CHARLOTTETOWN, PE – The reduction of the small business tax rate to 2% announced in today’s provincial budget is welcomed news for PEI’s hard-hit small business community says the Greater Charlottetown Area Chamber of Commerce, adding the organization has advocated for this level of tax relief since 2018.

The Chamber has been consistent and persistent in its advocacy efforts to reduce PEI’s small business tax to 2% – making it the lowest in Atlantic Canada. Today this goal was achieved,” said Greater Charlottetown Area Chamber of Commerce Interim CEO, Gerard Adams. “While our economic landscape is not at all what we predicted a year ago – and the road to recovery remains long for our local business community – today’s tax adjustment is a welcome relief for the thousands of Island small business owners going through one of the most challenging times of their careers.”

PEI’s small business tax rate was 4.5% when the Chamber began to call for it to be reduced to 2%. At the time, it was the highest small business tax rate in Atlantic Canada and second-highest in the country. Today’s announcement means that PEI’s small business tax rate is now the lowest in the region and tied for second-lowest in the country. The provincial government has committed to reducing the small business tax rate to 1% by the end of their mandate – a promise the Chamber will continue to hold them accountable for.

The announcement of an increase in the Basic Personal Amount from $10,000 to $10,500 is also news the Chamber views as positive. The Chamber will continue to encourage government to fulfill its election promise to increase the Basic Personal Amount to $12,000 by 2023 and tie subsequent increases to the Consumer Price Index.

“Over the last number of years, the Chamber has advocated for a Basic Personal Amount increase to help improve the situation for employees, particularly lower-wage earners,” said Adams. “Given the current economic landscape, this increase is needed more than ever.”

The Chamber added that it recognizes today’s abnormally large deficit projections. While the Chamber realizes this spending is in place to support Islanders and businesses during uncertain and unprecedented times, it suggests that under normal circumstances, it would be very concerned about these figures. The Chamber would like to see government present a plan to return to balance when the province is through the COVID-19 recovery stage, and the Island economy has rebounded.