What does it mean to be a business owner? It takes somebody willing to risk it all to see their idea blossom from the kitchen table to a bricks and mortar building or even an online presence. It takes someone willing to spend the countless hours navigating the regulations and legislative requirements of at least three levels of government. It takes someone with drive to constantly battle, like a salmon upriver, to ensure the jobs they’ve created remain viable. It takes someone with a sense of community because most business owners also give back to the community they live in.
Interestingly enough, at a time when we are seeing more and more people take on the dream of entrepreneurship the provincial and federal governments are looking more and more at small business with a critical eye. As presented in a recent Ontario Chamber of Commerce (OCC) report, Canadians now create new firms at a higher per capita rate than Americans, partly a result of the rapid growth of the start-up ecosystem. As such, Canada currently ranks as a global leader in entrepreneurship, particularly for early stage projects. In Peterborough there is a tremendous ecosystem of organizations ready to help and offer a hand up to see new ideas become realities and tested ideas soar. But where Canada fails as a nation is seeing the majority of those start-ups continue to scale into larger and successful small businesses or even medium or large businesses.
The OCC report looked at what were some of the barriers holding back those start-ups from developing from one person operations to being sustainable enough to hire and create jobs in our communities. In the report it was revealed that over the past ten years, for example, 71 percent of the jobs created in the private sector can be attributed to the activities of small and medium-sized enterprises.
Why are we going over all of this? Because proposed changes to the tax system will have a major impact on the continued growth of small and medium sized businesses. And it threatens to disrupt the entrepreneurial ecosystem that has been driving Canada’s economy one job at a time. In a white paper titled “Tax Planning Using Private Corporations” by the Department of Finance, the Finance Minister says “in the last year the economy added more than 300,000 new jobs.” That’s a bit misleading and takes away from the real work that lead to those new jobs. Let’s be clear. The faceless economy did not add those jobs. Business owners did. Business owners in communities across Canada worked for contracts, increased their sales, and invested in new equipment (perhaps even with the assistance of a government program). As a result, those business owners were able to offer those jobs. That’s how they became a part of the economy.
The Canadian Chamber of Commerce (CCC), along with many in the accounting profession, believe the proposed rules could potentially raise taxes, increase the administrative burden on SMEs and heighten the impact on family-run businesses.
On July 18, Finance Canada launched its 75 day consultation outlining four key changes that will affect businesses structured as private corporations:
These proposed tax changes apply to all businesses across all sectors from retail to landscapers to farmers and
manufacturers. The current system has allowed for growth and jobs. The proposed changes threaten to make it more difficult to be a business owner stifling growth and jobs.
The economy doesn’t create jobs, the business owner does. Give them tools to continue to do so and their success will also be Canada's.
Comments on the white paper and proposed changes are open until October 2, 2017 and comments can be emailed to firstname.lastname@example.org
Canadian Chamber 5 Minutes for Business Article
MP Maryam Monsef -Peterborough-Kawartha
MP Kim Rudd - Northumberland-Peterborough South
MP Jamie Schmale - Haliburton - Kawartha Lakes - Brock