable and growing economy translates into more government revenues to fund essential services like healthcare, education and social programs.”

The Chamber’s 2019 provincial pre-budget submission, Building on Positive Momentum, outlines further research to support the call for a small business tax rate reduction. The complete document can be found at