adplus-dvertising
Connect with us

Economy

Frank Stronach: Government bureaucracy is the cholesterol clogging up the economy

Published

 on

Back in the early 1980s, when commercial computers first came onto the market, they were sold with a big promise: they could do the work of an entire floor of employees in a typical office building and could dramatically decrease the amount of paperwork and paper filing for businesses and organizations.

But it never happened. If anything, the piles of paperwork, government forms and compliance reports that needed to be filled out increased enormously — and with it, so too did the size of our bureaucracy.

As a result, today you see hundreds and hundreds more office buildings staffed with more people who devote a large chunk of each workday to regulation compliance requests.

The facts bear this out: government spending as a percentage of National GDP was around 16 per cent in the late 1950s and then it more than doubled in the early 1960s and has steadily grown ever since then, sitting at around 44 per cent today.

Who suffers most as a result? Canadian taxpayers, for sure, since they have to foot the bill for the expansion of our bureaucracy.

But those hardest hit are Canada’s small business owners and entrepreneurs who struggle to cope with a mind-boggling array of regulations, rules, forms and never-ending, always-changing government compliance requests.

Think of commerce as the arteries of our economy, and think of government bureaucracy as the cholesterol clogging everything up.

Government is micro-managing small business to death. All the additional red tape and regulations haven’t made them more competitive or more profitable. On the contrary, it is crippling them.

In a pre-budget submission prepared by the Chartered Professional Accountants of Canada (CPA Canada) in fall of last year, the national accounting organization urged the federal government to act on a Canada Revenue Agency task force report issued in 2011 that identified 61 areas where government could remove regulatory burdens on small businesses. Turns out it was nothing more than another government report collecting dust. More than a decade has passed, and nothing has changed in terms of the paperwork and compliance Canada’s small business and startups get saddled with.

We’ve been spinning our wheels for years now. We need to put a freeze on the introduction of any new regulations and, more importantly, we need to start eliminating as many as unnecessary regulations as possible. Aside from rules that safeguard human health and regulations that protect our environment, government needs to get out of the way of small business.

But the best course of action government can take is to completely eliminate any income tax on any business with 300 or less employees. By doing this, small businesses can re-invest their profits in developing new products and hiring more employees to fuel continued growth and expansion.

On the other hand, large businesses — those with more than 300 employees — should be required to share 20 per cent of their annual profits with employees.

With small businesses, owners know everyone by name. They know how much each individual contributes and reward and compensate their employees accordingly.

But when businesses get really large, those personal bonds slip away. Employees often become numbers. The founders of the companies are usually long gone, having died or sold their business, and the business is now run by a large pension fund or hedge fund. There’s no real affinity for the workers — and the workers know it.

By requiring large businesses to share profits, employees get a fair share of the wealth they help generate, and because they get a slice of the economic pie, they work harder to make the company more profitable. It’s a classic win-win scenario: workers get more pay in their pockets, and companies become more productive and profitable.

I’d even go one step further and entrench these principles in a binding Economic Charter of Rights for all Canadians. It would give Canadians a number of fundamental economic rights — including the right to share in the profits they help produce — and it would impose on government certain responsibilities that would require it to manage our tax dollars responsibly.

It’s distressing to see the number of emails I get from National Post readers who say they’re ready to throw in the towel with their small businesses because they are tired of the red tape, bureaucratic obstruction and high taxes. That’s a shame in a country that was built on the backs of thousands upon thousands of small business owners.

It’s high time we gave Canada’s small business owners the freedom and the space to do what business was meant to do: sell products and services that people want and need, create jobs, and generate economic wealth.

 

728x90x4

Source link

Continue Reading

Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

Published

 on

 

OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

Published

 on

 

The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Trump’s victory sparks concerns over ripple effect on Canadian economy

Published

 on

 

As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending