Here is a look at the small business challenges across Canada.

1. SMALL BUSINESS –
CANADA – PAIN POINT
BY: PAUL YOUNG CPA, CGA
DATE: OCTOBER 3, 2017

2. PAUL YOUNG - BIO
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. AGENDA
• Employment
• Issues facing small business
• Small business breaking point
• Issues facing Government
• Taxation (Who pays what)
• Canadian Manufacturing / Small Business Tax Proposal
• CFIB / Small Business Tax Proposal
• Justin Trudeau / Small Business

4. EMPLOYMENT / CANADA
Source – Stats Canada
Approximately 80%
of new jobs are
created by small
busines

5. ISSUES FACING SMALL BUSINESS
Policy Rate Impacted Areas Change % Link
Minimum Wage • $14.00 (2018) and $15
(2019)
• $13.60 (2017) and
$15.00 (2018)
ON, AB • Ontario minimum
wage hike 22% over
one year
• Alberta minimum
wage hike 20% over
one year
https://beta.theglobeandmail.com/re
port-on-business/alberta-and-
ontario-increase-minimum-wage-as-
they-aim-for-
15/article36450596/?ref=http://www.
theglobeandmail.com&
Hydro Rates Rates vary All Provinces • Ontario has seen 81%
increase in hydro
rates since 2010
https://beta.theglobeandmail.com/re
port-on-business/small-business/sb-
managing/small-business-owners-
anger-soaring-about-ontario-
electricityprices/article33344417/?re
f=http://www.theglobeandmail.com
&
Carbon Taxation • Trudeau said the
proposed price on
carbon dioxide
pollution should start
at a minimum of $10 a
tonne in 2018, rising
by $10 each year to
$50 a tonne by 2022.
• AB, BC, ON and PQ
have carbon
pricing/taxation
• Rest of the provinces
will implement carbon
tax in 2018
• Consumer goods cost
could go up between
5% to 8%
http://www.cbc.ca/news/politics/cana
da-trudeau-climate-change-
1.3788825

6. ISSUES FACING SMALL BUSINESS
Policy Rate Impacted Areas Change % Link
CPP Hikes All provinces • 3% per annum hike to
premiums
http://www.fin.gc.ca/n16/data/16-
113_3-eng.asp or
https://twitter.com/CFIB/status/844
649743213117440
Small Tax Proposal
• Capital Gains
• Wages
• Investment Income
All provinces https://www.bdo.ca/en-
ca/insights/industries/agriculture/ho
w-the-proposed-tax-changes-will-
impact-canadian-farmers/
Property Taxes • Various All provinces • 2% to 5% change https://beta.theglobeandmail.com/re
port-on-business/small-business/sb-
managing/calgary-mayor-naheed-
nenshi-risks-losing-citys-small-
businesses/article36353738/?ref=htt
p://www.theglobeandmail.com&
Access Capital
• Loans
• Grants
• Serie A financing
• Corporate Tax Rate • 10.5% Federally
• 4.0% (average
provincial rate)
http://www.taxtips.ca/smallbusiness
/corporatetax/corporate-tax-rates-
2017.htm

7. IS SMALL BUSINESS AT THE BREAKING
POINT?
• New Taxation Proposal focuses on wealth
• Hikes to payroll taxes
• Hikes to minimum wage
• Soaring hydro costs
• More and more regulations

8. ISSUES FACING GOVERNMENT
• All government are struggling to provide level services with slow economic
growth
• Governments are looking for ways to raise taxation
• Income inequality
• High youth unemployment
• Aging population
• Income distribution

9. TAXATION (UNDERSTANDING WHO PAYS
WHAT)
Radical shift to the left
Source -
http://business.financialpost.com/personal-
finance/taxes/heres-what-the-wealthiest-of-
the-wealthy-in-canada-earn-and-pay-in-
taxes

10. CANADIAN MANUFACTURING/SMALL
BUSINESS TAX
Source - http://www.canadianmanufacturing.com/manufacturing/tax-reform-devastating-small-manufacturers-cme-says-202423/
“Manufacturers are urging the government continue to encourage entrepreneurship, growth and investments by
revisiting the proposed changes,” Dennis Darby, president and CEO of CME, said in a statement. “We are
suggesting the government does this by working towards longer-term and more comprehensive reforms to create
a tax system that is simple and equitable.”
While CME said it is committed to finding solutions that deter tax-avoiding behaviour, it added that rewarding
entrepreneurship, innovation and risk-taking should also be a priority.
After assessing the proposed changes, the association is encouraging the government to continue allowing
spousal income splitting, but eliminate the practice for children under 24 years of age.
“We are also proposing the government creates a tax credit for CCPCs that allows them to claim 110 per cent of
their labour and capital expenditures against taxable income,” CME said. “This would lower the company tax
burden and encourages employment and investment but only for companies that are not tax-avoiding shells.”
The tax issue is expected to crop up again this week when Prime Minister Justin Trudeau meets with his provincial
counterparts.

11. CFIB AND SMALL BUSINESS TAX
PROPOSAL
Small Business Tax
Source - https://globalnews.ca/news/3779935/small-
business-tax-changes-cfib/
However, the changes might very well affect middle-income entrepreneurs as
well, by creating a pile of new, complex tax rules, Global News has heard from
tax accountants. That alone could be an important hurdle for smaller
businesses.
According to the CFIB, the cost of complying with existing rules is already
disproportionately higher for smaller businesses. Companies with fewer than
five employees spend over $6,600 to comply with regulations. For companies
with more than 100 employees, on the other hand, that tab drops to around
$1,400 per employee.

12. INCOME GROWTH

13. TRUDEAU AND SMALL BUSINESS TAX
• The lowering of the GST rate was
judged the “second largest income
inequality improving measure
instituted throughout the 2005-2013
period, second only to the highly-
distributive Working Income Tax
Benefit,” the PBO said.
https://globalnews.ca/news/1356467/
tax-cuts-since-2005-net-canadians-
30b-pbo/

14. LIBERAL TAX CUT
https://www.pressprogress.ca/3_reasons_why_the_midd
le_class_tax_cut_does_not_truly_benefit_the_middle_cl
ass
Facts:
• Two-thirds of Canadians
who earn less than $45,000
see no benefit
• Canada's wealthiest 10% will
get half of all the benefits
from the "middle class tax
cut“
• The new tax changes will not
raise any money
Impact to the economy
• Provincial policies like hydro will eat into any
savings
• Hikes to CPP will eat into tax cut savings
• Elimination of boutique tax credits for fitness,
textbooks, transit. etc.
• Small Business Tax Proposal
• Reducing the TFSA from 10,000 to 5,500
• Tax cut is not revenue neutral -
http://business.financialpost.com/personal-
finance/taxes/finance-minister-bill-morneau-
says-liberals-moving-ahead-with-middle-class-
tax-cut-higher-rate-for-wealthy

15. SUMMARY
• Tax code needs to be revisited including more consultation with all stakeholders
• The correct balance between environment and the economy
• More focus on policies that support getting goods to market
• More trade deals
• Revamping R&D programs to ensure fairness
• More emphasis on expanding ports (Ocean and in-land ports)
• Streamlining the process to approve projects
• The government should be more focus on BEPS including transfer pricing related issues
• You cannot tax someone to prosperity
• End the Class Warfare
• All levels government need to be reformed
• Compensation
• Pensions
• Value for money
• Outsourcing