Moving forward with Independent Business
Presentation to Resorts of Ontario Spring Conference Judith Andrew, Vice-President Ontario Orillia , April 16, 2008
www.cfib.ca
Agenda
About CFIB Business Barometer Outlook CFIB Members’ Top Concerns Lobbying for Small- and Medium Size Enterprises (SMEs)
www.cfib.ca
About CFIB
Started with a tax protest 37 years ago 105,000 business members, 42,000 in Ontario All industry sectors, all regions of the country No government $…100% member financed Advocacy by democratic “1member = 1 vote”
www.cfib.ca
CFIB’s Ontario Member Profile C ’ O i b P fil
Our diverse membership of 42,000 businesses is a good p , g reflection of the Ontario economy
Manufacturing Ind. 12% Retail Trade Ind. 26% Fishing & Trapping Logging &Forestry Ind. 0.2% Ind. 0.1% Communications & Other Utility Ind. 0.4% Mining, Quarrying & Oil Well Ind. 0.2% Educ. Services 0.5% Finance & Insurance Ind. 1.3% Real E t t O R l Estate Operator t & Ins. Agent Ind. 2% Transportation & Storage Ind. 2% Health & Social Agriculture R l t d A i lt & Related Service Ind. Services 3% 5% Accommodation Food & Beverage Service Ind. Non Classifiable 5% 6%
Construction Ind. 11% Wholesale Trade Ind. Other Service Ind. Business Sevice Ind. 7% 7% 9%
www.cfib.ca
Ontario’s Small Business World
Business with no payroll employees (60%) Fewer than 5 employees (21%)
99.9% of the universe of firms are SMEs. 81% of Ontario’s businesses employ fewer than 5 people (60% have no employees)
500 employees or more (0.1%) 50 to 499 employees (3%) 20 to 49 employees (4%)
5 to 19 employees y (12%)
Number of Establishments: 872,725
SMEs account for more than half of Ontario’s employment, and almost half of GDP
www.cfib.ca
Source: Source: Statistics Canada, Business Register, December 2004, Ontario Data
Business Barometer Index March 2008
120 115
1988 = 100
Canada Ontario
110 105 100 95 90
2001 2002 2003 2004 2005 2006 2007 2008
104.0 101.6
Source: CFIB Business Barometer – Ontario, March 2008, based on 778 responses
www.cfib.ca
Business Barometer Index Index, Ontario (By Sector)
120 Legend Agriculture Manufacturing Construction Finance Retail Hospitality
115 110.3 107.6 107 6 105 102.5 100 99.9
110
95
95.1 93.9
90
85 Mar07
Jun07
Sep07
Dec07
Mar08
www.cfib.ca
Source: CFIB Business Barometer – Ontario, March 2008, based on 778 responses
Business Barometer Index, Ontario Index Major Business Factors
Improved % response Customer demand Climate for investment 4 Access to bank finance 5 Insurance 6 Competition 7 Product input prices 8 Wage costs 4 Labour availability 5 Borrowing costs 9 Energy costs 3 Border crossings 2
25 33 38 18 23 26 49 39 22 25 73 24
Worsened
Source: CFIB Business Barometer – Ontario, March 2008, based on 778 responses
www.cfib.ca
CFIB Members’ Top Concerns
www.cfib.ca
Source : CFIB, Our Member’s Opinion, no 59 (July-Dec. 2006) & no 61(July –Dec. 2007) Ontario, 7763 respondents.
Tax Relief Priorities
If the provincial government were to reduce taxes, what should be the priorities? p g , p
(Select top three choices)
Corporate Income Tax (Small Business) Personal Income Tax Property Tax Fuel Tax WSIB Premiums Retail Sales Tax Employer Health Tax Capital Tax Ontario Health Premium Corporate Income Tax (Manufacturing)
CFIB Ontario Pre-Election Survey, May 2007, based on 3,352 responses
58% 47% 42% 39% 34% 25% 21% 15% 15% 14%
www.cfib.ca
Ontario’s Over Dependency on Property Taxes Ontario s
Property Taxes as a Share of GDP - 2004
UK Canada USA France Japan New Zealand Australia* Iceland Poland Denmark Sweden Netherlands Italy Spain Korea Ireland Portugal Finland Germany Slovak Rep. Austria Hungary y Norway Turkey Switzerland Czech Rep. Greece Belgium Luxembourg Mexico 0%
Ontario
3.7% 3.3% 3 3% 2.9% 2.8% 2.1% 2.0% 1.7% 1.4% 1.3% 1.2% 1.2% 1.0% 0.9% 0.9% 0.7% 0.6% 0.6% 0 6% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.0% 0.0% 1% 2% 3% 4%
Our “worst-in-the-world” property taxes are particularly onerous for business. (e.g. Toronto 4 x)
% of GDP
* 2003 Sources: OECD Revenue Statistics 1965-2004, Statistics Canada Financial Management System
www.cfib.ca
Fast-tracking the BET Plan
Should the Ontario government accelerate the current seven-year plan to seven year reduce Provincial (Business) Education Property Taxes?
(Select one)
Yes 70%
No 9%
CFIB Ontario Pre-Election Survey, May 2007, based on 3,352 responses
Don't know 21%
www.cfib.ca
SME Priorities on Infrastructure Spending
Highways Local Roads Water Treatment Public Transit Sewers Railways Parks & Recreation Airports
57% 56% 50% 40% 41% 31% 18% 13% 35%
20 40 60
38% 41% 44% 44% 44% 45% 62% 56% 53%
80
3% 2% 2% 1% 2% 11% 11% 17% 18% 4% 4% 4% 7% 2% 10% 5%
100
21%
Cultural Venues (e.g. art galleries) 7%
0
Increase spending I di
Same spending S di
Reduce spending R d di
Don't k D 't know
Source: CFIB Focus on Ontario Survey 2003, based on 3242 responses
www.cfib.ca
Tax Relief for Competitiveness
2008 Ontario Budget g
“Maintaining a tax system that promotes investment and encourages economic growth supports Ontario’s fundamental strengths.” ( h ” (page 15) Building on BET acceleration in the north… “In future years, consideration will be given to accelerating BET reductions in other g g parts of the province should the fiscal plan allow.” (page 43)
Current Recommendations
Accelerate BET relief across the rest of Ontario; Set out a Corporate Income Tax (CIT) plan WSIB funding –lower rates as UFL paid, avoid “ f di l id id “rate & b benefit” f d fi ” fund
www.cfib.ca
The Regulatory Burden = $ 3 Billion/annually $13 /
Federal-Provincial Corporate Income Tax Harmonization
Family Day Holiday
SME families lose family income, while footing the bill for other families to enjoy a paid day off!
Small Business Agency of Ontario regulatory registry, forms project
New regulatory and revenue powers for municipalities (Bills 53 and 130) Disability Legislation Regulatory Modernization Act, (i.e. more enforcement)
www.cfib.ca
Provincial Regulatory Burden
How has the overall burden of provincial regulations on your business changed during the past three years?
(Select one)
Increased
66%
No change
26%
Don't know
7%
Decreased
1%
www.cfib.ca
CFIB Ontario Pre-Election Survey, May 2007, based on 3,352 responses
Fees, Forms and Regulations
Should the Ontario government set clear numerical targets for the reduction of f f fees, f forms and regulations on small business? d l i ll b i ?
(Select one)
Yes 90%
Don't know 8%
No 2%
www.cfib.ca
CFIB Ontario Pre-Election Survey, May 2007, based on 3,352 responses
Opportunity to reduce the b d O t it t d th burden
Most b d M t burdensome PROVINCIAL regulations l ti
Workers' compensation PST/HST Employment standards Property Assessment Business registration/reporting ( g, ) Financial (banking,securities) Other tax compliance Environment Health permits/inspections Consumer protection C Liquor/tobacco 0
60 51 37 35 26 24 19 15 14 5 4
10 20 30 40 50 60
% response
Ontario Data – 2005 CFIB National Survey on Regulation - 1,028 Ontario Respondents
www.cfib.ca
Easing the Regulatory Burden
2008 Ontario Budget
“Ontario’s goal is to lead all Canadian jurisdictions with its efforts to measure and reduce the regulatory burden.” (page 16)
CFIB Recommendations
Tap into CFIB s extensive experience on measures that are needed to CFIB’s institutionalize regulatory reform. Implement the Premier’s 1 for 1 regulatory reform commitment by requiring all Ministries to regularly publish their total regulatory count – following the British Columbia model. Continue with the mandate and membership of the Small Business Agency of Ontario. Task the Agency with a new paperwork reduction A f O t i T k th A ith k d ti target, building on its 24% achievement to date.
www.cfib.ca
Balancing Labour Laws 1
What is your view of Ontario's Labour Laws?
( (Select one) )
Too pro-union p Don't know Fair and balanced Too pro-business No answer
20%
66%
11%
2%
1%
CFIB Ontario Pre-Election Survey, May 2007, based on 3,352 responses
www.cfib.ca
Balancing Labour Laws 2
On labour relations, which policy direction would you like to see the politicians adopt?
(Select one) Return to a democratic system where employees always get to make their union choice in a secret ballot
82%
17%
1%
Further help unions expand their memberships and influence
Don't know
CFIB Ontario Pre-Election Survey, May 2007, based on 3,352 responses
www.cfib.ca
Balancing Ontario’s Labour Laws
Premier McGuinty s pre election promise to CFIB McGuinty’s pre-election
The construction sector is unique and it’s as far as we’re going [card-based certification].
2008 O t i B d t Ontario Budget
“Ontario’s regulatory modernization will start with an aggressive cap-and-trade initiative for government regulations, which means that when new regulations are enacted, others must be eliminated.” (page 16)
CFIB Recommendations
In light of new, costly regulations introduced by the Ministry of Labour in the last few years, we recommend the government take the following steps: Place a moratorium on labour related regulations, until such time as a review labour-related of existing regulations and their impact on business has taken place.
www.cfib.ca
What the Lobbying Game Is About
Influencing how governments Tax Regulate, and Spend
www.cfib.ca
The World of Lobbying y g
BIG BUSINESS
“If you’re not in the game you’ll pay for those who are. are ”
BANKS GOVERNMENTS
UNIONS
ACTIVISTS
SMALL AND MEDIUM SIZE BUSINESSES
www.cfib.ca
Who Can Make Big Donations to Political Parties?
BIG BUSINESS
BANKS
UNIONS
GOVERNMENTS SMALL AND MEDIUM SIZE BUSINESSES S SS S
ACTIVISTS
www.cfib.ca
Who Can Afford to Pay For Radio/TV/Newspaper Ads To Promote Their Interests?
BIG BUSINESS
BANKS
UNIONS
GOVERNMENTS SMALL AND MEDIUM SIZE BUSINESSES S SS S
ACTIVISTS
www.cfib.ca
Who’s Got Time to Go Association Meetings? Who s
BIG BUSINESS
BANKS
UNIONS
GOVERNMENTS SMALL AND MEDIUM SIZE BUSINESSES S SS S
ACTIVISTS
www.cfib.ca
Who’s Got Government Relations Departments and/or the Time to Go to Government Stakeholder Meetings?
BIG BUSINESS
BANKS
UNIONS
GOVERNMENTS SMALL AND MEDIUM SIZE BUSINESSES S SS S
ACTIVISTS
www.cfib.ca
Who can turn out campaign workers at p g election time?
BIG BUSINESS
BANKS
UNIONS
GOVERNMENTS SMALL AND MEDIUM SIZE BUSINESSES S SS S
ACTIVISTS
www.cfib.ca
CFIB – The Only Way for SMEs to Get in the Game At the Broadest Level
The only broad-based SME lobbying organization that: Represents only independent, small and mediumsized b i i d businesses exclusively – no one else can join l i l l j i Meets occasionally with the Prime Minister and the Premiers; regularly with Cabinet Ministers & senior ; g y bureaucrats federally and provincially; frequently with Mayors and municipal officials Lobbies L bbi on i issues of b f broad i t d interest t many sectors t to t Collaborates/communicates with sector groups, who typically handle industry specifics yp y y p f
www.cfib.ca
Post-SARS Recovery Measures that Can Help SMEs
A. Improve Health Protection
F. Adversting Campaign
E. Relief on Tax Remittances
G. Tax Holiday
D. Relief From Banker/Creditor
C. Direct Financial Assistance to Cover Cash Flow Needs
B. B Business Property Tax Relief
0%
Source: CFIB Post-SARS Recovery Survey, GTA Data, Data based on 623 Responses
50%
100%
Very Helpful Somewhat Helpful No Help
www.cfib.ca
Should the Ontario government permit municipalities to add a 3 per cent hotel/motel levy to pay for tourism promotion ?
N o 9 0.8 % Ye s 5 .7 % N o Inte res t 1 2 % 1.2 U nde cid ed 2.3%
Source: CFIB, Results of the Ontario Hotel/Motel Survey
The Ontario Th O t i government h b t has been asked t pass llegislation enabling municipalities t add a 3 per cent llevy on llocal/hotell k d to i l ti bli i i liti to dd t l/h t rooms with all the money (less collection administration) going to the local Visitor & Convention Bureau for tourism marketing. The proposed levy would be an opt-in arrangement, implemented within a region after being approved by the local accommodation sector. Rules would govern the form/delivery of the vote , and approval would be by double majority – 50 per ce p us o ose p ope es o g a d pe ce p us o e oo s O ce app o ed, e e y ou d cent plus 1 of those properties voting and 50 per cent plus 1 of the rooms. Once approved, the levy would be mandatory for all a da o y o a hotel properties in that defined area, excluding properties with 4 or fewer rooms.
www.cfib.ca
Questions and Discussion www.cfib.ca Thank you h k
www.cfib.ca