Weekly Business Update – 22 September 2023
Welcome to our Weekly Digest – stay in the know with some recent news updates relevant to business and the economy.
The unprecedented transfer of wealth and transformation in Canadian family businesses
The landscape of Canadian family businesses is poised for a profound transformation in the coming years. This impending shift is characterized by innovative perspectives and transformative changes. As we enter the next decade, there’s anticipation of a monumental capital transfer that will shape the destiny of family enterprises nationwide.
This anticipated transformation is expected to bring forth both opportunities and challenges that will redefine the essence of Canadian family businesses. With a substantial wealth transfer on the horizon, these enterprises face the daunting task of navigating uncharted waters and adopting a forward-thinking mindset to ensure their continued success and prosperity.
The decisions made by Canadian family businesses today carry immense weight, as they will determine their longevity in an increasingly dynamic and competitive marketplace. It is crucial for these enterprises to embrace strategic approaches that encompass adaptability, innovation, and resilience, not only to navigate the impending capital transfer but also to establish a robust foundation for future generations.
This era of change offers a pivotal opportunity for family businesses to reevaluate their traditional practices and adopt a fresh perspective on leadership, management, and corporate governance. By embracing new ideas and fostering a culture of innovation, these enterprises can break free from conventional norms and explore untapped potential, positioning themselves as leaders in their respective industries.
Payroll taxes weigh on small businesses and cut take-home income for workers
The recently released report by the Canadian Federation of Independent Business (CFIB) sheds light on the concerning trend of payroll tax hikes in numerous Canadian provinces, which has significantly augmented the financial burden on employers and simultaneously eroded workers’ take-home income. Since the year 2019, a majority of provinces across Canada have witnessed a surge in payroll taxes, thereby exacerbating the already challenging cost of conducting business for employers and posing a grave concern for the economic landscape.
The report’s findings indicate that these escalating payroll taxes have emerged as a significant obstacle for employers, hindering their ability to thrive and prosper in an increasingly competitive market. As the cost of doing business continues to soar, employers are grappling with the strain of allocating additional funds towards payroll taxes, diverting valuable resources that could otherwise be utilized towards business growth, employee benefits, or innovation.
Moreover, the burden of these increased payroll taxes is not borne solely by employers. The report highlights the adverse impact on workers, as their take-home income has been noticeably diminished. With a significant portion of their earnings being deducted towards payroll taxes, employees are left with reduced disposable income, compromising their ability to meet essential expenses, save, or invest in their future. This decline in workers’ take-home income not only affects their financial well-being but also has broader implications for the overall economy, as reduced consumer spending ultimately dampens economic growth and hampers market vitality.
The CFIB report serves as a wake-up call to policymakers and decision-makers, urging them to recognize the detrimental consequences of escalating payroll taxes on the Canadian business landscape and the workforce. It underscores the importance of fostering an environment that encourages entrepreneurship, innovation, and economic growth, rather than burdening businesses with excessive financial obligations. The report advocates for a comprehensive review of the current payroll tax structure, with the aim of alleviating the burden on employers and workers alike, thus fostering a more conducive environment for sustainable economic prosperity.
Ottawa summons major grocery CEOs to talk lowering food prices
The federal government is taking action to address the pressing issue of rising food costs in Canada by convening a meeting with the leaders of major grocery chains in Ottawa this upcoming fall. The primary aim of this gathering is to initiate essential discussions aimed at devising an effective plan to alleviate the burden of high food prices for Canadian consumers.
Affordable access to quality food is considered a fundamental right for all citizens, and the federal government acknowledges the challenges Canadians face in maintaining their household budgets amid escalating inflation. With the prices of essential food items steadily increasing, it has become imperative to collaborate with key stakeholders in the grocery industry to identify concrete measures to mitigate these rising costs.
The scheduled meeting in Ottawa will provide a platform for open and transparent dialogue between government officials and the heads of Canada’s major grocery chains. By bringing together these influential decision-makers, the federal government aims to foster cooperation and collective responsibility in finding innovative solutions to mitigate the impact of rising food costs on Canadians’ daily lives.
During these discussions, a wide range of topics will be explored, including supply chain dynamics, distribution networks, production costs, and pricing strategies. It is expected that by delving into these intricate aspects of the grocery industry, a comprehensive understanding of the factors driving food prices will be established. This understanding will serve as a strong foundation for collaborative efforts to devise a sustainable plan aimed at lowering food costs and ensuring food affordability for all Canadians.
Canadians undergoing a shift in news consumption habits amid Bill C-18 standoff: Report
A recent report from Vancouver-based communications agency Talk Shop has highlighted a significant shift in how Canadians consume online news since the introduction of Bill C-18. This legislation has not only affected the accessibility of news but has also brought about notable changes in Canadians’ news consumption habits.
The report’s findings reveal a substantial transformation in Canadians’ preferences and behaviors regarding online news consumption. With the implementation of Bill C-18, aimed at enhancing the transparency and accountability of news sources, Canadians have become more discerning when it comes to accessing news online.
A key observation from the report is the marked increase in the use of reputable and established news sources. The legislation has prompted Canadians to prioritize reliable sources that adhere to ethical journalism standards, reflecting a growing concern about the spread of misinformation and fake news online.
The report shows a decline in the reliance on social media platforms as the primary source of news information. Canadians are now approaching news shared on social networks with caution, acknowledging the potential for misinformation and bias. This shift suggests an increasing demand for accurate and objective reporting, with citizens actively seeking news from trusted sources rather than relying solely on social media platforms.
Brace yourself, Canada’s economy is weaker than you think
The Bank of Canada’s recent decision to maintain its unchanged interest rate reflects an acknowledgment of the economy’s deceleration. Yet, when we examine this slowdown in light of population growth, a deeper and often overlooked concern emerges. While headline economic figures provide a general overview, they tend to omit the influence of demographic shifts.
Incorporating population growth into our economic analysis provides a more comprehensive perspective. This lens reveals that the economy is not merely slowing down but is struggling to keep pace with a growing population. This dynamic creates multifaceted challenges, including increased strain on resources, infrastructure, and social services. Furthermore, it implies that economic benefits are spread among a larger populace, potentially resulting in diminished living standards.
The intricate interplay between population growth and economic performance highlights the need for a more nuanced evaluation of the current economic landscape. Relying solely on headline statistics may obscure underlying issues. Consequently, it is crucial for policymakers, economists, and the general public to recognize the significance of population growth when assessing the economy. This approach fosters a more accurate understanding and enables targeted measures to address the challenges posed by a slowing economy within the context of a growing population.
Canada may re-evaluate immigration targets, says housing minister Sean Fraser
Canada’s Housing Minister and former Immigration Minister, Sean Fraser, has raised the possibility of the federal government revisiting the nation’s long-established immigration intake goals. This subtle suggestion has ignited discussions surrounding Canada’s historically elevated immigration levels. In his role as Housing Minister, Fraser is keenly attuned to the impact of immigration on Canada’s housing market. With the country experiencing significant population growth, concerns have mounted regarding housing availability and affordability.
Fraser’s hint reflects an acknowledgment of these challenges and suggests a potential reevaluation of current immigration policies to address these pressing issues. Canada has earned a reputation for its welcoming and inclusive approach to immigration, with high immigration levels contributing significantly to the nation’s economic growth and cultural diversity. However, the recent surge in immigration numbers has underscored the need for a careful reassessment of the country’s capacity to accommodate newcomers without straining existing resources, infrastructure, and social services.
Fraser’s subtle allusion to potential changes in immigration targets demonstrates the government’s responsiveness to these concerns. While the specifics of any adjustments remain uncertain, the government’s willingness to contemplate modifications acknowledges the imperative to strike a balance between maintaining Canada’s tradition of welcoming immigrants and addressing the challenges posed by population growth.
Public opinion on this matter is divided, with some advocating for stricter immigration policies to ease pressure on housing and infrastructure, while others emphasize the importance of embracing diversity and preserving Canada’s reputation as an immigration-friendly nation. The government’s potential reconsideration of immigration levels is poised to fuel ongoing debates and necessitate a comprehensive examination of various factors, including economic demands, housing availability, and social integration.
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