Minister Valdez highlights federal government's significant new supports to help Mississauga small business owners
MISSISSAUGA, ON, Oct. 4, 2024 /CNW/ - Mississauga's small and medium-sized businesses keep main streets flourishing across the city, create well-paying jobs and deliver the dream of entrepreneurship. It is essential that these businesses thrive so they can continue being the bedrock of our communities and our economy.
Today in Mississauga, the Honourable Rechie Valdez, Minister of Small Business and Member of Parliament for Mississauga–Streetsville, along with Iqwinder Gaheer, Member of Parliament for Mississauga–Malton, highlighted the federal government's new supports to help small and medium-sized businesses start up, grow and thrive.
First, Minister Valdez spoke about the new reduced credit card transaction fees for small businesses that will take effect on October 19, 2024. More than 90% of small and medium-sized businesses that accept credit cards will receive lower rates and see interchange fees reduced by up to 27%. These fee reductions are expected to save eligible small businesses about $1 billion over five years. Reduced credit card transaction fees will save small businesses thousands of dollars every year. For example, if a store processes $300,000 in credit card payments, it currently pays nearly $4,000 in annual fees. But with the new agreements that the government negotiated with Visa and Mastercard, the store could save $1,080 in fees every year.
Second, the Minister outlined the payment amounts for the new Canada Carbon Rebate for Small Businesses, which will deliver over $2.5 billion to about 600,000 Canadian businesses before the end of this year. This refundable tax credit will return a portion of the fuel charge proceeds from 2019–20 through 2023–24 to small businesses in jurisdictions where the federal fuel charge applies.
In Mississauga, the Canada Carbon Rebate for Small Businesses will deliver $401 per employee. This means a rebate of up to $4,010 for a business with 10 employees, $20,050 for a business with 50 employees and $200,099 for a business with 499 employees.
Eligible businesses that filed their 2023 tax return by July 15, 2024, will receive their payment by:
- December 16, 2024, if registered for direct deposit from the Canada Revenue Agency; or
- December 31, 2024, if receiving payment by cheque.
Third, Minister Valdez highlighted the revised Code of Conduct for the Payment Card Industry in Canada, which will protect over 1 million businesses that accept credit card and debit card payments from customers. Starting on October 30, 2024, the revised code will help businesses compare prices and offers from different payment processors and will shorten the complaint handling response time by nearly 80% to just 20 business days. All major payment card network operators in Canada have agreed to the terms of the revised code. Certain obligations requiring complex or technical system changes will come into effect by April 30, 2025.
The government is taking action to help businesses start up, grow and thrive by reducing the costs of running a business. These new supports for business owners build on the government's lowering of the small business tax rate to 9%. In Budget 2022, our government lowered small business taxes further by making the 9% federal small business tax rate available to more businesses as they grow, which is saving businesses another $660 million in taxes over 2022–23 to 2026–27.
Quotes
"Small businesses are the backbone of our economy, and our government is once again delivering real, tangible support to help them thrive. The Canada Carbon Rebate will put $2.5 billion directly into the hands of nearly 600,000 small business owners across the country, while lower credit card fees will save small businesses an additional $1 billion over the next five years. Our message is simple: We've got your back so you can focus on growing your business, creating jobs and strengthening your communities."
– The Honourable Rechie Valdez, Minister of Small Business
"Small businesses create jobs and bring culture and vibrancy to every community they open up shop in. That is why I am so proud to be a part of a government that has their back and is helping them save money so that they can spend more time focusing on what is most important: growing and investing in their business."
– Iqwinder Gaheer, Member of Parliament for Mississauga–Malton
Quick facts
- The Canada Carbon Rebate for Small Businesses is a refundable tax credit to return a portion of federal fuel charge proceeds directly to eligible businesses.
- Businesses will not have to apply for this rebate. The Canada Revenue Agency will determine and automatically issue the rebate amounts for eligible businesses based on the payment rates of each applicable province for the corresponding fuel charge years, as specified by the Minister of Finance.
- The rebate will be available to eligible Canadian-controlled private corporations that had 499 or fewer employees in Canada throughout the calendar year in which the applicable fuel charge year began.
- The Code of Conduct for the Payment Card Industry in Canada was first released in 2010 and was last updated in 2015.
- All major payment card network operators in Canada incorporate the code into their rules, making it binding on all their network participants: issuers, acquirers and payment processors.
- More than 1 million businesses that accept payment cards in Canada will benefit from the code revisions. In 2023, these businesses accepted approximately 14.1 billion card payments worth $1.2 trillion.
- Businesses pay fees to process credit card transactions, with the largest component being the interchange fee paid to credit card–issuing financial institutions, such as banks. The federal government has finalized agreements to lower these fees for small businesses starting on October 19, 2024.
- Visa and Mastercard have agreed to:
- reduce domestic consumer credit interchange fees for in-store transactions to an annual weighted average interchange rate of 0.95%;
- reduce domestic consumer credit interchange fees for online transactions by 10 basis points, resulting in reductions of up to 7%; and
- provide free access to online fraud and cybersecurity resources to help small businesses grow their online sales while preventing fraud and chargebacks.
- Visa and Mastercard have agreed to:
- Small businesses will qualify with each credit card network individually.
- Small businesses with an annual Visa sales volume below $300,000 will qualify for the lower interchange fees from Visa, and those with an annual Mastercard sales volume below $175,000 will qualify for the lower fees from Mastercard.
- Non-profit organizations with transaction volumes below these thresholds will also benefit from reduced rates.
Related products
- Backgrounder: Payment rates for the Canada Carbon Rebate for Small Businesses (2019–20 to 2023–24)
- Revised Code of Conduct for the Payment Card Industry in Canada
Associated links
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SOURCE Innovation, Science and Economic Development Canada
