SEPTEMBER 2004 l exchangemagazine.com l 13

Catherine Swift, President and CEO of the Canadian Federation of Independent Business

FEATURE STORY

Never give up;never go awayThe CFIB is a megaphone for small businessBY PAUL KNOWLES

Who speaks for business in

Canada? That depends.

The Chamber of Com-

merce might claim that role. The

Better Business Bureau has a part

to play. Business sector associa-

tions – insurance, automotive,

manufacturing and the like – are

players.

“We have become a

research powerhouse ...

Credible, consistent

research is the way

you’re going to win.”

“We have become a

research powerhouse ...

Credible, consistent

research is the way

you’re going to win.”

But one sometimes controversialand always outspoken organiza-tion claims to represent small and

independent businesses better than therest. The rest may not agree, but that isthe unabashed claim of the CanadianFederation of Independent Business.

The CFIB represents 105,000 mem-bers across the country. Those busi-nesses – mostly small, all independent– pay between $225 and $2000 a yearto be part of the CFIB.

And what do they receive in return?A voice. No, more than just a voice –they get a megaphone, a nationalvoice-amplification system that, saysthe CFIB, guarantees decision-makerswill hear the opinions of independentbusiness people.

Sure, the CFIB offers certain otherperks to members, as well – inexpen-sive long distance telephone service,discounted banking, cheaper courierrates – but the key reason for being,according to President and CEOCatherine Swift, is to lobby governmentand other organizations, exclusively inthe interests of small business.

And Swift makes a compelling argu-ment that the CFIB is unique in its sin-gle-minded approach. This organiza-tion, she says, is not beholden to any-one except its members, and its mem-bers are each and all independent busi-nesses. She makes the controversialargument that the CFIB is unique in thisclaim. “I don’t know of any other majorbusiness group that does not takemoney from government,” she says,“and that compromises them.”

The membership of other businessorganizations is open to all business,she says, so there is always a depend-ence on large corporations, includingbanks. The Federation often lobbies forbetter banking breaks for its members;that stand would be impossible for anorganization that includes banks in itsmembership, she argues.

To be a member of the CFIB, a busi-ness must be “a Canadian-owned,owner-operated, privately-held compa-ny,” says Swift. There are “a handful ofmembers with more than 100 employ-ees,” while half of the members havefive or fewer employees.

Advocacy groupSwift offers the core definition of the

CFIB – “We are an advocacy group.”The Federation lobbies for measuresfavoured by its members, and againstpolicies they oppose. Success is oftenmeasured in terms of prevention: “A lot

our our biggest successes are things westop,” she says.

The Federation is constantly con-ducting surveys among its members todetermine where they stand on a widevariety of issues. If a large majority ofindependent businesspeople feelstrongly about an issue, the CFIB fightsfor that position. Swift says if the mem-bers are polarized on an issue, “we sur-vey our members and then we put theinformation out; we don’t try to extrap-olate.” However, “By and large theviews of small business across thecountry are very consistent.”

The CFIB also surveys politicians –especially during election campaigns.During the most recent Ontario elec-tion, the Federation produced a com-prehensive comparative survey includ-ing the responses of all three provincialleaders to 19 questions ranging fromtax issues to workplace safety. They fol-lowed the same course in the 2004 fed-eral election. And the Federation com-piles and analyzes copious amounts ofdata from governmental agencies

The President – trained as an econo-mist, and in her 17th year with CFIB –says “we never take a position on anissue without surveying our members.”

This process of seeking informationand then lobbying has made the CFIB ahighly respected source of well-researched information. Or, as Swiftsays it, “We have become a researchpowerhouse ... Credible, consistentresearch is the way you’re going towin.” And Swift plays to win.

“Our job is getting up against brick

14 l exchangemagazine.com l SEPTEMBER 2004

FEATURE STORY

“I don’t know of any

other major business

group that does not

take money from

government, and that

compromises them.”

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walls,” she says. And with credibleresearch reflectingthe views of 105,000business-owning tax-payers, governmenthas to listen “no mat-ter how much thepoliticians don’t likeyou. They know thisconstituency is a tough one to ignore.”

She points out that CFIB data is oftenused by government bodies in formu-lating policies. A conversation withSwift, and Ontario Vice-President JudithAndrew in the Toronto offices of theFederation leave no doubt that theleaders of the CFIB are well-connectedat every level of government. The CFIBhas 42,000 members in Ontario alone,and Andrew notes, “At Queen’s Park,[the opinion of CFIB members] carries alot of weight.”

She adds, “the Premier’s office inOntario has said that our labour analy-sis is better than Statistics Canada.”

Accurate predictionsSwift cites a dramatic example of

CFIB information-gathering. After the9/11 tragedy, economists and politicalleaders expected a drastic economicreaction. However, the CFIB surveyed5,000 members every week for twomonths following September 11, andSwift and company discovered that rel-atively normal business activity hadresumed among their members withintwo weeks. Flying in the face of con-ventional wisdom, they predicted astrong economy for Canada, and, saysSwift, “2002 was a really good year forthe Canadian economy.” She quotes theCanadian Minister of Finance at thetime, one Paul Martin, as saying “we

were the only oneswho were right.”

Today, the CFIBconducts a “CanadianBusiness Outlook Sur-vey” four times a year.Its results are so high-ly respected that it isfeatured internation-ally by Bloomberg,

and is consulted by Bank of CanadaGovernor David Dodge.

Expanding mandateThe CFIB was founded to advocate at

the national level. Later, provincialadvocacy was added – there are CFIBoffices in every province. And in recentyears, as municipal decision-makingimpacts more and more on independentbusiness, partly because of download-ing of services and taxation issues, theCFIB is engaged with municipal govern-ment as well. Swift points out, whilethere is one federal government, 10provinces and three territories, there arehundreds of municipal governments inCanada. This has greatly expanded theworkload of Federation staff – there areabout 300 across Canada, 200 as fieldrepresentatives whose primary task isserving members (“We personally visitevery member once a year,” says Swift)and recruiting new members. The CFIBfigures its membership accounts forabout 10% of a potential one millionCanadian independent businesses.

The CFIB was founded in 1971 by,John Bulloch, who had launched a “taxfight” with the federal government in1969, seeking to defeat a federal budgetwhich imposed a disproportionatelyhigh tax on small businesses. Bullochwas a business professor at Ryerson;his father owned an independent tailor-

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SEPTEMBER 2004 l exchangemagazine.com l 17

ing business in Toronto. When federalpoliticians ignored Bulloch’s argu-ments, he “went public with the dis-agreement,” says Swift. “He got thesupport of small business across thecountry,” and the tax proposal wasdefeated. And from these “humblebeginnings”, the CFIB – a not-for-profitorganization – was born.

It has grown exponentially. AndAndrew argues that the growth hasbeen well-rounded, representing everysector of Canadian independent busi-ness. For example, she points out thatthere are 2,300 agri-business members.The organization is also strong rightacross the country; there are 23,000members in Québec, 85% francophones.

The issuesSwift says that the heyday of small

business growth probably occurred inthe period from 1970 to 2000; now, “Isee a tapering – slower growth, butgrowth.”

Concerning federal and provincialgovernments, Swift says that as a resultof the recent federal election, Canada isat “a pivotal moment.” She hopes thenew political landscape may encourage

political leaders to work together,including between levels of govern-ment. During the previous Ontario PCgovernment, she argues, “there was nocooperation between governments. It

was horrendous. If governments arenot collaborating with each other, thiscauses big problems.”

And what do the members of the CFIBwant their organization to speak upabout?

Swift says the key issue is taxation.“Tax issues have always been one ortwo” in member surveys. Members areespecially concerned about “profit-insensitive taxes” such as payroll taxes;they resent paying taxes unrelated towhether their business is actually mak-ing any money. Members are also upsetabout the many and varied fees theyare assessed.

CFIB members are also concernedabout the “government debt deficit.”Swift also points out that members arevery upset with the “paper burden” – the“red tape” demands put on them by gov-ernment. She believes the CFIB lobby isproducing results; in British Columbia, agovernment study identified 350,000regulations on the books, and promisedto reduce that number by one third.

She says, prior to the federal elec-tion, Prime Minister Martin had askedthe CFIB to work with the federal gov-ernment in co-chairing “a new over-sight entity” concerning regulatoryissues; she hopes that effort will becontinued. Overall, says the President,the CFIB will continue to lobby vigor-ously “to reduce the burden that fallson small business.”

Ontario Vice President Judith Andrew

18 l exchangemagazine.com l SEPTEMBER 2004

She charges, “Canadians are way tootolerant about what they do with ourtaxes.”

Swift says Employment Insurance isan issue, especially the fact that E.I.premiums are treated as part of generalrevenue by the federal government,and that any over-funding can be usedfor other governmental purposes. Shesays over-funding should be used toreduce the employer share to a 50/50split with the employee; currently,employers pay $1.40 to every employeedollar. “We’ve been the most activegroup on the E.I. front,” she says.“They’ve [government] been raking inthe dough.” Concerning transfers togeneral revenue, Swift is blunt:“They’ve stolen $45 billion dollars.”

The CFIB President says membersare deeply concerned about “the short-age of qualified labour.” She calls formore support for community collegetraining programs, and asks the gov-ernment to allow more immigration ofskilled workers, and quicker accredita-tion of their skill sets.

The CFIB is quick to stand againstgovernment subsidy programs, eventhose supporting independent busi-nesses. “Our members have alwaysbeen opposed to subsidies,” she says,even before the notorious sponsorshipscandals. She argues that one half of allnew jobs are created by existing busi-nesses which would probably createthem without subsidy, and half by newbusinesses, which would not receivesubsidies. Instead of subsidization pro-grams, says Swift, “we think there arebetter ways to level the playing field –lower the tax rates.”

Swift says her members are consis-tently angered by the financial ineffi-ciencies of government. She notes thata recent study comparing equivalentjobs showed federal employees earned,on average, 23.3% more (wages andbenefits) than private sector employeesdoing equivalent jobs. Provincialemployees were 14.8% higher than pri-vate sector.

“You’ve gotta’ have governmentswith some guts,” she charges.

Andrew says many of the federalissues are echoed at the provinciallevel in Ontario; Ontario CFIB membersalways stress the problem of the taxburden. They also encourage theprovincial government to reduce gov-ernment spending.

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questions. Andrew says the CFIB is cur-rently surveying Ontario members, ask-ing, “Should the Ontario governmentpay the premium for their own employ-ees?” She pauses. “I’m guessing thatwould be a strong negative.” The CFIBis ready for that fight.

The newest CFIB battle field is in themunicipal arena. There, a key issue formembers across the country is propertytaxation. The CFIB has done a lot ofresearch – sometimes, in the face ofmunicipal disapproval (“[Kitchenermayor] Carl Zehr threatened to sue us,”says Swift) – concerning property taxa-tion. It is probably no surprise to smallbusiness people that business pays awildly disproportionate amount of tax.And the proportions vary considerablyfrom community to community.

Swift says that not only are the taxrates a problem, “Disclosure at themunicipal level is a disgrace ... theinformation is not publicly available.”However, the CFIB has done the leg-work (see Monitor, page 10), and theirfindings should interest over-taxedbusiness people.

Andrew adds that CFIB advocacy

concerning more proportionate proper-ty taxes – at the municipal and theprovincial level – “is ongoing.” But thecurrent bottom line, she says, is “ourmembers don’t trust local govern-

ments.” And concerning property taxoverload on business, she adds, “thebig cities tend to be horrible.”

One CFIB initiative calls for a smallbusiness threshold concerning propertytaxes – the first section of small busi-ness property tax would be paid at resi-dential rate.

Another municipal bugaboo, say theCFIB leaders, is again, “red tape.” Swift

again notes that municipalities treatfees as a cash cow: “cost recoverybears no relationship to the cost ofdelivering service. Bureaucrats view itas a profit centre. We’re not againstfees, but the cost ... has to have a rela-tionship to the service provided.”

“Not going away”One thing seems certain: the CFIB will

remain single-minded in its advocacy forits members. Swift insists that the onlysource of funding will remain member-ship fees; the other member benefitsmentioned above in this article – bank-ing, phone charges, and so on – produceno revenue for the Federation. And theCFIB does not charge for its valuableresearch materials, because, says Swift,“we want it out there .... and administra-tively, it would be a pain in the butt.”

Which phrase might actually echothe view of certain politicians and cor-porations about the CFIB itself. Buteven its most severe critics would haveto admit – Swift and colleagues are avery effective pain in the butt, indeed.As the CEO says, “we never give upand we never go away.”

FEATURE STORY

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