Opinion: My two cents on the challenges facing Small Business

Let me start by saying that the Chamber of Commerce is fiercely non-partisan. We will openly like, or dislike any Government policy, no matter what party is in power. Policy, not Politics, is our mantra. In addition, we are very well
represented, municipally, provincially and federally by our elected officials, including two cabinet ministers.

Having established that, and given that this is an opinion piece; It feels like there is a disconnect between the business community and Government. It feels like there isn’t enough understanding of what it actually takes to start a business and have it be successful.

To be fair, I believe I understand the thinking. On the proposed Federal Corporate Tax changes, the Federal Liberal Party was clear in its intentions during the election that brought them to power – to go after tax cheats. Fair enough, some have taken unfair advantage of the existing regulations. However the proposed reforms go so far, and so deep as to gather the majority of incorporated business owners under the tax cheat umbrella. To say that the typical small business owner has been deeply offended by this is an understatement. It appears that the Government has been listening and has finally started to soften its approach, though it remains to be seen what the end result will be. A more careful, evidence-based approach would have been better.

Similarly, with the Provincial Governments Bill 148, I understand the Governments desire to raise all boats on the tide of a $15 minimum wage. The Government appears committed to implementing the most dramatic increase in minimum wage in Ontario’s history! Their response to the universal “too much, too fast” response from business has
been to promise mitigation measures.

They are promising to mitigate a crisis that they’ve created! There is growing evidence that the timeline is indeed too much too fast.  The Keep Ontario Working Coalitions peer reviewed CANCEA Report, the Financial Accountability Office of Ontario Report, and the TD Economics Report, all warn of unintended consequences, some of them rather alarming. (These reports are all on our website.) The “tide” is starting to swamp local businesses with many of them already implementing their own mitigation strategies, including fewer hours, fewer jobs, and cancelled
expansions. A more careful, evidence-based approach would have been better, tax measures and a basic income guarantee should be considered, and a five year implementation strategy is still an option that I hope the Government will take.

This is small business week.

I wonder how many people truly understand what it takes to create a job… Simply having an employee in the building costs roughly 50% more than that employee’s salary. There is the cost of the building, the utilities to run it, the multiple taxes, the cost of regulation compliance (let alone the fees for the privilege of complying), and this doesn’t even scratch the surface. Most small businesses operate on a profit margin of 10% or less. This means that for every dollar that goes into the cash register it costs the owner 90 cents. That left over dime is typically sunk back into the business for expansion, new equipment, building improvements, new employees, etc. When Government legislates a cost increase, when hydro rates go through the roof, when wages get a legislated increase, it leaves a
business owner with very few options, and only 10 cents to solve the problem.

​Suffice it to say that, unless you’ve sat in the chair of a small business owner and faced the responsibility of mounting expenses, you shouldn’t judge, and if you are an elected official, you should make decisions based purely on evidence. policy, not politics.

stuart@peterboroughchamber.ca

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