08:19 AM EDT, 10/17/2024 (MT Newswires) -- The Canadian Federation of Independent Business (CFIB) and 20 other industry organizations have sent a letter to the Canadian Minister of Finance Chrystia Freeland, calling on the federal government to scrap the planned increase to the capital gains inclusion rate and to make the Canadian Entrepreneurs' Incentive (CEI) available to business owners in all sectors, said CFIB on Thursday.

Several industry and business organizations, such as Restaurants Canada, Grain Growers of Canada and the Canadian Medical Association, have signed the letter to this effect, noted CFIB.

The increase in the Lifetime Capital Gains Exemption (LCGE) and its indexation into the future are welcomed announcements and should be retained and protected, stated CFIB.

For the CEI to encourage and support investment and entrepreneurship across the Canadian economy, it shouldn't exclude any sectors, pointed out CFIB. There is no public policy rationale to exclude a restaurant, hotel owner, physician's office, or accounting practice from a beneficial tax policy available to a retailer or construction company.

CFIB urges the government to simplify the CEI and broaden its eligibility to all sectors to support equity, simplicity, and transparency.

For its part, the increase in the inclusion rate will have significant negative consequences for Canadian small- and medium-sized enterprise owners holding investments within their corporations to re-invest in the future -- for example, to support the purchase of new machinery, business expansion -- as a cushion for economic disruptions and downturns, and eventually retirement.

These changes will make it harder for many businesses to access financing to enhance productivity or grow, or to even withstand challenging times. CFIB urges the government to scrap the increase in the inclusion rate to 66.7%, which will affect many business owners who are part of Canada's middle or aspiring middle class.

The assertion that the increase of the inclusion rate to 66.7% will only affect a small percentage of the wealthiest Canadians is misleading, according to CFIB. Many business owners, those they employ and those they serve will also be affected.