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For small business in Alberta, it’s death by a thousand cuts

Running a business is hard enough on its own. With the incoming barrage of tax hikes, we're biting the hands that feed us

Aug 2, 2016

by Michael Ganley

Businesses in Alberta are getting squeezed. The overriding concern is the price of oil, which has ever-so-slowly edged up from the $27 lows experienced in January but is still at a price that tests even the best-prepared producers. Then there are increasing property taxes, particularly in Calgary. And the federal government, with the agreement of most of the provinces, has launched an expansion of the Canada Pension Plan, which will bring with it greater payroll taxes. And the provincial government insists on raising the minimum wage to $15, despite the cumulative effects of all these other cost increases.

Those are three burdens – one from each level of government – for businesses to take on in addition to operating in a generally poor economy. I wonder if, by imposing them, we’re not collectively biting the hands that feed us.

When it comes down to it, the private sector creates the wealth that provides the services and pays the wages that circulate in the economy. Governments don’t create wealth, they redistribute it. And perhaps because a lot of people have a poor opinion of businesses, thinking only of them in the global context of multi-nationals, or of tax-evading exporters of jobs to developing countries, they can be an easy target for governments: Better the faceless corporation pay than you or I.

But the vast majority of businesses in the province are small, and they’re all around you. The mom-and-pop corner store across the road, the farmer, the real estate agent, the small, independent publishing house; they’re all businesses, and they’re all owned and operated by Albertans, by your friends and neighbours (if not by you, yourself).

And, even in a good economy, it’s tough to run a business and to turn a profit. Jeremy Sturgess, the noted Calgary architect who is interviewed in this issue, says most of the stress he’s felt over the last 40 years has not been a result of being an architect, but of being a businessperson, of finding customers and having to meet payroll every two weeks and chasing down delinquent accounts. Those strains are felt particularly acutely these days.

Not all taxes are bad. The CPP changes will not be “devastating” for Canadian workers and the general economy, as the Canadian Federation of Independent Business would have you believe. But it will be devastating for some businesses that are operating on the razor’s edge. And it’s death by a thousand cuts for others.

The provincial government should put off the minimum-wage increase in a vote of solidarity with its business partners. It’s a dubious policy at best when it comes to achieving the stated goal of poverty reduction. Many minimum-wage earners are students and part-timers who aren’t the head of a family and aren’t trying to put food on the table. A tax credit like the federal Working Income Tax Benefit is a better way to target people living below the poverty line, and it doesn’t put the cost of doing so solely on the backs of business.

One Response to For small business in Alberta, it’s death by a thousand cuts

  1. Ian says:

    AGREE!!!!!!