A new survey suggests that many Ontario small businesses are feeling pessimistic about the economy and believe that the provincial government’s policies are hurting their organizations.

Results of the Canadian Federation of Independent Business (CFIB) survey of nearly 3,400 Ontario small businesses indicate that 65% of firms are very concerned about the state of the province’s economy, with 58% saying they are either somewhat or very pessimistic about the future of the economy.

Asked what type of impact certain provincial policies have had on their business operations, respondents indicated that the introduction of time-of-use metering for electricity (69%) and the introduction of the HST (68%) had a somewhat or very negative impact. In contrast, respondents indicated seeing a somewhat or very positive impact from reductions in the corporate tax rate for small businesses (63%) and the business education tax rate (25%) by the current government.

Respondents gave a “poor” rating when asked about the government’s performance in addressing such issues as the government’s levels of deficit and debt (78%), the gap between public and private sector wages and benefits (75%), and the level of taxes on individual Ontarians (69%).

“While certainly not all of the challenges facing Ontario are caused by government, entrepreneurs believe that provincial policies are making the problem worse and causing a withering of the economy,” stated Satinder Chera, CFIB’s Ontario vice-president.

At a recent meeting with provincial Finance Minister Dwight Duncan, the CFIB suggested that the government could ease the economic stress on small businesses through such actions as reducing payroll taxes, increasing the Employer Health Tax exemption to $800,000 from the current $400,000, and introducing measures to ease the transition to HST.