Federal budget 2023 highlights

Government promises credit card fee relief for small businesses.
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In much anticipated move, the federal budget confirms a deal to lower credit card interchange fees for small businesses, as promised in last fall’s economic statement.

Credit card fees

Credit card interchange fees have increased by 55% the past 12 months and now represent the second-highest cost to Canada’s convenience stores, next only to payroll. These costs are an estimated $30,000 per year, per store, according to the Convenience Industry Council of Canada

In a statement, CICC cautioned that convenience stores must be included in what is considered an eligible small business.

“Today’s action has been a long time in the making, and we have been working with the government to ensure the concerns of our businesses were heard,” said president and CEO Anne Kothawala “It’s important that our stores, including those who sell gas, are considered eligible small businesses for this new, lower rate. Our stores are unique; overall revenues do not paint a clear picture of the profitability of our stores, nor do our larger members benefit from special rates provided to some retailers. We will continue to call on the government to ensure our stores see the relief that the government is setting out to provide.”

In addition to lower interchange rates, CICC once again urged the government to consider removing the interchange fees on the GST/HST portion of a sale (a commitment in Budget 2019) as well as adopt a fixed rate processing fee for fuel purchases.

Debt relief

In a statement, the Canadian Federations of Independent Business also welcomed news of the lower credit card fees, but said the budget was a missed opportunity to provide relief to small businesses facing massive debt loads and cost increases.

"A reduction of up to 27% in small business merchant fees is significant, but more details are needed to determine how many small businesses will benefit from this plan," said Dan Kelly, CFIB president.

"We were disappointed by the lack of meaningful debt relief for small businesses in the budget, when more than half are still carrying pandemic-related debt at an average of $105,000,” Kelly added. “An extension to the Canada Emergency Business Account (CEBA) loan repayment deadline of December 31, 2023, is desperately needed and will be a major priority for CFIB in the weeks ahead.” 

Note, that businesses can still repay after the deadline, but they will lose the forgivable portion of up to $20,000 and start accruing interest. 

Beverage alcohol

Convenience stores were also advocating for a pause to the federal excise tax increase on beverage alcohol. While the escalator tax will proceed, it is now lowered to 2%, as opposed to the proposed 6% increase announced last week.

Supply chain

The CICC said in a statement that "the commitment to remove internal trade barriers across the country is also a positive step forward that should help the convenience industry throughout the supply chain."


However, the industry was disappointed in the lack of commitment to tackle address Canada’s illegal, untaxed tobacco trade.

“The absence of action on the contraband tobacco file is concerning, as this represents millions of dollars in lost revenue to the federal government,” said Kothawala. “Federal leadership is needed here to demonstrate to our stores that they take organized crime, and the impacts of this illegal activity on our law-abiding stores, seriously.”

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