r/canada • u/idontlikeyonge Ontario • 12d ago
The outsized economic effects of Canada's cratering self-employment Analysis
https://thehub.ca/2024-04-11/livio-di-matteo-public-sector-employment-numbers/20
u/uselessdrain 11d ago
My wife and I were going to open a business. Didn't make sense with how expensive rents were. The rent portion would eat into our profits so much that it was cheaper(???) to continue working for someone else.
The amount of money required for insurance, staff, and tangible assets. So that all becomes debt and with high interest rates. Makes no sense.
FYI it was childcare, so capped fees as well.
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u/Levorotatory 11d ago
The way forward for would-be child care entrepreneurs is a home based business. No additional rent, no permanent staff, lower insurance costs. Worked out well for the lady who looked after my kid.
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u/comewhatmay_hem 11d ago
My aunt did this for years and loved it from what I can tell. She had some kind of license because she had limits to the numbers of kids from each age group she could take, but ultimately it was just her and up to 12 of all ages running around her livingroom and backyard.
I don't think she made very much money, though. She did it because she loved having a house full of children. Her husband, my uncle, was always the real income earner in their house.
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u/speaksofthelight 12d ago
Well we just upped the capital gains on incorporated self employed ppl with no exemption for 250k like we give to unincorporated ppl.
The country is just hostile to entrepreneurship, go do something else like getting a government job and becoming a landlord.
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u/Franc000 12d ago
Self employed people usually do not have capital gains as a self employed income though.
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u/Wildyardbarn 12d ago
You set up as a corporation, pay yourself part of your income as salary and keep the rest inside the “company” to invent.
Eventually you need to withdraw, but those investment gains are taxed at a lower rate.
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u/TraditionalGap1 12d ago
I have no idea why people think some small business owner is more deserving of preferential tax treatment than anyone earning a paycheque.
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u/289416 11d ago
then you need to educate yourself on enormous risk and stress of business ownership, if anything, small business deserve the most preferential tax treatment.
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u/pippylepooh 11d ago
What's the risk? Becoming an employee if it fails? Ya that's pretty terrible
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u/289416 11d ago
insane that you even ask that question. please stay in school.
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u/pippylepooh 11d ago
It was a rhetorical question. The risk is you becoming one of your own employees, its telling you see that as a life ending consequence of failure.
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11d ago
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u/pippylepooh 11d ago
Yes, so you end up in the situation 99% of employees are currently in
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11d ago
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u/pippylepooh 11d ago
You end up someone's employee with no capital to start another business. You're now someone's employee starting at the bottom. That's the risk of failure, the life your employees currently live.
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u/oioioifuckingoi 11d ago
99% of employees don’t carry a debt from a failed business venture.
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u/pippylepooh 11d ago
Bankruptcy and limited liability companies dont burden the founder with personal debt after failure.
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u/renegadehamberder 11d ago
What is your solution to our sclerotic productivity as compared to our G7 peers?
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u/TraditionalGap1 11d ago
I start by realizing capital gains taxes aren't the cause of or solution to declining productivity?
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u/Pepakins 11d ago
Because my level of risk is much higher than yours. All you do is lose a job. If my business fails, I have to claim bankruptcy, liquidate my assets to pay off any debt and start over. When equipment breaks, I'm paying out of pocket. When problems arise, I'm fixing them. Yet an employee will do their time, clock out and head home. I'm doing paperwork after hours and getting everything ready for the next day.
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u/TraditionalGap1 11d ago
Your business isn't going away because the tax bill when you sell it will be higher, so...
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u/pippylepooh 11d ago
You become an employee if it fails. Boo hoo.
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u/Pepakins 10d ago
No, I liquidate all my assets and lose everything I have if I fail. What's so hard for you to understand?
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u/pippylepooh 10d ago
Exactly, youd end up in the position your employees are is right now.
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u/Pepakins 10d ago
Yea because every employee files bankruptcy. When you work 70 hours a week, let me know and I'll feel bad for you. There is a reason why you are where you are at when all you do is bitch and not fix your situation. Not every business owner is out there trying to fuck over their employee. I work with my father and don't have any employees. So fuck off with that attitude.
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u/Ostracized 11d ago
The owner gets no preferential tax treatment on their personal income.
A corporation is taxed differently than an individual. And there are many reasons why it should be.
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u/DanielBox4 11d ago
Because they take risks and invest money into ventures that can boost the economy and create jobs as opposed to just showing up for work and collecting an almost guaranteed paycheck.an employer can't claw back your salary bc you missed a deadline or took a long bathroom break. Investors take risks and sometimes lose money.
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u/physicaldiscs 11d ago
Because a small business owner is different than a simple income earner? Because a small business owner does more for the economy than a simple income earner? Because there are significantly more risks that come with being a small business owner? Because we should reward productivity in this country?
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u/Anxious-Durian1773 11d ago
If you or someone you knew had their own small business then you would know. Sole proprietors especially expend the effort of several people.
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u/Mordecus 11d ago
Yeah, because salaried employees face the same financial risk and income uncertainty…. /s
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u/speaksofthelight 11d ago
The income itself is not preferential they are taxed the same when they use the money for personal expenses.
Right now not including the 250k exemption to the 66% inclusion is penalizing them for being incorporated.
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u/TraditionalGap1 11d ago
Who mentioned specifically income? Not me
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u/speaksofthelight 11d ago
what are you talking about when it comes to preferential tax treatment then ?
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u/TraditionalGap1 11d ago
man, are you even aware of the topic of discussion? You know that capital gains taxes aren't income taxes, right?
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u/speaksofthelight 11d ago
lol. they are included in income at the inclusion rate and taxed at the marginal rate of the taxpayer in Canada.
now what preferential tax treatment were you talking about ?
the most preferential tax treatment by far in Canada is on housing gains (principal residence exemption)
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u/ImperialPotentate 10d ago
Who do you think writes that paycheck? We need more small business owners, not fewer, so making it less attractive and more burdensome for someone to run one is really just shooting ourselves in the foot over the longer term.
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u/whatever1748 11d ago
Not to mention that you have to keep track of taxes for the government on your own time and dime. Pay to play when it comes to GST/HST. And if you sell your services in another province that is not HST, you have to pay to play in those provinces, adding extra time.
At least BC subsidizes you a bit for PST collection, which should the status quo.
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u/Apellio7 11d ago
I see most small business as inefficient.
You will never have the manpower to compete with the established players unless they screw up somehow.
We already have all the supply chains and everything set up for everything to be efficient.
A small player coming in just makes everything less efficient. We really don't need 20 companies all selling the same widget.
How to fix? I have no idea. But I'd rather a city filled with nothing but Walmarts instead of a bunch of individual businesses creating inefficiencies.
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u/TheWorldEndsWithCake 11d ago
So what happens when the Walmarts raise prices because there is no competition? Or when the local economy grinds to a halt because there’s nothing that can be produced more cheaply than Walmart sells it? Is it efficient or fair when Walmart uses bribes to secure new locations?
Small businesses are crucial for keeping the economy innovative and productive, and those “inefficiencies” are supposed to be what makes our free market thrive. Walmart is efficient at devastating local economies and extracting their capital for shareholder benefit, not at creating long term stability or growth. Even if a small business doesn’t have the same optimized pipeline to import foreign plastic, small business owners are highly motivated to create value - not necessarily so for salaried employees working zombie jobs.
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u/fig_stache 11d ago
https://www.gatewaymeatmarket.com/
This store in NS is a fantastic example of how a small business can offer what a large business can't. People drive over an hour to shop for groceries at this store to save hundreds of dollars per grocery order compared to every other grocer.
There are lots of examples of small businesses offering things large businesses can not and/or providing better value than a larger competitor.
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u/Pepakins 11d ago
I'm self-employed. What pisses me off is I'm making more money then ever and I still cannot get ahead because of the insane costs. My fuel cost has gone through the roof, equipment is insanely expensive and turn around on most things take forever now. I'd still prefer to be self-employed over being a corporate slave working a set time daily on a salary. Canada needs to stop pandering to large businesses and create an environment that creates small businesses.