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.
- 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
- Budget 2024: Fairness for Every Generation
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SOURCE Innovation, Science and Economic Development Canada