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I am a small business owner based in Cambridge, Ontario. Along with my partners, we operate two manufacturing operations employing a total of about 25 people.
I am proud of all of the response of our political leaders to this crisis on all levels – local, provincial and federal. They have taken a sober and analytical approach to the immediate needs of the citizens of this country.
Their willingness to commit funds, resources and support to our front line workers, small businesses and all in need will get Canada through this ordeal.
As a business owner, my top priority is always looking ahead to determine how I can not only succeed; but avoid unexpected disruption to my team; and minimize our potential for risk of any kind.
This is where I think the business community needs more support from our leaders.
The question of when we should re-open for business is open for debate. The leaders in Canada, USA and abroad have differing opinions on this matter.
There is only one question on my mind – what is required for me to do business in a way that will be safe for my team, clients and supply chain? This is the question that must be answered prior to our return to regular business.
There is no doubt in my mind that the scientists of the world will determine when it should happen; using the tools and expertise available to them. It brings me comfort to know that our Canadian politicians are being guided by science in their decision making process on these issues.
However, there is another component to this decision that I think we are neglecting. Whenever we return to work, it will be to a new business landscape. There are new risks, new considerations and a higher expectation from the community for business owners to provide a safe working environment. As a community, we need to determine what will be required to have in place prior to a return to “regular” business. Until we have a vaccine / “herd immunity”, do workers require masks to be safe? Do we need to require hand sanitizer at entry points to work areas and require all team members to use? In Taiwan, there are some common practise expectations for citizens that have allowed them to maintain a very low infection level of COVID without restriction on children being at school, or businesses operating normally. What can we learn from their example that can help us to prepare to resume our work?
If Toyota, Honda, or even my business or a local hair salon re-opened in two or four weeks without making any adaptations to how the risk of COVID transmission is controlled; how will we have made progress against this disease?
The saying “time heals all wounds” has never resonated with me. Time doesn’t heal all wounds; but time does offer us the opportunity to prepare for what is coming at us next. We know that the economy will have to resume prior to COVID being completely eradicated. The question is – what will we as a community do to mitigate the risk of another peak of infection as we make that return to the new normal?
There is no question that children will have to return to school; I am less concerned about when that happens than I am about what the plan is to keep them safe and healthy once they are there. We have the example of how Taiwan has made this work; kids wearing masks and having plastic cubicle style dividers between desks during meals. Will we use this time to learn from their example and adapt our own action plan for what is required to be in place prior to resuming their in class education? My hope is that we do.
The Cambridge Chamber of Commerce is starting to gather experts and business owners to start this discussion. I am proud to be a part of this discussion; I look forward to learning and planning together with others to determine how we as a business community can plan to get back to business. This is new territory for everyone – consumers, business owners, employees, politicians, government, youth and seniors. If we can agree on the supports that are needed to re-open in a safe manner, the time spent until that happens can be spent planning and making the required changes to how we do business to accommodate the new reality we live in. If as a community we neglect this opportunity to plan and adapt, we are destined to repeat this cycle of the pandemic again in the not so distant future.
This is work that our Chambers of Commerce, professional associations, industry associations, regulatory bodies or governing standard registrars, perhaps the labour unions and school boards are well poised to do. They have connections to business in their sector, a communication channel with a broad range of companies in a vertical market, and the support of their members. If we all pressure these organizations in our own industries to get to work on our behalf, we can start planning for the future.
It’s time to change the question from “when can we re-open” to “what is required for a safe and healthy re-opening in my workplace to get through this crisis”?
Let’s get to work.
Kristen Danson Managing Partner MitoGraphics Inc. / Swift Components Corp 519 240-4205 Direct
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Leading tax practitioners say that business owners with income as low as $50K will be affected
Ottawa, September 27, 2017 – The Coalition for Small Business Tax Fairness, a unified voice of more than 70 organizations representing hundreds of thousands of business owners across the country, has written a new letter to Finance Minister Bill Morneau with professional analysis confirming that Ottawa’s tax proposals will affect middle-class business owners, resulting in higher tax rates than other Canadians with similar income levels.
“We are alarmed by the huge gap between the government’s statements about the impact of their proposals and the detailed analysis by Canada’s tax professionals,” said Dan Kelly, President of the Canadian Federation of Independent Business (CFIB) and member of the Coalition. “Tax practitioners are united in the view that these changes have the potential to affect all small business taxpayers, no matter their income.”
"It is the farmers, mom and pop shops, and entrepreneurs, who invested everything into their businesses, that will be most affected by these changes, instead of targeting the real problem. The government needs to go back to the drawing board, hold a real consultation and listen to what tax professionals, provincial governments and the business owners who fuel the growth of our communities are saying," added Perrin Beatty, President and CEO of the Canadian Chamber of Commerce.
The government has claimed that these proposals would not affect business owners with incomes under $150,000. Tax practitioners disagree.
One of the new rules introduced by the government would restrict small business owners from sharing income with family members. Tax practitioners say that this can affect business owners with incomes as modest as $50,000. Also, as two-thirds of Canadian incorporated businesses are majority owned by men, the restrictions on sharing income with a spouse are likely to remove a disproportionately higher number of women from benefiting from their family’s business.
The government is also proposing changes that would discourage small business owners from holding certain types of investments in the incorporated company. According to tax practitioners, business owners retain business earnings in the corporation to safeguard against economic downturns, secure bank financing and invest in other start-up companies.
Tax practitioners have confirmed that the proposed tax changes would result in higher combined corporate and personal taxes for business owners across the board and in many cases, small business owners would incur tax rates far greater than what an employee with a similar level of income would pay.
The Coalition, which has doubled in size since August 31, is asking the federal government to review carefully the analyses of tax professionals across the country, take these proposals off of the table, and launch meaningful consultations with the business community to address any shortcomings in tax policy.
The Coalition for Small Business Tax Fairness is encouraging business owners and other concerned Canadians to contact their Members of Parliament and use the hashtags #unfairtaxchanges #taxesinéquitables on social media. For the full list of Coalition members, please visit smallbiztaxfairness.ca.
For media enquiries or interviews, please contact: Andy Radia
What some are saying:
“The agriculture equipment manufacturing sector represents 12,000 Canadians and their families predominantly in rural areas; as entrepreneurs who have put their lives on the line to invest in and grow their family business, the sector consistently exports more than $1.8 billion of farm equipment to over 150 countries. The scope and complexity of the proposed tax changes puts a lot of this at stake, and we must fight to ensure that fairness prevails for our members.” — Leah Olson, President, Agricultural Manufacturers of Canada
“Franchisees are the backbone of the communities they serve, by employing people of all backgrounds, supporting local initiatives, and helping grow the economy. As business owners, they assume significant risk, but have been able to achieve success through hard work and support from family members. Simply stated, CFA believes the changes being proposed by the Minister will hurt Canadian franchisees.” — Ryan J. Eickmeier, Vice President, Government Relations & Public Policy, Canadian Franchise Association
“The residential construction and renovation industry has always largely consisted of family-run businesses that help build the communities they operate and live in, many over several generations. These are hard-working Canadians trying to earn a middle-class living, hire local workers, and create a future for their families. The government’s proposed tax changes threaten the very existence of these businesses, posing a threat to small local companies in every community and the jobs they create.” —Kevin Lee, CEO, Canadian Home Builders’ Association
“We look forward to working with the Minister of Finance to ensure that any changes help secure the future of agriculture and not hinder it.” — Mark Wales, Chair of the Canadian Horticultural Council’s Business Risk Management Committee
“We are fully supportive of the government’s pledge to advance evidence-based policy-making. Our members are concerned that the government’s proposed changes to small business taxes are not sufficiently informed by the level of research, analysis and consultation required to ensure a full appreciation of the impacts this will have on Canadians - not just entrepreneurs and small business owners but also on the overall health of the Canadian economy and competitiveness in the short and long term.” — Leigh Harris, Vice Chair (Interim) National Board of Directors, CMC-Canada
“Canadian business families are scared, confused, and demoralized. Years of planning for business succession will potentially go up in smoke! And we’re being called tax cheats along the way. Canada can do better, we must do better—our economy depends on it.”— Allen S. Taylor, Chair, Family Enterprise Xchange
“These egregious proposed tax changes would negatively impact the family farm in ways that are both profound and complex. The federal government needs to reverse course on their ill-advised tax hike attack on our middle-class family farms. — Levi Wood, President of the Western Canadian Wheat Growers Association, grain farmer |
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Letter Sent to the Cambridge Chamber of Commerce Membership
The federal government's recent small business tax proposal is punitive and will have damaging effects on business communities in Ontario and across the country.Over the summer, the federal Finance Department has made it clear that it intends to make the most sweeping changes to business taxes in 50 years.These proposed changes will negatively impact tens of thousands of businesses by raising taxes, reducing incentive for private investment, increasing administrative burdens, and making it even more difficult for a business to be transferred from one generation to the next.
Family businesses and family farms are being touted as tax cheats by the Federal Government. Although, they have walked that back - the fact is they have described legitimate and legal use of the tax laws are wrong and most commonly referred to as a loophole. This is not only ignorance of what it takes to build a successful business, but makes Canada the only country in the world to impose such punitive tax measures on small business. It is clear, this government has no respect for business, especially the locally owned family business.
The immediate reaction from our members and businesses across Canada was negative. We are particularly worried about the effects of the proposed tax changes for small and medium sized businesses - who are essential to our thriving local business community. We encourage local businesses to contact our MP to provide feedback on the possible changes.
Bryan May, M.P., Cambridge & North Dumfries
Marwan Tabbara, M.P. Kitchener South - Hespeler
As an organization, we support reasonable attempts to reduce tax evasion or loopholes. However, these changes are insulting to businesses that have worked within the rules in good faith to build their businesses, to save for retirement, and sometimes just to keep their doors open.
Small Business is Too Big To Ignore and we need to demonstrate this with one voice.
If you're not a small business owner but work for one, ask Mr. May and Mr. Tabbara to protect YOUR job by supporting small business entrepreneurs in Cambridge.
SIncerely,
Greg Durocher Cambridge Chamber of Commerce President/CEO |
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If your business is incorporated, you could be facing a larger tax bill and big compliance costs from the government’s new proposals to change the way corporations are taxed. Here are three things you need to know about the tax changes proposed by the federal government:
Small and medium-sized businesses (SMEs) are the engine of the Canadian economy – estimates range from 85 to 90% of all businesses in Canada are SMEs.
The chamber network across Canada is using its collective voice on this issue; your voice as a business person needs to be heard as part of this initiative. Send a message to your MP today. Government needs to know that this tax reform will harm businesses of all sizes.
Don’t know where to send the message to your Member of Parliament? Look up their address using your postal code.
Thirty-five business groups, including the Canadian Chamber—on behalf of the hundreds of thousands of members they represent—have presented a letter to Finance Minister Bill Morneau asking the government to take these proposals off the table and instead meet with the business community to address any shortcomings in tax policy affecting private corporations. |
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These are not tweaks! The government has just proposed the most radical tax overhaul in 50 years. We’re particularly worried about the impact on business from (1) a new tax on investment income in a corporation and (2) tough new rules for compensation in family businesses. Why is the government doing this?
Finance Canada also expects to raise $250 million by cracking down on “unreasonable” salaries paid to family members, which it says diverts corporate income into lower tax brackets. But, to pull in $250 million, CRA will have to tax over $1 billion in salaries and audit hundreds of thousands of businesses. Imagine the litigation! You’re paying your spouse $80K, but the CRA believes he or she should only be earning $50K. Do you go to Tax Court? An owner told us, “if my son had not worked 12 hours a day, my business might not have succeeded. Painting us all as cheaters is unfair and discriminatory.”
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Big increases to minimum wage are becoming fashionable in Canada: first Alberta (from $12.20 currently to $15 in October 2018), then B.C. (from $10.35 to $11.35 in September 2017) and now Ontario (from $11.40 to $15.00 in January 2019, a 30% hike in 18 months). Are workers better off or does it mean fewer jobs?
Let’s take these in order. Some businesses are so spectacularly profitable that owners can just absorb rising labour costs. But Apple and Microsoft don’t use minimum wage labour. If we look at profit margin by industry, the biggest users of minimum wage labour are in retail and food service, with razor thin (below 3%) margins. There is very little room to absorb these costs, and if a business is not profitable, there is not much point in keeping it going.
That’s why the recent Seattle study produced such a bombshell. Washington state collects detailed data on hours worked and it showed how part time workers with irregular schedules are cut back. Seattle’s minimum wage hike reduced the total hours worked by the low-wage workforce by about 9% while raising their wages by only about 3%. The net loss to workers was an average of $125 a month. This is a big, immediate hit to the most vulnerable workers.
There is some evidence that modest increases in minimum wage can be done without disrupting labour markets, but governments have to be cautious about hurting competiveness. Previously, I had said there are three options to deal with rising costs, but there is actually a fourth and a fifth option: shut down or move to a different jurisdiction. Let’s provide input to the Government of Ontario to prevent this from happening. The Ontario Chamber of Commerce has
For more information, please contact: Hendrik Brakel Senior Director, Economic, Financial & Tax Policy 613.238.4000 (284) | hbrakel@chamber.ca |
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The Liberal government wants to introduce a minimum wage increase to $15 dollars an hour by 2019. This isn't a move that best helps the people of Ontario nor is it the right move. Funny enough... These newly reformed labour laws won't fully come into effect until AFTER the provincial election is over with. Is it about helping the people of this province? Or is it a move for someone to keep their Premier job?
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Bonnie Lysyk the Auditor General for the Province of Ontario released her report last week. The most scathing report in the history of the Province, suggesting that programs are riddled with incompetence and mismanagement.
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Small businesses across Canada need to voice their concerns to show decision-makers that they are “too big to ignore”. Show your support, watch the video and share.
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Brian Rodnick 35 February 26, 2021 |
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Canadian Chamber of Commerce 24 January 29, 2021 |
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Cambridge Chamber 2 March 27, 2020 |
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Greg Durocher 39 September 25, 2017 |