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Small Business Week chance to support 'the backbone of the economy' – OrilliaMatters

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NEWS RELEASE
ORILLIA DISTRICT CHAMBER OF COMMERCE
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The week following Thanksgiving, is Small Business Week (Oct. 18-24) and now more than ever businesses are grateful for all the support of local consumers that have made positive changes in their purchasing habits to support their own community.

During the first wave of COVID-19, innovations and changes within local businesses were completed with help from all levels of government to keep a very large portion of our businesses open and it is the local consumers who deserve the credit for coming to the aid of those businesses as a first choice.

During this second wave, we cannot afford to change that trend of supporting the shop, dine and finding tourism opportunities locally. It may be the only chance we have to keep our businesses open through the fall winter months ahead. There is an overwhelming sense of thankfulness from businesses based on community efforts to support their own community first.

“Without the tax base from local businesses, your municipal tax levels would increase substantially to fill the gap paid by the brick and mortar taxes of commercial and industrial properties,” said Nathan Brown, president of the Orillia District Chamber of Commerce.

“Out of country online retailers are not paying direct taxes in your community and that possible price advantage will eventually catch up to local residents,” said Brown. These local businesses not only employ your family, friends and neighbours but they also support local charities, athletics and community groups.

“The money spent here stays here and this has never been truer than during our travel limitations during the COVID-19 pandemic. The money spent in our community will stay in our community,” said Brown.

“Downtown Orillia businesses are very thankful and overwhelmed by the support of local residents over the past several months,” said Lisa Thomson-Roop. Manager of Downtown Orillia.

“Our merchants have worked diligently to implement safe practises to keep our community healthy by offering services such as curbside pick-up, delivery, online shopping, enhanced cleaning in stores as well as limiting the number of people in a location one time,” said Thomson-Roop. “Keeping the community we are proud to call home safe, is our top priority and shopping local will ensure the downtown not only survives but thrives for years to come. “

Councillor Ted Emond, Chair of the City’s Economic Recovery Task Force agreed.

“Small business is the backbone of the economy in and around Orillia,” said Emond. “These businesses have and continue to support our community, and it is more important than ever that we spend our money locally rather than on online retailers that contribute nothing to our economy. The message bears repeating. But more important is the continued effort to shop local.”

Kris Puhvel, Executive Director at Orillia & Lake Country Tourism commented on ways to help this effort.

“This fall, visit your favourite local restaurant or try a new one, take in one of the many experiences offered by our tourism businesses and buy your products from our local shops,” said Puhvel. “Your collective support will help ensure their well-being – now and in the future.”

Small Business Week is Oct. 18 through Oct. 24, 2020 and it should be noted that 9 out 10 Canadians in the private sector work for a small to medium sized business. #staysafeshoplocal

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ADRIAN WHITE: Underground economy is thriving – The Journal Pioneer

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There is no doubt that COVID-19 has changed the way businesses function in Cape Breton. The pandemic has forced many entrepreneurs to reshape operating strategies for financial survival.  

Think of the new safety protocols for restaurants to protect staff and customers from virus transmission. Think sporting events playing out before near-empty stadiums and instead focused heavily on revenues generated from media broadcast of the event.  

There are just too many changes to business practices to list here in this column including the growth of digitization in our economy but I wanted to single out a few examples to illustrate some telling impacts. 

One major impact comes from folks not feeling safe to travel outside the province or eat out in restaurants due to the pandemic. Instead, they are using some of those cash savings to fund home improvement projects right here in the Cape Breton economy. That is a good thing for our community and our workers and it supports the “Shop Local-Buy Local” mantra being promoted by the local business community. 

Demand in the home improvement sector has soared and is so strong that it has led to a shortage of building materials, a rapid rise in material costs and a shortage of skilled labour to take on those home improvement projects.  

Many new contractors have entered the home improvement business in 2020 and many anxious homeowners are in hot pursuit of their services. Sometimes these contractors show up when expected to do a job and sometimes not. This has been a long-standing problem with small contractors in Cape Breton.  

Some contractors present an official written quote including HST for the project leaving a paper trail to follow while other contractors are quite prepared to take cash from the customer thereby avoiding HST. Cash leaves little trail for CRA to follow when it comes to reporting taxable income. 

This practice leads me to shed some light on the underground economy and its impact on our well-being as a province. Statistics Canada defines the underground economy as “consisting of market-based activities, whether legal or illegal, that escape measurement because of their hidden, illegal or informal nature.”  

I use the construction industry as an easy-to-understand example but you can imagine other opportunities for tax avoidance including buying illegal cigarettes, street sold cannabis, cash tips, paying cash for services, Airbnb cash rentals, or offshore bank accounts not being reported to CRA. 

In Nova Scotia, according to Statistics Canada, the underground economy was estimated to be $1.28 billion in 2018. That is near 3 per cent of provincial GDP. This is revenue that escapes government taxation. Nova Scotia’s underground economy as a share of GDP is higher than the national average which is troubling. Taxes on $1.28 billion would go a long way to offset the forecasted 2020 Nova Scotia budget deficit of $853 million due to the pandemic. 

Some of the underground economy is driven by the fact Nova Scotia has the second-highest personal income tax rates in the country. It remains one of three remaining provinces in the country that still practices “bracket creep” on your personal income tax deduction by not adjusting it to CPI on your annual income tax return.  

The higher the taxes the more incentive it provides for individuals and companies to embrace tax avoidance. Alberta has one of the lowest personal income tax rates in Canada and no provincial sales tax. It abandoned “bracket creep” on its residents decades ago. It also has one of the lowest underground economy as a share of GDP rates in the country running at 1.8 percent of provincial GDP.  

British Columbia has the highest ratio at 3.7 percent of GDP. In Canada, the underground economy was valued at a whopping $61 billion in 2018 amounting to 2.7 per cent of national GDP.  

I can only imagine with the increased demand for home improvement projects in Canada due to the pandemic that underground economic activity will likely increase 50 per cent rising close to $90 billion for 2020. 

In Nova Scotia, residential construction accounts for over 25 percent of the estimated underground economy GDP.  The next six largest contributors to the underground economy amount to about 50 per cent of Nova Scotia’s underground economy. They are retail trade, accommodation/food services, finance/insurance/real estate, manufacturing, professional/technical services and health care/social assistance.   

If we want to grow the Nova Scotia economy and thereby increase tax revenues to pay for the services we all expect, we are going to have to rethink the tax burden on individuals and businesses to bring balance and fairness to the tax environment. It is one of the reasons we struggle to recruit doctors to Cape Breton. Above-average taxes in Nova Scotia hinder economic expansion. High taxes will continue to drive the underground economy and tax avoidance until we address them. 

Adrian White is CEO of NNF Inc, Business Consultants. He resides Sydney & Baddeck and can be contacted at awhite889@gmail.com.

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You're Not Welcome Here: How Social Distancing Can Destroy The Global Economy – NPR

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Paris is under nightly curfew, starting at 9, to curb the spread of rising coronavirus cases.

Kiran Ridley/Getty Images

Kiran Ridley/Getty Images

Stay out.

It’s what people are being asked to tell each other. Less than 10 days ago, London banned people who live in different households from meeting each other indoors, to stop the spread of the coronavirus.

“Nobody wants to see more restrictions, but this is deemed to be necessary in order to protect Londoners’ lives,” London Mayor Sadiq Khan told the London Assembly.

Taking away the welcome mat is key to cutting off the path of the coronavirus. From the beginning of the pandemic, cities, states and countries have banned each other. And now, eight months into lockdowns that have led to immense stress and fatigue among people, some places around the world are introducing even more draconian measures.

The path toward recovery continues to be inherently antisocial and runs counter to how humans interact, live lives and conduct their business. This unwelcome policy — which has already harmed families, societies and economies — has the potential to lead to a tectonic shift in how the world functions in the foreseeable future.

End of globalization?

Some people worry that this moment is strengthening the hand of nationalism that was rising before the pandemic and that it is accelerating the changing relationships between countries.

President Trump’s “America First” strategy of the last four years had increased tensions between the United States and the rest of the world, specifically China. It was already leading to friction in the smooth supply-and-demand economic chain that has been the hallmark of an interdependent global world. But the self-isolation during the pandemic could mean the end of globalization as we know it.

“The coronavirus pandemic could be the straw that breaks the camel’s back of economic globalization,” according to Robin Niblett, director of the think tank Chatham House, in a Foreign Policy article.

Specifically, the global supply chain is very much at risk. Tax deductions in the U.S. designed to bring back jobs in pharmaceuticals, medical supplies, electronics and auto manufacturing have led companies to invest heavily in production in this country in the last few years.

“The needs that surfaced during the pandemic to bolster supply chain resilience may further accelerate such moves,” according to Moody’s Investors Service Senior Vice President Robard Williams.

Social distancing brought mighty economies to their knees

The entire world’s economy has shrunk dramatically. The pandemic delivered the most severe blow to the U.S. economy since the Great Depression as gross domestic product collapsed and millions of jobs were lost.

“This recession was by far the deepest one in postwar history,” Richard Clarida, vice chair of the Federal Reserve, noted in a speech.

A robust economy is dependent upon the movement of goods and people. For instance, restaurants need people to meet, socialize and break bread together. Airlines and hotels need people to travel to conduct business or to see family and friends or new places.

But all that has been vastly reduced. And the effect of that social distancing has been deadly on many businesses. Restaurants have been among the hardest hit. According to Yelp data, more than 60% of restaurants in the U.S. have permanently closed, closely followed by retail stores that sell clothing and home decor (58%) and beauty stores and spas (42%). Airline travel is down around 70%, and hotel occupancy is at record lows.

“Social distancing has stilled our strong economy,” said Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston.

Social distancing is exhausting but works in some places

What’s worse is that despite long and extensive social distancing, there are signs that it has not worked everywhere — especially in freer societies. In fact, more than lockdown orders, it is people’s fears that have a larger impact on their economic behavior, some researchers have found.

The latest signs of increased cases in the U.S. and Europe are even more disheartening for people who feel they have endured a lot.

So, why are governments continuing to rely on lockdowns? That’s because it’s proven that aggressive social distancing does work in countries where the state can enforce strict shutdowns.

In China, where severe lockdowns were enforced in many parts of the country, the coronavirus has been wrestled to the ground. In Wuhan, ground zero of the virus, recent reports cite crowded water parks and night markets. Domino’s Pizza recorded such a huge improvement in sales in the country in recent months that it prompted CEO Richard Allison to call China “a terrific success story in 2020.”

But the Chinese form of enforcement is hard to achieve in democratic societies, most of which are pinning their hopes on a vaccine.

Some of the largest cities in the West are putting in place even more draconian social distancing measures to combat the virus. Paris is under curfew starting at 9 each night. And in London, you can’t even visit or invite a neighbor over for dinner.

But it’s unclear if people in these societies will strictly follow these guidelines or how enforcement will work. It’s already taken a huge toll on the psyche of the populace of many countries. No wonder most people worry that the longer social distancing goes on, a higher price will be paid by households, society and the economy.

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ADRIAN WHITE: Underground economy is thriving – TheChronicleHerald.ca

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There is no doubt that COVID-19 has changed the way businesses function in Cape Breton. The pandemic has forced many entrepreneurs to reshape operating strategies for financial survival.  

Think of the new safety protocols for restaurants to protect staff and customers from virus transmission. Think sporting events playing out before near-empty stadiums and instead focused heavily on revenues generated from media broadcast of the event.  

There are just too many changes to business practices to list here in this column including the growth of digitization in our economy but I wanted to single out a few examples to illustrate some telling impacts. 

One major impact comes from folks not feeling safe to travel outside the province or eat out in restaurants due to the pandemic. Instead, they are using some of those cash savings to fund home improvement projects right here in the Cape Breton economy. That is a good thing for our community and our workers and it supports the “Shop Local-Buy Local” mantra being promoted by the local business community. 

Demand in the home improvement sector has soared and is so strong that it has led to a shortage of building materials, a rapid rise in material costs and a shortage of skilled labour to take on those home improvement projects.  

Many new contractors have entered the home improvement business in 2020 and many anxious homeowners are in hot pursuit of their services. Sometimes these contractors show up when expected to do a job and sometimes not. This has been a long-standing problem with small contractors in Cape Breton.  

Some contractors present an official written quote including HST for the project leaving a paper trail to follow while other contractors are quite prepared to take cash from the customer thereby avoiding HST. Cash leaves little trail for CRA to follow when it comes to reporting taxable income. 

This practice leads me to shed some light on the underground economy and its impact on our well-being as a province. Statistics Canada defines the underground economy as “consisting of market-based activities, whether legal or illegal, that escape measurement because of their hidden, illegal or informal nature.”  

I use the construction industry as an easy-to-understand example but you can imagine other opportunities for tax avoidance including buying illegal cigarettes, street sold cannabis, cash tips, paying cash for services, Airbnb cash rentals, or offshore bank accounts not being reported to CRA. 

In Nova Scotia, according to Statistics Canada, the underground economy was estimated to be $1.28 billion in 2018. That is near 3 per cent of provincial GDP. This is revenue that escapes government taxation. Nova Scotia’s underground economy as a share of GDP is higher than the national average which is troubling. Taxes on $1.28 billion would go a long way to offset the forecasted 2020 Nova Scotia budget deficit of $853 million due to the pandemic. 

Some of the underground economy is driven by the fact Nova Scotia has the second-highest personal income tax rates in the country. It remains one of three remaining provinces in the country that still practices “bracket creep” on your personal income tax deduction by not adjusting it to CPI on your annual income tax return.  

The higher the taxes the more incentive it provides for individuals and companies to embrace tax avoidance. Alberta has one of the lowest personal income tax rates in Canada and no provincial sales tax. It abandoned “bracket creep” on its residents decades ago. It also has one of the lowest underground economy as a share of GDP rates in the country running at 1.8 percent of provincial GDP.  

British Columbia has the highest ratio at 3.7 percent of GDP. In Canada, the underground economy was valued at a whopping $61 billion in 2018 amounting to 2.7 per cent of national GDP.  

I can only imagine with the increased demand for home improvement projects in Canada due to the pandemic that underground economic activity will likely increase 50 per cent rising close to $90 billion for 2020. 

In Nova Scotia, residential construction accounts for over 25 percent of the estimated underground economy GDP.  The next six largest contributors to the underground economy amount to about 50 per cent of Nova Scotia’s underground economy. They are retail trade, accommodation/food services, finance/insurance/real estate, manufacturing, professional/technical services and health care/social assistance.   

If we want to grow the Nova Scotia economy and thereby increase tax revenues to pay for the services we all expect, we are going to have to rethink the tax burden on individuals and businesses to bring balance and fairness to the tax environment. It is one of the reasons we struggle to recruit doctors to Cape Breton. Above-average taxes in Nova Scotia hinder economic expansion. High taxes will continue to drive the underground economy and tax avoidance until we address them. 

Adrian White is CEO of NNF Inc, Business Consultants. He resides Sydney & Baddeck and can be contacted at awhite889@gmail.com.

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