Report: Small Business, Big Impact

Policy Solutions to Support Small Business Success

Background 

Small businesses are the backbone of our economy and our communities. They drive employment and prosperity across our city, province and country, and make up the innovative, resilient economy that Calgary is known for.  

In 2023, small businesses employed 47 per cent of the private labour force in Canada, and 94 per cent of businesses in Calgary were small businesses. These businesses contribute to prosperity across our country, provide good paying jobs, and support community vibrancy.  From 2017-2021, Canadian small and medium sized enterprises (SMEs) produced more than half of Canada’s GDP in goods-producing sectors and 46 per cent of our GDP in the services-producing sector. In 2023, SMEs contributed 38 per cent of exports by value, the ongoing trade conflict is exerting substantial direct and indirect pressures on businesses. 

Local businesses like coffee shops, breweries, retailers, and restaurants shape the character of our cities, while start-ups in tech, finance, and agriculture evolve our economy. Small businesses truly have a big impact — here in Calgary and across Canada.  

Issue 

Small businesses are often the first to feel the impact of broader economic pressures. Over the last five years they have faced a series of compounding challenges – from the COVID-19 pandemic and recovery, to supply chain disruptions, housing shortages, inflation and now a trade conflict with our largest trading partner. These pressures have created increasingly difficult conditions for small businesses across the country.  

Rising costs, labour shortages, and limited access to financing are having a severe impact on small businesses across the country. Per the Canadian Chambers Business Data Lab’s Q3 2025 report, small businesses (those with 1 to 99 employees) in the Calgary area are facing obstacles: 

• 52 per cent see cost as an obstacle to growth 
• 32 per cent expect their profitability to decline in the next three months
• 19 per cent cannot take on more debt
• 19 per cent are pessimistic about their next 12 months of operations  

Recommendations 

Businesses need certainty, efficiency and well-designed policy from all levels of government – and small businesses are no exception. To help them succeed we must foster a supportive investment climate that drives innovation, attracts investments and helps businesses to overcome affordability pressures. The Calgary Chamber of Commerce is pleased to provide the following recommendations for federal, provincial and municipal government to meaningfully improve conditions for small businesses in Calgary, and across the country. 

Federal 

To ensure Canada remains globally competitive, small businesses need a policy environment that rewards innovation, investment, and growth. The following federal actions would strengthen the backbone of the national economy while enhancing productivity and resilience. 

• Lower Employment Insurance premiums for small businesses, providing direct savings to businesses and employees leading to reduced expenses and increased cash flow.  

 

• Increase the Small Business Tax Deduction threshold currently at $500,000 – unchanged since 2009 – to $750,000 and index the threshold to inflation moving forward. By increasing the threshold, businesses will benefit from lower tax rates as they scale, fostering growth and sustainability and increasing the likelihood that businesses will remain in Canada as they expand. 

 

• Support flexible and accessible learning tailored to small businesses to build a more productive workforce, improve efficiency, and strengthen long-term profitability. 

 

• Increase provincial nomination limits and extend the duration that workers are eligible to remain in Canada, while reducing the cost and complexity of Labour Market Impact Assessments. These measures would help address persistent labour shortages across multiple sectors. 

 

• Reduce barriers to grants and funding by streamlining application processes, shortening approval timelines and introducing a Small Business Concierge Service to help entrepreneurs navigate federal programs. When businesses can access funding efficiently and predictably, they are more likely to invest, grow and create jobs

 

Provincial 

To strengthen Alberta’s competitiveness and ensure small businesses can continue to drive economic growth, the provincial government should focus on reducing costs, addressing labour shortages, and improving regulatory efficiency. These measures will help entrepreneurs reinvest, expand and create good jobs across the province. 

• Eliminate the small business tax, making Alberta competitive with Saskatchewan and Manitoba. This will leave more capital in the hands of small businesses, enabling them to reinvest and grow.  

 

• Reduce insurance premium tax from four per cent to two per cent. For many small businesses, even a small percentage change can have a significant impact on small business margins and long-term sustainability. 

 

• Invest in upskilling and reskilling programs to match employers’ talent needs within the talent pool. Addressing the skills mismatch – where high unemployment persists alongside labour shortages – will strengthen Alberta’s talent pipeline and productivity. 

 

• Continue to reduce administrative burdens and expedite regulatory approvals for small businesses to help them grow more quickly. Additional support, including existing small business advisors, support entrepreneurs in navigating opportunities and processes related to provincial grants, procurement, permitting and more. Additional capacity is especially valuable for new and early-stage businesses, reducing barriers to establishment and growth when capital is limited and risk is high.  

 

• Reduce barriers to grants and funding by streamlining application processes, shortening approval timelines, and introducing a Small Business Concierge Service to help entrepreneurs navigate provincial programs. When businesses can access funding efficiently and predictably, they are more likely to invest, grow and create jobs. 

 

Municipal 

A competitive Calgary requires a municipal environment where businesses can operate efficiently, invest confidently and grow sustainably. Reducing costs, improving certainty, and strengthening collaboration between the City and business community are essential to ensuring Calgary remains a leading destination for entrepreneurs and employers alike. 

• Rebalance residential and non-residential taxes through an incremental shift of two per cent per year for the next four years. A fairer tax distribution will lower operational costs for businesses, freeing up resources for reinvestment and growth. This will align our property taxes with the rapid increase in homeowners in Calgary who are now paying the residential portion of property tax, while businesses opening rates have remained flat. 

 

• Simplify, clarify and accelerate the process to obtain licenses and permits to enhance efficiency and predictability. Promote the Business Experience Improvement Program to help businesses navigate City processes and establish consistent and predictable response timelines so businesses can with confidence.  

 

• Minimize business disruption during construction projects by engaging businesses early in project planning, maintaining transparent communication and expediting timelines where possible. Timely updates and collaborative mitigation strategies can help reduce the operational and financial impacts of prolonged construction.  

 

• Provide direct financial support for businesses impacted by construction. While the City of Calgary’s offer of one-time $5,000 taxable grants for businesses impacted by construction in specific areas (e.g. Marda Loop and Bridgeland main streets) is appreciated, the support is insufficient to offset sustained revenue losses. A broader and more responsive program is needed to address ongoing and intermittent disruptions. 

 

• Elevate the Business and Local Economy Team within City Administration, leveraging them to be cross-functional through all departments, directing Business and Local Economy (BLE) to considerably increase engagement and consultation with businesses, and provide strategic counsel to the City on key decisions impacting businesses and the economy. Empower the BLE team to add a business lens to all City matters. 

 

• Establish a specialized procurement concierge service within City Administration to assist local businesses in navigating the RFP and procurement processes. This service should proactively connect businesses with procurement opportunities, provide guidance through the RFP process and scale existing innovative tools to support equitable participation in public procurement. 

 

• Provide micro-grants for small businesses to invest in safety and security by supporting investments in CCTV systems, height strips and improved lighting. Pair this with an education campaign to raise awareness about practical crime prevention measures for businesses and the public. 

 

• Develop a police report tracking application that can provide businesses and Calgarians with relevant, up-to-date information on the status of police reports they have filed. Increased visibility will help encourage reporting and strengthen trust in enforcement follow-up. 

 

Conclusion 

Small businesses are the backbone of Canada’s economy — driving prosperity, innovation and community vibrancy in every region of the country. They employ nearly half of Canada’s private sector workforce and play an outsized role in defining our cities, sustaining our main streets and fueling national productivity and growth. 

Yet, small businesses continue to face mounting pressures — from rising costs and labour shortages to regulatory complexity and ongoing uncertainty. Their resilience has been tested repeatedly over the past five years, and their continued success will depend on governments working together to create the conditions that allow them to thrive. 

We are calling on all levels of government to act collaboratively and with urgency to reduce barriers, improve competitiveness and strengthen the investment climate for entrepreneurs. By modernizing tax and regulatory systems, addressing workforce challenges and supporting local business vitality, governments can help unlock the full potential of Canada’s small business sector. 

Supporting small businesses is not only an economic imperative — it is a commitment to stronger communities, shared prosperity, and a more resilient, competitive Canada. 

About the Calgary Chamber of Commerce

The Calgary Chamber exists to empower our business community to advance a prosperous Calgary and Canada. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among our members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city.