Canadian SMEs Facing Barriers When Going Green

Canadian small business owners have been doing their part to actively ensure their business operations are environmentally friendly. That includes taking the time to implement sustainable strategies within their operations and identify where they can improve and how. Yet, according to the Canadian Federation of Independent Business (CFIB), Canadian SMEs continue to face detrimental barriers on their path to going green.

Canada’s business leaders are ready to make the green transition but need the government to create a more supportive environment, including further tax relief to help them transition away from carbon-intensive products and invest in clean energy and net-zero technologies,” said Lucy Lacovelli, Canadian managing partner at Tax, KPMG in Canada. In fact, 82% of surveyed Canadians reported that SMEs are key to the green transition in the country.

However, in 2022 alone, over half (53%) of small business owners revealed that there were more pressing issues at hand. Since 2020, the barrier against going green has risen by almost 40%.

New Environmental Policy Can Support SMEs

Small business owners have a lot weighing on them right now, from pandemic-related debt and skyrocketing costs to difficulty finding workers,” said Jasmin Guenette, vice president of National Affairs at CFIB. “It’s important that policymakers consider the current state of small business and how environmental policies and regulations will impact small businesses and the economy as a whole in the months ahead.”

The second barrier affecting 37% of small business operations the most was uncertainty surrounding meaningful environmental change from the government. An additional 32% revealed that governmental grants were also just too complex for them to utilize.

Small businesses are already taking actions to go greener in their operations whether it’s going paperless or reducing waste, but they will need additional support from government if more environmental regulations are proposed,” noted Taylor Brown, CFIB’s senior policy analyst. “It’s difficult for small businesses to invest in a growing number of environmental initiatives if their primary concern is to just stay afloat. Any government measures should benefit small business’ environmental practices without adding more costs or increasing their overall tax burden.”

The CFIB’s new report has outlined exactly how the federal government can effectively ensure that its environmental policies work for small businesses. The report stated the following:

  • Environmental regulations should support the notion that it’s possible to boost the economy while protecting the country’s environment.
  • The federal government needs to utilize an evidence-based methodology when implementing new environmental strategies and carefully consider any potential impacts on SMEs and the economy before the policies are enacted.
  • The government should also consider the current state of Canada’s small business owners and the economy when curating said policies to avoid a significant impact on SME operations.
  • The cost of doing business should be reduced along with decreasing the tax burden on small businesses to allow them to invest in green technology and environmentally friendly initiatives.

A majority (74%) of Canadian small business owners believe that growing the economy and protecting the environment can occur successfully at the same time. In fact, 64% of SME owners report using recycled materials from excess product packing and consider it their most pressing environmental issue. While 59% said that reducing waste was their priority.

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